Kentucky Direct Financial Incentives 2011
Kentucky's economic development, finance, and tax organizations provide a range of incentive programs to initiate new business and commercial investment. Specific programs include direct state loans, small business loans, and skills training grants.
March 2011
The Kentucky Economic Development Finance Authority (KEDFA) offers a direct loan program at below-market interest for fixed-asset financing for agribusiness, tourism, industrial ventures or the service industry. Loans up to $500,000, with up to 50 percent participation, are available. The number of jobs created and wages paid are factors in determining the level of participation.
Small business loans:
The Kentucky Economic Development Finance Authority (KEDFA) also offers a small business loan program. Loans up to $100,000 are available to businesses with no more than 50 employees that are engaged in manufacturing, service, technology or agribusiness and will create at least one new job.
Skills training grants:
The Cabinet for Economic Development's Bluegrass State Skills Corporation (BSSC) works with business, industry and the state's educational institutions to establish programs of skills training. BSSC can partially reimburse the cost of instruction performed by an educational institution, an in-house instructor or a consultant, including the necessary texts and supplies. BSSC reimburses companies for 50 percent of eligible costs. BSSC can also provide assistance with travel-related expenses for new and expanding industries for an employee to travel to another company facility or equipment vendor location and return to train others at the Kentucky plant. Eligible train-the-trainer activities also include company employees traveling from other locations to the applicant's site.
The Skills Training Investment Credit Act:
Allows existing companies to recover up to 50 percent of approved costs for occupational and skills upgrade training through an income tax credit limited to $500 per employee not to exceed $100,000 per company per biennium. Credits can be carried forward for three successive years. Training can be given by company employees, instructors from educational institutions, or consultants on contract.
Tax Incentives
Kentucky Business Investment (KBI) Program:
Eligible companies must be engaged in one of the following activities: manufacturing; agribusiness; be a regional or national headquarters operation; or certain non-retail service or technology activities. The minimum requirements for eligible project is that it must create a minimum of 10 new, full-time jobs for Kentucky residents, the entity must incur at least $100,000 in costs, and meet a minimum level of wages and benefits. The tax incentives involved with this program are available for up to 15 years for enhanced incentive counties or up to 10 years for all other counties. The incentive may be taken as tax credits against Kentucky income tax imposed on corporate income or limited liability entity tax arising from the project (up to 100 percent), and a wage assessment of up to five percent of the gross wages of each employee whose job was created by the project in enhanced counties. Up to 4 percent (including up to 1 percent required local participation) of the gross wages of each employee whose job was created by the project in other counties may be available.
Kentucky Reinvestment Act (KRA):
KRA is available for eligible companies that are permanent Kentucky companies engaged in manufacturing. Requirements of the program include: incurring eligible equipment and related costs of at least $2.5 million; establishing an employment retention base of at least 85 percent of existing employment; not having received incentives under the Kentucky Industrial Revitalization Act (KIRA) within the previous five years; and the applicant certifying that the project would not be economically feasible without the incentives. Approved costs for recovery include eligible equipment and related costs up to: 50 percent of the eligible equipment and related costs and 100 percent of the job skills upgrade training costs. The incentive is available for up to 10 years and may be recovered via Kentucky income tax credits of up to 100 percent of tax imposed on the corporate income or limited liability tax generated by or arising from the project.