State Incentive Programs
State Incentive Programs
Kentucky Major Incentive Programs
Kentucky Business Investment Program (KBI)
Provides income tax credits and wage assessments to new and existing agribusiness, regional and national headquarters, manufacturing companies, and non-retail service or technology related companies that locate or expand operations in Kentucky. More...
Kentucky Tourism Development Act (KTDA)
A sales tax credit incentive program designed to develop Kentucky’s tourism industry. Approved attractions may recover up to 25% of initial investment through a sales tax credit over a 10- year period. Qualified tourism projects must:
- cost a minimum of $1 million;
- attract at least 25% of visitors from out-of-state by the fourth year;
- open to the public at least 100 days a year, and
demonstrate that the project will generate tax revenues to the state that will exceed the credit given to company and shall not adversely affect existing employment in Kentucky. More...
The mission of Kentucky Community and Technical College System (KCTCS) is to serve as "the primary provider" of workforce training "to meet the needs of existing and new business and industry."
Unlike incentive programs which "fund training," KY WINS is designated to promote learning focused on developing high performance work organizations and, most importantly, provide workers with the world-class transferable skills that will enable them to master technology and foster innovation and entrepreneurship. These skills will provide for the mastery of specific occupational/technical competencies and workforce skills in critical thinking, problem solving, ability to work in teams, communication, math, science and other critical competencies required in a global economy.
KY WINS will support projects for:
- existing Kentucky companies who are expanding and creating new jobs
- existing Kentucky companies who are requiring employees to learn new skills in order to retain their jobs
- companies who are contributing to Kentucky's economic development
Reimbursable expenses through KY WINS include:
- purchased training materials
- in-house produced training materials
- job profiling
- facility rental
KY WINS will provide funding for 75% of the total cost of the services to be delivered through the project. KCTCS will add a 10% administrative fee to all KY WINS projects based on the total cost of the services outlined in the Budget and Training Plan. The company will be responsible for paying the remaining 25% plus the 10% KCTCS administrative fee.
Kentucky Enterprise Initiative Act (KEIA)
A KEIA approved company is eligible to receive a refund of sales and use tax paid for construction materials and building fixtures and for equipment used in research and development purchased during the life of the project not to exceed the amount authorized in the memorandum of agreement. An approved company has 18 months from the date of KEDFA approval to purchase materials eligible for refund. KEDFA may grant a 12 month extension for good cause. The total tax refund incentive available for commitment by KEDFA for all projects, for each fiscal year, is limited to $20,000,000 for building and construction materials and $5,000,000 for equipment used for research and development.
KEIA will benefit eligible businesses who complete the process:
- The company makes application to KEDFA.
- The total amount of refund available to a project is negotiated with the Cabinet.
- KEDFA designates the applicant as a preliminarily approved company, approves the project, and enters into a memorandum of agreement with the company setting forth the maximum refund available under KEIA.
- The company completes its project and provides KEDFA with documentation in connection with the project's KEIA eligible investment costs as required by Exhibit A to the memorandum of agreement.
- The company provides the Department of Revenue with documentation as required by Exhibit B to the memorandum of agreement.
- The Department of Revenue will issue a refund check not to exceed the amount authorized to the approved company following verification of sales and use tax paid.
Low Interest Loans
KentuckyEconomic Development Finance Authority (KEDFA)
KEDFA encourages economic development, business expansion, and job creation by providing business loans to supplement other financing. This program provides low interest mortgage loans to industrial, service, tourism and agribusiness firms that do not use the KIDA or KJDA programs. Loans up to $500,000 are available at interest rates ranging from 1% to 7% on terms of 3 to 20 years to finance fixed assets. Terms and conditions apply.
Commonwealth Small Business Development Corporation (CSBDC)
The Commonwealth Small Business Development Corporation (CSBDC) is an economic development entity created under the auspices of the Small Business Administration (SBA) to foster development. The CSBDC is certified to make SBA 504 loans anywhere in the Commonwealth of Kentucky. Loans up to $750,000 are available, with the maximum loan term of 20 years for land and buildings and 10 years for equipment.
Linked Deposit Program
Provides loans up to $100,000 for small business and agribusiness for a period not to exceed seven years. The state will purchase certificates of deposit from participating lenders through the State Investment Commission, at the New York prime interest rate less 4%, but never less than 2%. Loans for small business will be reviewed by the Cabinet for Economic Development to ensure that loans comply with the statute.
Industrial Revenue Bonds (IRB)
IRBs issued by state and local governments in Kentucky can be used to finance manufacturing projects and their warehousing areas, major transportation and communication facilities, most healthcare facilities, and mineral extraction and processing projects. Bond funds may be used to finance the total project costs including engineering, site preparation, land, buildings, machinery and equipment, and bond issuance costs. Typically, Northern Kentucky communities issue IRB’s subject to full state and local property taxes.
Kentucky offers significant property tax and sales tax exemptions, particularly for manufacturers’ production equipment, raw materials and goods-in-process, industrial supplies and tools, pollution control equipment, containers, packaging materials, motor fuels, etc.
Job Training Grants
The Bluegrass State Skills Corporation (BSSC) provides funds for custom training to skill levels specified by employers. Funding levels are based on the number of Kentucky employees associated with the project, the wage levels of the employees, and the proposed training plan. Wages are not covered by the program. Grants are awarded on a reimbursement of costs basis. Training in job skills can range from entry level to advanced, including retraining and skills upgrading.
Kentucky's workforce training programs have been ranked fifth in the U.S. by Expansion Management mazazine.
Skills Training Investment Credit Act Guidelines
The Skills Training Investment Credit Act allows companies to recover 50% of their approved costs for occupational and skills upgrade training costs through an income tax credit limited to $500 per employee trained but not to exceed $100,000 per company per biennium.
- Qualified companies must have been engaged in qualified activity for not less than the last three years.
- An eligible employee is: (1) a full-time employee based on a minimum of 35 hours per week for more than 250 work days during the most recently ended calendar year; or (2) a person who has been employed by the qualified company for the last 12 calendar months.
- Investment credits can be carried forward for three successive years.
- A company can participate in BSSC regular grants and investment credit program, but cannot address the same expenses in both programs.
The Department for Employment Services offers a wide array of services designed to relieve many personnel concerns. The following is a very brief summary of the services available at no charge to employers.
The Department is a multi-functional agency responsible for the administration of a number of programs and services designed to assist employers in a variety of employment related areas which include:
- Job screening and referral services
- Unemployment insurance
- Labor market information
- Reemployment program for UI claimants
- KentuckyWorks Program
- Adult learning and testing
- Child care for any income eligible individual
- Resource room for resume writing and tutorials