Schedule K-59 - Kansas High Performance Incentive Program (Hpip) Credits Page 3
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4INSTRUCTIONS FOR SCHEDULE K-59
GENERALINFORMATION
Line 7: Enter amount from line 6 or $50,000, whichever is less. This is the
total training and education credit for amount of cash investment made.
Schedule K-59 provides an investment schedule and a carry forward
Line 8: Partners, shareholders, or members must enter their proportionate
schedule. Please read all directions before completing this schedule.
share percentage in the partnership or S corporation. All other taxpayers
The High Performance Incentive Program (HPIP) provides for two types
enter 100%.
of credits: 1) Training and Education Credit [K.S.A. 74-50,132]; and, 2)
Line 9: Multiply line 7 by line 8. This is the amount of credit allowable for
Investment Tax Credit [K.S.A. 79-32,160a(e)]. Certification from the Kansas
training and education. Apply this credit to your tax liability before any
Department of Commerce (KDOC) is the initial requirement for either of the
other credits.
credits and must be maintained with your records.
Line 9a: Enter the amount of training and education credit used against
Training and Education Credit. A qualified firm that invests in the
your tax liability (cannot exceed your tax liability). Enter this amount
training and education of its employees and pays higher than average
on the appropriate line of Form K-40, Form K-41, Form K-120, or Form
wages is eligible to receive a tax credit. The credit is the amount of
K-130.
training and education expenditures that exceed 2% of the wages, limited
PART C - HPIP INVESTMENT CREDIT
to $50,000. 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 ($1,000,000
in the ordinary course of the taxpayer’s business, which constitutes the
for the counties of Douglas, Johnson, Sedgwick, Shawnee and Wyandotte)
qualified business facility, or which is used by the taxpayer in the operation
in a Qualified Business Facility (QBF). This credit may be carried forward
of the QBF, during the taxable year for which the HPIP investment tax
for the next 16 tax years as long as the firm is recertified in the tax year
credit is claimed. The value of such property during the taxable year shall
the carry forward is used. Schedule K-59 must be completed for each
be: 1) its original cost if owned by the taxpayer; or 2) eight times the net
QBF in the initial year and, if necessary, for any carry forward year for
annual rental rate if leased by the taxpayer.
each location.
All three of the following conditions must be met for property to be
Do not send any enclosures with this credit schedule. If additional
eligible for the HPIP investment tax credit:
information is needed, KDOR (Kansas Department of Revenue)
• Only those expenditures for real and tangible personal property made
reserves the right to request it at a later date.
during the certification period will qualify for the credit:
A “qualified firm” is a for-profit business establishment, subject to
• The property must be capable of being used by the taxpayer or
state income, sales or property taxes, identified:
must be used by the taxpayer in the operation of the QBF during the
certification period (no property classified or defined as construction
• under the North American Industry Classification System (NAICS)
in process); and
designation 2211 through 2213, major groups 3311 through 3399,
• Only that property identified on the capital investment project form
major groups 4231 through 4251, major groups 4811 through 5191,
submitted to KDOC shall be eligible.
major groups 5211 through 7213, and major groups 8111 through
9281; OR
Current Year Investment Calculation:
• as a corporate or regional headquarters or back-office operation of a
The QBF investment for HPIP purposes is computed based on a monthly
national or multinational corporation regardless of NAICS designation.
average of the HPIP qualified investment made during the certified or
A business establishment may be assigned a NAICS designation
recertified months that fall within the taxpayer’s tax year. The investment
according to the primary business activity at a single physical location in
or expenditures must meet the qualifications listed above. This property will
Kansas. There are additional qualifications to meet the definition of
also be present in the property factor for apportionment purposes. The QBF
“qualified firm.” Contact KDOC for information.
investment shall be determined by dividing the sum of the total cumulative
A “qualified business facility investment” is the value of the real
value of such HPIP property on the last business day of each full calendar
and tangible personal property, except inventory or property held for sale
month during the portion of the taxable year during which the QBF was in
to customers in the ordinary course of business, which constitutes the
operation by the number of full calendar months the QBF is in operation.
qualified business facility. See K.S.A. 79-32,154(e).
Base Year Investment Calculation:
“Corporate headquarters” is a facility where principal officers of
For investment in a QBF, which facility existed and was operated by
the corporation are housed and from which direction, management or
the taxpayer prior to the investment, a base amount of investment will be
administrative support for transactions is provided.
deducted from the current year’s HPIP investment average. The base shall
LINE BY LINE INSTRUCTIONS
consist of the average HPIP investment made by the taxpayer in all prior
years at this QBF. This property will also be present in the property factor
PART A – GENERAL INFORMATION
for apportionment purposes. The base QBF investment for HPIP purposes
shall be determined by dividing the sum of the total cumulative value of
Line 1: Enter the period certified by KDOC.
such HPIP property on the last business day of each full calendar month
Line 2: Enter the certification number received from KDOC.
during the portion of the prior taxable year during which the QBF was in
PART B – HPIP TRAINING AND EDUCATION CREDIT
operation by the number of full calendar months the QBF was in operation.
Only HPIP QBF investment that is related to the facility will be in the base.
The training and education credit is authorized through HPIP and shall be
Line 10: Enter street address and city of the qualified business facility.
claimed in the tax year for which the company is certified. If the HPIP
Lines 11a through 11l:
certification period should overlap two tax years, the taxpayer shall have
Column (1) – Filing Period: Enter the months in the order of the
the choice of which tax year to claim the training and education tax credit.
filing period being used by the legal entity.
Line 3: Enter the total qualified business cash investment in the training
Column (2) – Base year-QBF Monthly Investment: In the heading
and education of the qualified firm’s employees during the 12-month
of Column (2), enter the tax year prior to the tax period of the qualifying
measurement period specified on your HPIP eligibility form or
certification letter. Do not include spending used to match the state’s
credit (Base). Lines 11a through 11l of Column (2) are used to compute
Kansas Industrial Retraining (KIR) program.
activity at the QBF prior to the year in which a credit is qualified. This
Line 4: Enter the total dollar amount expended for payroll costs for both
prior year is referred to as the “base” year. If the QBF was in operation
full time and part time positions. This should correspond to the amount
in the prior year and the taxpayer had been certified previously under
reported on your Employers’ Quarterly Wage Report and Contribution
the HPIP program, enter the total cumulative value of HPIP investment
Return, Form K-CNS 1001.
at this QBF on the last business day of each full calendar month during
Line 5: Multiply line 4 by 2% and enter the result.
the portion of the preceding tax year during which the QBF was in
Line 6: Subtract line 5 from line 3 and enter the result.
operation.
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