Schedule K-59 - High Performance Incentive Program Credits Page 3
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4INSTRUCTIONS FOR SCHEDULE K-59
GENERAL INFORMATION
Line 6: Subtract line 5 from line 3 and enter the result.
Line 7: Enter amount from line 6 or $50,000, whichever is less. This is the
Schedule K-59 provides an investment schedule and a carry forward
total training and education credit for amount of cash investment made.
schedule. Please read all directions before completing this schedule.
Line 8: Partners, shareholders, or members must enter their proportionate
The High Performance Incentive Program (HPIP) provides for two types
share percentage in the partnership or S corporation. All other
of credits: 1) Training and Education Credit (K.S.A. 74-50,132); and, 2)
taxpayers enter 100%.
Investment Tax Credit (K.S.A. 79-32,160a(e)).
Line 9: Enter on line 9 the lesser of line 7 multiplied by line 8 OR your
Certification from the Kansas Department of Commerce (KDOC) is the
Kansas tax liability. This is the share of the credit for the amount
initial requirement for either of the credits and must be maintained with your
invested this year. Enter this amount on the appropriate line of Form
records.
K-40, Form K-41, Form K-120, or Form K-130.
Training and Education Credit. A qualified firm that invests in the
training and education of its employees and pays higher than average
Apply this credit to your tax liability before any other credits.
wages is eligible to receive a tax credit. The credit is the amount of training
This amount cannot exceed your tax liability.
and education expenditures that exceed 2% of the wages, limited to $50,000.
PART C - HPIP INVESTMENT CREDIT
The credit must be used in the tax year it is earned. There is no carry
forward provision for this credit.
Qualified business facility investment is the value of the real and tangible
Investment Tax Credit. A qualified firm may be eligible to receive a
personal property, except inventory or property held for sale to customers
10% investment tax credit for investment in excess of $50,000 in a Qualified
in the ordinary course of the taxpayer’s business, which constitutes the
Business Facility (QBF). This credit may be carried forward for the next 10
qualified business facility, or which is used by the taxpayer in the operation
tax years as long as the firm is recertified in the tax year the carry forward
of the QBF, during the taxable year for which the HPIP investment tax
is used. Schedule K-59 must be completed for each QBF in the initial year
credit is claimed. The value of such property during the taxable year shall
and, if necessary, for any carry forward year for each location.
be: (1) its original cost if owned by the taxpayer; or (2) eight times the net
Do not send any enclosures with this credit schedule. If additional
annual rental rate if leased by the taxpayer.
information is needed, the Department of Revenue reserves the
All three of the following conditions must be met for property to be
right to request it at a later date.
eligible for the HPIP investment tax credit:
• Only those expenditures for real and tangible personal property
A “qualified firm” is a for-profit business establishment, subject to
made during the certification period will qualify for the credit:
state income, sales or property taxes, identified:
• The property must be capable of being used by the taxpayer or must
• under the North American Industry Classification System (NAICS)
designation 2211 through 2213, major groups 3311 through 3399,
be used by the taxpayer in the operation of the QBF during the
major groups 4231 through 4251, major groups 4811 through 5191,
certification period (no property classified or defined as construction
major groups 5211 through 7213, and major groups 8111 through
in process); and
9281; OR
• Only that property identified on the capital investment project form
• as a corporate or regional headquarters or back-office operation of a
submitted to KDOC shall be eligible.
national or multinational corporation regardless of NAICS designation.
Current Year Investment Calculation:
A business establishment may be assigned a NAICS designation according
The QBF investment for HPIP purposes is computed based on a monthly
to the primary business activity at a single physical location in Kansas.
average of the HPIP qualified investment made during the certified or
There are additional qualifications to meet the definition of “qualified firm.”
recertified months that fall within the taxpayer’s tax year. The investment
Contact KDOC for information.
or expenditures must meet the qualifications listed above. This property
A “qualified business facility investment” is the value of the real
will also be present in the property factor for apportionment purposes.
and tangible personal property, except inventory or property held for sale to
The QBF investment shall be determined by dividing the sum of the total
customers in the ordinary course of business, which constitutes the qualified
cumulative value of such HPIP property on the last business day of each
business facility. See K.S.A. 79-32,154(e).
full calendar month during the portion of the taxable year during which
“Corporate headquarters” is a facility where principal officers of
the QBF was in operation by the number of full calendar months the QBF
the corporation are housed and from which direction, management or
is in operation.
administrative support for transactions is provided.
Base Year Investment Calculation:
LINE BY LINE INSTRUCTIONS
For investment in a QBF, which facility existed and was operated by
PART A – GENERAL INFORMATION
the taxpayer prior to the investment, a base amount of investment will be
deducted from the current year’s HPIP investment average. The base
Line 1: Enter the period certified by KDOC.
shall consist of the average HPIP investment made by the taxpayer in all
Line 2: Enter the certification number received from KDOC.
prior years at this QBF. This property will also be present in the property
PART B – HPIP TRAINING AND EDUCATION CREDIT
factor for apportionment purposes. The base QBF investment for HPIP
purposes shall be determined by dividing the sum of the total cumulative
The training and education credit is authorized through the High
value of such HPIP property on the last business day of each full calendar
Performance Incentive Program (HPIP) and shall be claimed in the tax year
month during the portion of the prior taxable year during which the QBF
for which the company is certified. If the HPIP certification period should
was in operation by the number of full calendar months the QBF was in
overlap two tax years, the taxpayer shall have the choice of which tax
operation. Only HPIP QBF investment that is related to the facility will be in
year to claim the training and education tax credit.
the base.
Line 3: Enter the total qualified business cash investment in the training
Line 10: Enter street address and city of the qualified business facility.
and education of the qualified firm’s employees during the 12-month
measurement period specified on your HPIP eligibility form or certification
Lines 11a through 11l:
letter. Do not include spending used to match the state’s Kansas Industrial
Column (1) – Filing Period: Enter the months in the order of the filing
Retraining (KIR) program.
period being used by the legal entity.
Line 4: Enter the total dollar amount expended for payroll costs for both full
Column (2) – Base year-QBF Monthly Investment: In the heading
time and part time positions. This should correspond to the amount
of Column (2), enter the tax year prior to the tax period of the qualifying
reported on your Employers’ Quarterly Wage Report and Contribution
credit (Base). Lines 11a through 11l of Column (2) are used to compute
Return, Form K-CNS 1001.
activity at the QBF prior to the year in which a credit is qualified. This
prior year is referred to as the “base” year. If the QBF was in operation
Line 5: Multiply line 4 by 2% and enter the result.
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