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Economic Development
Corbin Main Menu
KREDA KREDA KREDA KREDA KREDA K.R.E.D.A. KENTUCKY ECONOMIC DEVELOPMENT FINANCE AUTHORITY KEDFA K.E.D.F.A. INDIANA INCENTIVES TENNESSEE INCENTIVES OHIO INCENTIVES ILLINOIS INCENTIVES BUSINESS INCENTIVES GRANTS TAX CREDITS SITE DEVELOPMENT MANUFACTURING BUSINESS EXPANSION MANUFACTURING EXPANSION CINCINNATI LOUISVILLE LEXINGTON KNOXVILLE NASHVILLE INDIANAPOLIS COLUMBUS DAYTON BOWLING GREEN MEMPHIS ST. LOUIS MISSOURI VIRGINIA WEST VIRGINIA
EASTERN TENNESSEE OHIO TENNESSEE ARKANSAS ECONOMIC DEVELOPMENT
TENNESSEE BUSINESS INCENTIVES OHIO BUSINESS INCENTIVES INDIANA BUSINESS INCENTIVES GEORGIA BUSINESS INCENTIVES ILLINOIS BUSINESS INCENTIVES MICHIGAN BUSINESS INCENTIVES ALABAMA BUSINESS INCENTIVES TAX BREAKS TAX INCENTIVES
KENTUCKY BUSINESS INCENTIVES
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KENTUCKY ADVANTAGE: STRONG FINANCIAL INCENTIVES
Knox and whitley Counties
Created and
managed by the Kentucky Economic Development Finance Authority, The Kentucky
Rural Economic Development Act and Local Government Development Fund offers
businesses substantial tax credits for locating and expanding their
operations in selected Kentucky counties, including Knox and Whitley
Counties of Southeastern Kentucky. Companies with projects approved under
KREDA may potentially receive state income tax credits and job assessment
fees for up to 100% of annual debt service costs for up to fifteen years on
land, buildings, site development, building fixtures and equipment used in a
project, as well as potential property tax credits.
Any business entity that establishes new manufacturing plants or expands
existing manufacturing operations in qualifying Kentucky counties is
eligible.
All fixed assets of the project are potentially eligible for recovery
through the KREDA tax incentives. The project's real estate must be acquired
by the approved company through either the acquisition of title or through a
capital lease as defined under FASB13. The project must also create a
minimum of 15 new jobs for Kentucky residents and the project's total
capital investment must exceed $100,000.
A KREDA approved company is eligible to receive a 100 percent credit against
the Kentucky income tax liability on taxable income generated by the project
and may also utilize the Job Development Assessment Fee ("JDAF"). The JDAF
entails a withholding equal to 4 percent of the gross wages from the
employees hired as a result of the KREDA approved project. The employees
recoup the JDAF through a state income tax credit equal to the amount of
JDAF withheld. As a convenience, the JDAF is offset against normal state
income tax withholding for each pay period and the employee receives credit
on the W-2 statement as if the JDAF was withheld and remitted to the state.
The total KREDA incentives (the tax credit and job development assessment
fee) are limited to the amount authorized in an incentive agreement over a
maximum term of fifteen years. Any unused incentives remaining after the
incentive agreement has expired are not accessible.
Minimum Employee Compensation Pursuant to KRS 154.22-040, any company participating in the KREDA program is required to compensate at least 90 percent of its employees whose jobs were created as a result of the project with a minimum hourly wage established for the county in which the project locates. In addition, the participating company must provide its new employees with benefits as defined in KRS 154.22-010 equal to 15 percent of the county minimum hourly wage. If employee benefits are less than 15 percent, a company may utilize a combination of wages and employee benefits equivalent to 115 percent of the county minimum hourly wage.
The Process
This information, updated June 2007, provides an overview of the KREDA program. For a full discussion of the program requirements, please see KRS 154.22-010 through 154.22-102. As with all state administered tax incentive programs, any inducements offered to an eligible company under the KREDA program are negotiated by Cabinet for Economic Development officials.
Any business entity that establishes new manufacturing plants or expands existing manufacturing operations in Kentucky.
Eligible Projects The project must involve a minimum investment of $100,000 and create at least 15 new full-time jobs for persons subject to Kentucky income tax. Eligible costs include expenditures for land acquisition, site development, utility extensions, architectural and engineering services, building, construction or rehabilitation, purchases of building fixtures including installation costs, and manufacturing equipment. The project’s real estate must be acquired by the approved company through either the transfer of title to the company or through a capital lease as defined under FASB13. Eligible manufacturing equipment cost is limited to $10,000 tax credit for every full-time job created over a two-year period.
Tax Incentives A KIDA approved company is eligible to receive up to a 100 percent credit against the Kentucky income tax liability generated by the project OR to utilize a 3 percent Job Development Assessment Fee (JDAF). The JDAF entails a withholding from the employees hired as a result of the KIDA approved project equal to 3 percent of the employees’ gross wages. The employees recoup the JDAF through a state income tax credit equal to the amount withheld. Either option is limited to the KIDA eligible investment costs authorized in an investment agreement. The tax credit or JDAF remains in place until the authorized incentive amount is realized or for a period of ten years, whichever occurs first. Unused credits may be carried forward for the term of the KIDA agreement, however, unused credits expire at the ten-year maturity of the incentive agreement.
Minimum Employee Compensation Pursuant to KRS 154.28-080, any company participating in the KIDA program is required to compensate at least 90 percent of its employees whose jobs were created as a result of the project with a minimum hourly wage established for the county in which the project locates. In addition, he participating company must provide its new employees with benefits as defined in KRS 154.28-010 equal to 15 percent of the county minimum hourly wage. If employee benefits are less than 15 percent, a company may utilize a combination of wages and employee benefits equivalent to 115 percent of the county minimum hourly wage.
The Process
This information, updated July 2007, provides an overview of the KIDA program. For a full discussion of the program requirements, please see KRS 154.28-010 through 154.28-140. As with all state administered tax incentive programs, any inducements offered to an eligible company under the KIDA program is negotiated by Cabinet for Economic Development officials. KIDA Program rules and guidelines subject to change without notice.
The Kentucky Investment Fund Act (KIFA) offers a 40% tax credit to certain personal and corporate investors in approved investment funds. The purpose of KIFA is to encourage capital investment in the Commonwealth of Kentucky, to encourage the establishment of small businesses in Kentucky, to provide additional jobs, and to encourage the development of new products and technologies in the state through capital investments. After credits are allocated to a fund, the credits are proportionately granted to the fund’s investors upon its completion of qualified investments. The Commonwealth, through the Kentucky Economic Development Finance Authority (KEDFA), allocates the credits to investment funds.
Eligible Companies
Any business entity that establishes a new or expanded service or technology, manufacturing, or tourism attraction activity in Kentucky.
Eligible Projects
The project must involve a minimum investment of $500,000. Eligible investment costs include expenditures for research and development equipment, acquisition of real estate property, building, and construction materials, construction, installation, and rehabilitation of fixtures and facilities, necessary or desirable for improvement of real estate owned, used, or occupied by the approved company.
Tax Incentives
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. Sales tax paid on expenditures made prior to KEDFA approval as an "approved company" will not be refunded.
The Process
FEES There is a non-refundable application fee of one tenth of one percent based upon the investment amount not to exceed $500 payable upon submission of the KEIA application.
Kentucky's LGEDF program was created by the General Assembly in 1992 to promote economic development in Kentucky’s coal-producing counties. The program is funded through an allocation of coal severance tax receipts. Grants are provided to eligible coal-producing counties to assist in diversifying local economies beyond a dependence on coal. The program is divided into two funding pools – the single county pool and the multi-county pool.
Eligible Grantees
LGEDF grants are available only to counties having generated coal severance and process taxes in the current year, or any of the previous four years. In the case of multi- county or regional projects, non-coal counties may be eligible, if two or more coal counties participate in the project.
Types of LGEDF Projects
Eligible Activities
The following general activities are eligible under the LGEDF program.
When a company or business becomes a participant in a project, eligibility is limited to the construction or development of facilities for manufacturing, processing, or assembly. Facilities for non-manufacturing firms that add value to a product are also eligible. Retail facilities and companies engaged in coal mining, processing, or transportation are not eligible for assistance.
Application Process
Counties should first submit a preliminary proposal in the form of a letter outlining the industrial development project and an explanation of how the funds are to be used. If necessary, the Cabinet will award a grant sufficient to conduct preliminary studies to evaluate the need and feasibility of the project. Upon approval of the proposal, the Cabinet will invite the county to submit a formal grant application. A fiscal court resolution authorizing the county to file an application is required as part of the application process. The application will undergo review for approval by the Commissioner of the Department for Regional Development, before ultimately being submitted to the Kentucky Economic Development Finance Authority for final approval. Upon approval, all parties will be required to execute a formal Grant Agreement before funds are disbursed.
The Bluegrass State Skills Corporation's (BSSC) basic purpose is to improve and promote employment opportunities for the residents of the Commonwealth through training grants and investment credits for skills training programs which create partnerships with business and industry who absorb a share of program costs.
The BSSC works with business and industry and Kentucky's educational institutions to establish programs of skills training. The BSSC is attached to the Cabinet for Economic Development for administrative purposes in recognition of the relationship between economic development and skills training efforts.
The purpose of the BSSC is to improve and promote employment opportunities for the residents of the Commonwealth through agreements for skills training programs.
Eligible Companies A company that is eligible to receive KJDA benefits is a service or technology related company such as a data processing, research and development, or any other non-manufacturing, non-retail "white collar" company. The company must provide more than 75 percent of its services, as generated through revenues, to persons located outside the state. Additionally, the company must increase its employment of Kentucky residents by a minimum of 15 new, full-time jobs at the project site.
Approved Costs Approved Costs are defined as up to 50 percent of the start-up costs, which include the costs associated with furnishing and equipping the facility, and up to 50 percent of the annual rent costs. (Note: Total start-up costs are limited to a maximum of $20,000 per new full time job for Kentucky residents subject to personal income tax, of which 50 percent, or a maximum of $10,000, can be recouped through the incentives.)
Inducements The company receives a 100 percent credit against the state income tax arising from the project, and a wage assessment of up to 5 percent of the increased gross payroll of the new employment resulting from the project. Total assessments and credits cannot exceed the Approved Costs, and cannot be taken beyond a 10-year period.
Employee Tax Credit If the company uses the wage assessment portion of the program, each employee is entitled to an income tax credit against the Kentucky income tax up to 4/5 of the total wage assessment. In addition, the employee is entitled to credit against the local occupational tax up to 1/5 of the total wage assessment.
Fees There is a $500 non-refundable application fee payable upon submission of the KJDA application. Fees that the company may expect to incur as a result of Final Approval include an administrative fee equal to 1/10 of 1 percent with a minimum of $1,000. In addition, the company will incur legal fees necessary for the preparation of the Service and Technology Agreement.
Minimum Employee Compensation Pursuant to KRS 154.24-090, any company participating in the KJDA program is required to compensate at least 90 percent of its employees whose jobs were created as a result of the project with a minimum hourly wage established for the county in which the project locates. In addition, the participating company must provide its new employees with benefits as defined in KRS 154.24-090 equal to at least 15 percent of the county minimum hourly wage. If employee benefits are less than KJDA projects may receive a 100% credit against the state income tax arising from a project and may collect a job assessment fee of up to 5.0% of the gross wages of each employee whose job is created by the project and who is subject to Kentucky income taxes. Amounts can be up to 50% of project start-up costs and up to 50% of annual facility rental cost or rental value for up to ten years. The local community must approve the project prior to submitting an application for KJDA.
This information, updated July 2007, provides an overview of the KJDA program. For a full discussion of the program requirements, please see KRS 154.01-010 through 154.01-150. As with all state administered tax incentive programs, any inducements offered to an eligible company under the KJDA program is negotiated by Cabinet for Economic Development officials. Program specifications subject to change without notice.
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All incentive information on this website subject to change without notice. |
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Copyright © 2002-2008, www.corbinkentucky.us, All Rights Reserved
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To
help your new or expanding business, Southeastern Kentucky offers some of
the strongest financial incentive programs available in the United States.
Millions of dollars are budgeted annually and awarded to qualifying
companies in the form of state and local tax credits, job assessment fees,
training grants and other incentives to help develop long-term relationships
between solid, well-run organizations and Southeastern Kentucky. 
