Manufacturers: Have You Heard of the High Performance Incentive Program (HPIP)?
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Non-Manufacturing HPIP Qualifying Kansas Businesses
HPIP is traditionally targeted to Kansas manufacturers. Other companies can qualify for the HPIP Investment Tax Credit provided they make at least 51% of sales to Kansas manufacturers, out-of-state government agencies and/or out-of-state commercial customers. This includes:
- Utilities
- Wholesalers
- Transportation
- Information (publishing, broadcasting, internet, telecommunications and data processing & hosting)
- Banking, Finance and Insurance
- Real Estate
- Professional Services
- Education and Health Services
- Leisure and Hospitality
- Arts & Entertainment
- Certain Associations and Civic/Social Organizations
Transferring the HPIP Tax Credit
Beginning with tax year 2021, qualifying companies can transfer up to 50% of the HPIP Investment Tax Credit to any individual or entity. To qualify, the transfer(s) must be made in the same tax year the credit was earned. The tax credit transfer can be used against the other entity’s state income tax liability and can be carried forward up to 16 years.
Transferring the HPIP tax credit can be an effective tool for a manufacturer or other entity that’s unable to take advantage of the full credit.
Businesses with gross receipts of $5 million in the current year can claim the credit against up to $250,000 in payroll taxes.
In either case, the R&D credit can be carried forward up to 20 years.
HPIP Investment Tax Credit Amounts
The HPIP Investment Tax Credit amount varies depending on which county the project is in and when the project occurred. It may be worth examining whether an amended return should be filed to claim the credit prior to 2012.
$50K
10% of project costs above $50,000 prior to 2012 for Douglas, Johnson, Sedgwick, Shawnee or Wyandotte
$1M
10% of project costs above $1 million after 2012 for Douglas, Johnson, Sedgwick, Shawnee or Wyandotte
$50K
10% of project costs above $50,000 after 2012 for any other county