Federal Income Tax Depreciation Deduction on Green Technology Purchases
Incentive:
Allows businesses that invest in solar, wind, or geothermal technologies to recover costs through depreciation deductions on Federal income tax return. The depreciation deductions are taken over 5 years with a 50% bonus deduction in the 1st year that the equipment is purchased.
Purpose:
To encourage the utilization of alternative energy sources.
Principal Criteria:
50% bonus depreciation applies to products bought before 1/1/2005.
Easements must be obtained for solar applications.
Contact Information:
Readers are advised to consult an accountant, tax attorney, or other professional tax advisor or I.R.S. for help in determining whether or not this incentive pertains to their own situation.
Federal Tax Credit for Employment of Low-Income People
Incentive:
A federal income tax credit of up to $2,400 per “qualified” new worker. Workers who meet eligibility include:
- Members of families that receive TANF or AFDC assistance.
- 18-24 year old food stamp recipients.
- Veteran Food Stamp recipients.
- Disabled persons completing rehabilitation.
- Low-income ex-felons.
Purpose:
To provide employment opportunities for those receiving public assistance or have special circumstances.
Principal Criteria:
Prospective employees subject to certification of specific target-group status.
Contact Information:
Ms. Barbara Gilley
Work Opportunity Tax Credit
Dept. for Employment Services
Division of Field Services
275 E. Main Street, 2W
Frankfort, KY 40621
(502) 564-7456
Fax 564-7459
BarbaraA.Gilley@ky.gov
Cost Reimbursement for Tourism-Related Development
Incentive:
Cost reimbursement of up to 25% of the project's cost can be returned over a 10-year period. Reimbursement amounts are determined by the amount of state sales tax generated by visitors to the development.
Purpose:
Economic development via the creation of tourist-oriented facilities that attract visitors to Kentucky.
Principal Criteria:
25% of project’s guests must originate from outside of Kentucky.
Approval required before commencing any construction.
Projects must cost at least $1,000,000 and be open for business 100 days a year.
Projects that are strictly retail will not be considered.
Contact Information:
M. Todd Cassidy, Director,
Economic and Community Development
Kentucky Commerce Cabinet
Department of Tourism
2200 Capital Plaza Tower, 500 Mero Street
Frankfort, Kentucky 40601
Phone: (502) 564-8067
Fax: (502) 564-7588
Email: Todd.Cassidy@ky.gov
Kentucky High Tech Construction Pool
Incentive:
Grants and loans to fund the construction of facilities used for research and development.
Purpose:
Creation of high-tech jobs and knowledge-based companies by increasing research and development and commercialization capacities within Kentucky.
Principal Criteria:
Applies to public/private partnerships.
Subject to approval by the Kentucky Economic Development Finance Authority.
Contact Information:
William G. Brundage, Ph.D.
Commissioner
Office for the New Economy
Commonwealth of Kentucky
702 Capitol Avenue (Suite 256)
Frankfort, KY 40601-3448
Phone: (502) 564-0531
Fax: (502) 564-0963
bill.brundage@ky.gov
KY Capital Investment Tax Credits
Incentive:
State tax investment credit of 40% to personal and private investors who contribute to approved investment funds. These funds make “Qualified Investments” in Kentucky-based small businesses. Overall, annual tax credit amounts of $3,000,000 were made available for fiscal years 2003 and 2004.
Purpose:
To encourage the establishment of small businesses, provide jobs, and encourage the development of new products and technologies.
Principal Criteria:
Fund must have contributions of $500,000 or greater before credits are allocated.
Fund must have at least 4 unaffiliated investors with no one person contributing more than 40% of the entire fund.
Eligible companies must have 50% of the company’s assets, operations, and employees located in Kentucky; companies are limited to no more than 100 employees.
Contact Information:
William G. Brundage, Ph.D.
Kentucky Investment Fund Act
Office of the New Economy
702 Capitol Avenue
Capitol Annex, Room 256
Frankfort, KY 40601
(502) 564-0531
bill.brundage@ky.gov
KY Grants for Worker Training
Incentive:
Grants to cover 50% of the eligible costs associated with training or retraining prospective and incumbent employees, including curriculum development, instructor fees, instructional materials, and training equipment.
Purpose:
To improve worker skills and create opportunities for employment in Kentucky.
Principal Criteria:
Company must commit resources to the training program that are at least equivalent to the grant amount.
Contact Information:
Ken Carroll, Executive Director
Bluegrass State Skills Corporation
500 Mero Street
Capital Plaza Tower
Frankfort, Kentucky 40601
Phone: (502) 564-2021
Fax: (502) 564-4669
Ken.Carroll@ky.gov
KY Income Tax Credit for the Installation of Post-Consumer Waste Equipment
Incentive:
State income tax credit of up to 50% of the cost of installing equipment that is used to process post-consumer waste or used to manufacture products primarily composed of recycled materials.
Purpose:
To promote efficient resource usage practices.
Principal Criteria:
Credit is limited to 10% of total allowable credit amount for the year of the equipment purchase with the balance carried forward, never to exceed 25% of state income tax liability.
Contact Information: Readers are advised to consult an accountant, tax attorney, or other professional tax advisor for help in determining whether or not this incentive pertains to their own situation.
KY Innovation Concept Phase Funding Pool
Incentive:
Grants of up to $25,000 to assist with feasibility and concept development.
Purpose:
Spur economic development based upon scientific and technological innovation.
Principal Criteria:
Projects to be conducted in partnership with a Kentucky university.
Contact Information:
Jim Clifton
Kentucky Science and Technology Corporation
200 W. Vine St., Ste. 420
Lexington, KY 40507
Phone: (859) 233-3502 ext. 229
Fax: (859) 259-0986
jclifton@kstc.com
KY Linked Deposit Investment Loan Program
Incentive:
Loans of up to $100,000, repayable over a maximum of 7 years, to cover annual working capital, interest costs, capital expenses, and/or debt refinancing. Applicants receive loans through private lenders, who lend at below-market rates.
Purpose:
Assist small businesses obtain financing.
Principal Criteria:
Limited to Kentucky-based small businesses that have less than 50 employees and gross earnings of $1,000,000 per year or less.
Lenders cannot lend to ventures in which they have a vested interest.
Contact Information:
Michael Gray, Director
Small and Minority Business Division
67 Wilkinson Boulevard
Frankfort, KY 40601
Phone: (502) 564-2064
Fax: (502) 564-9758
michael.gray@ky.gov
KY Research and Development Voucher Program
Incentive:
Matching funds of up to $100,000 per year over two years to small and medium-sized companies to undertake research and development with a Kentucky university.
Purpose:
Meet the goals of the Kentucky Postsecondary Education Improvement Act.
Principal Criteria:
Projects to be conducted in partnership with a Kentucky university.
Contact Information:
William G. Brundage, Ph.D.
Commissioner
Office for the New Economy
Commonwealth of Kentucky
702 Capitol Avenue (Suite 256)
Frankfort, KY 40601-3448
Phone: (502) 564-0531
Fax: (502) 564-0963
bill.brundage@ky.gov
KY Research Facilities Tax Credit
Incentive:
5% state income tax credit of the costs of constructing, remodeling, and/or equipping research facilities.
Purpose:
Spur investment in technology-based companies and industries.
Principal Criteria:
None listed.
Contact Information:
Readers are advised to consult an accountant, tax attorney, or other professional tax advisor for help in determining whether or not this incentive pertains to their own situation.
KY Skills Training Investment Credits for Worker Training
Incentive:
Kentucky personal or corporate tax credits not to exceed a maximum amount of $100,000 per company per fiscal biennium to cover 50% of eligible occupational or skills upgrade training costs, which include: instructors, administrative fees, supplies, equipment, facility leasing, and employee wages.
Purpose:
Development of a skilled workforce.
Principal Criteria:
Tax credit applies to workers who are Kentucky residents.
Company completes all training one year after the preliminary approval by BSSC.
Company can submit one application every fiscal biennium (July 1, 2004 – June 30, 2006).
Credits can be carried forward for three years.
Contact Information:
Ken Carroll, Executive Director
Bluegrass State Skills Corporation
500 Mero Street
Capital Plaza Tower
Frankfort, Kentucky 40601
Phone: (502) 564-2021
Fax: (502) 564-4669
Ken.Carroll@ky.gov
KY State Tax and Wage Assessment Credits for Job Creation
Incentive:
Credits that cover up to 50% of the start-up costs and 50% of the annual rent expenditures for service-based or technology-based companies. Credits can be claimed on up to 100% of state tax liability and 5% of wage assessments for new employees over a 10-year period.
Purpose:
To create non-retail,
non-manufacturing jobs in the service sector or in technology-related fields such as data processing or research and development.
Principal Criteria:
Start up costs limited to $20,000 per job created.
75% of firm’s revenues must come from outside the state.
Must create a minimum of 15 new, full-time jobs for Kentucky residents.
Minimum employee compensation package must equal 115% of county minimum hourly wage.
Contact Information:
Sheila Mulligan
Kentucky Jobs Development Act
Kentucky Cabinet for Economic Development
Department of Financial Incentives
500 Mero Street
Frankfort, Kentucky 40601
Phone: (502) 564-4554 Ext. 4409
sheila.mulligan@ky.gov
KY State Tax Credits for Industrial Development
Incentive:
Recovery of up to 100% of approved costs such as land acquisition, equipment purchases and construction. Eligible companies may receive credits equal to 100% of Kentucky income tax liability or collect a job assessment fee equal to 3% of the gross wages paid to a newly employed Kentucky taxpayer. The costs are recoverable over a maximum of ten years.
Purpose:
Creation of jobs via the expansion of existing or establishment of new manufacturing operations in Kentucky.
Principal Criteria:
Minimum investment of $100,000 and creation of a minimum of 15 jobs for Kentucky taxpayers.
Eligible equipment costs limited to $10,000 per new job created.
Minimum employee compensation package must equal 115% of county minimum hourly wage.
Contact Information:
Steve Jones
Kentucky Industrial Development Act
Kentucky Cabinet for Economic Development
Department of Financial Incentives
2400 Capital Plaza Tower
Frankfort, Kentucky 40601
(502) 564-4554
RStephen.Jones@ky.gov
Incentive:
KY Unemployment State Tax Credit
Purpose:
$100 tax credit to hire people who have been unemployed for at least 60 days prior.
Principal Criteria:
To reward employers for hiring unemployed or inexperienced persons.
Contact Information:
Readers are advised to consult an accountant, tax attorney, or other professional tax advisor or I.R.S. for help in determining whether or not this incentive pertains to their own situation.
Low-Interest Loans for Tourism-Related Projects
Incentive:
Low-interest loans lent at a rate of 1% to 6% to cover 50% of project costs or $250,000, whichever is less.
Purpose:
Financing of small-scale tourism developments that serve to attract visitors to Kentucky and/or encourage them to remain in Kentucky longer.
Principal Criteria:
Financing available for fixed assets only.
Contact Information:
M. Todd Cassidy, Director,
Economic and Community Development
Kentucky Commerce Cabinet
Department of Tourism
2200 Capital Plaza Tower, 500 Mero Street
Frankfort, Kentucky 40601
Phone: (502) 564-8067
Fax: (502) 564-7588
Email: Todd.Cassidy@ky.gov
Low Interest Loans from KY Economic Development Finance Authority
Incentive:
Low-interest loans of up to $500,000 lent at a rate of 1%-5% (depending on the length of the term) to cover up to 25% of a project’s fixed costs. Financing can be combined with Community Development Block Grants and 504 loan financing. For projects of $100,000 or less, KEDFA loans can cover up to 45% of a project’s fixed costs.
Purpose:
To encourage tourism, industrial, or service based jobs.
Principal Criteria:
Retail projects not eligible.
Applicants submit $500 application fee and, if approved, a subsequent 1% commitment fee.
20% stock holders subject to personal guarantees.
Contact Information:
Don Goodin
Department of Financial Incentives
Kentucky Cabinet for Economic Development
500 Mero Street
Capital Plaza Tower
Frankfort, Kentucky 40601
Phone: (502) 564-4554 ext. 4413
Fax: (502) 564-7697
don.goodin@ky.gov
Tax Increment Financing: Infrastructure Development Areas
Incentive:
Eligible public facility improvement costs may be covered by up to 100% of the incremental property tax value increase (subject to certain exclusions) resulting from the development of previously undeveloped land.
Purpose:
Financing of facility improvements for eligible public purpose projects that serve to encourage economic growth and development.
Principal Criteria:
“Local Revenue Only Development Areas” entail that development projects do not utilize state revenues and require no review or authorization from the state.
Limited to no longer than a 20 year time period.
Limited to no more than 500 acres approved in a 12 month period.
Contact Information:
Terri Lovelace
Kentucky Cabinet for Economic Development
Department of Financial Incentives
500 Mero Street
Frankfort, KY 40601
Phone: 502.564.4554 ext. 4472
Fax: 502.564.7697
Terri.lovelace@ky.gov
Tax Increment Financing: Project Specific Development Areas
Incentive:
Project reimbursement of up to 80% of the incremental state tax value increase associated with the development of a project in order to cover up to 25% of the project's overall cost.
Purpose:
To encourage economic growth through the development of transportation services, information technologies, or commercial, industrial, recreational, tourism, or education related projects.
Principal Criteria:
Minimum capital investment of $10,000,000 for a single project or investment directly tied to the development area.
25% of project revenues must originate from visitors who live outside of Kentucky
Exclusively retail projects not eligible.
Minimum of 25 new full-time jobs created for Kentucky residents within 2 years of final authorization.
Limited to no longer than a 20 year time period.
Contact Information:
Terri Lovelace
Kentucky Cabinet for Economic Development
Department of Financial Incentives
500 Mero Street
Frankfort, KY 40601
Phone: 502.564.4554 ext. 4472
Fax: 502.564.7697
Terri.lovelace@ky.gov
Venture Capital and Early-Stage Investment Capital
Incentive:
Commonwealth Seed Capital, LLC makes investments in venture capital funds committed to investing in Kentucky companies and selected Kentucky-based knowledge-based companies.
Purpose:
Facilitate the commercialization of innovative ideas and technologies developed in Kentucky.
Principal Criteria:
Investment capital must be leveraged with other privately raised capital.
Contact Information:
Craig Greenberg
400 West Market Street,
32nd Floor
Louisville, KY 40202
Phone: (502) 589-5400
cgreenberg@fbtlaw.com
Local Commercial
Enterprise Zone Programs:
Sales Tax Exemptions/ Low-Interest Loans/ State Income Tax Credits/Training Assistance
Incentive:
State sales tax exemption for building materials, equipment, and motor vehicles purchased to build or remodel any structure within the designated Enterprise Zone.
Low-Interest Loans of up to $20,000.
State Income Tax Credit of up to $1,500 per “target” worker employed.
Zone businesses eligible for job training and employment programs.
Purpose:
To encourage the revitalization of economically distressed areas.
Principal Criteria:
Firms must be located within the designated Enterprise Zone.
Must apply for and receive certification from Mayor’s Office.
Fifty percent of a firms employees must perform substantially all of their work within the Zone.
New firms must hire at least 25% of its employees from the following “target” groups: Zone residents, persons previously unemployed, or persons previously receiving public assistance.
Existing businesses must increase either employment or capital investment by 20%.
Contact Information:
Mayor's Office of Economic Development
Lexington Fayette Urban County Government
12th Floor, Government Center
200 East Main Street
Lexington, Kentucky 40507
Tel: (859) 258-3131
Fax: (859) 258-3128
Non-Governmental Commercial
KU Renewable Energy Net Metering
Incentive:
Allows companies that install solar, wind, or small hydro systems to contribute electricity to the KU grid, thereby potentially reducing their overall electric bill should there be instances where contributions of renewable electricity exceed consumption of grid electricity.
Purpose:
To provide incentive for the utilization of renewable energy.
Principal Criteria:
Energy production system limited to a maximum capacity of 25 kW.
If customers generate more electricity than they consume, the credit is carried forward to the next month.
Contact Information:
Joshua Bills
Kentucky Solar Partnership
50 Lair Street
Mt. Vernon, KY 40456-9806
(606) 256-0077
Fax: (606) 256-2779
solar@a-spi.org
http://www.a-spi.org/solar
Purchase of Renewable Energy Production Credits
Incentive:
Mainstay Energy buys renewable energy credits from customers who install or have existing renewable energy systems. Payments, which differ by the type of production system, typically compute as follows:
- Solar PV: 2 - 5 cents/kWh
- Wind: 0.2 – 1.5 cents/kWh
- Biomass/biofuel electric: 0.1 – 1 cents/kWh
- Geothermal/Microhydro: 0.2 – 1 cents/kWh
Credits accumulate as electricity is generated and payments do not affect participation in other electricity sale or net metering programs.
Purpose:
Provide incentive for homes and businesses to install
renewable energy systems.
Principal Criteria:
Producer enters a contract with Mainstay for 3.5, or 10 year periods in which Mainstay purchases all renewable energy credits. 3 and 5 year contracts subject to $100 certification fee.
System owner must maintain title to renewable energy credits.
Systems that generate over 10 kW must be metered separately.
Contact Information:
John King
Mainstay Energy
161 E. Chicago Ave. Suite 41B
Chicago, IL 60611-2624
Phone: (877) 473-3682
Fax: (312) 896-1515
john.king@mainstay energy.com
www.mainstayenergy.com
OTHER INFORMATION
DISCLAIMER -– LFUCG provides this information as a service and convenience to the public-at-large. LFUCG makes no claims nor guarantees about the accuracy or completeness of the contents of this website and encourages all readers to contact the
organizations responsible for each incentive program to obtain complete and correct information. This website does not constitute an endorsement or recommendation by the LFUCG of any particular program nor is LFUCG responsible for the content or activities of any linked site.
