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INCENTIVES

We are aggressively recruiting companies to invest in the region and provide employment to citizens of West Kentucky and Southern Illinois. Land prices are negotiable based on number of jobs, wages and the type and size of your investment. We will consider free or reduced land cost for prospects that will provide significant economic benefit to our region. Tax Incremental Financing (TIF) is available for infrastructure construction. The state of Kentucky offers incentives that encourage economic development and job creation. Please see www.thinkkentucky.com for additional information.

TAX INCENTIVES AND CREDITS

  • Approved companies may collect a cash rebate for up to 3 percent of the gross wages of each employee whose job is created by a project and who is subject to Kentucky's individual income tax OR take credits for up to one hundred (100) percent of approved costs, for up to ten (10) years, on land, buildings, site development, and building fixtures and equipment used in new or expanded manufacturing operations. These incentives are available under the Kentucky Industrial Development Act (KIDA). Companies must create at least fifteen (15) new full-time jobs and invest at least $100,000.
  • Credits for up to fifty (50) percent of start-up costs and fifty (50) percent of annual rental costs or rental value, over a ten (10) year period, for new or expanding service and technology intensive projects that provide more than seventy-five (75) percent of their services to out-of-state customers and create at least fifteen (15) jobs for Kentucky residents are available under the Kentucky Jobs Development Act (KJDA).
  • A credit is allowed to investors in certified venture capital funds equal to forty (40) percent of their proportional ownership share of all qualified investments made by the fund, not to exceed fifty (50) percent of their credit in any one (1) year.
  • A skills training investment tax credit may be awarded by Bluegrass State Skills Corporation as a nonrefundable credit for a company's occupational or skills upgrade training program. The credit is equal to fifty (50) percent of the approved cost incurred and may not exceed $500 per employee and $100,000 per company.
  • A state income tax credit equal to 5 percent of the qualified cost is available to new and existing businesses that construct, remodel, expand, or equip research facilities, but does not include replacement property. Any unused credit may be carried forward for ten (10) years.

PROPERTY TAX EXEMPTIONS AND REDUCTIONS

  • Private leasehold interests in property owned and financed by a governmental unit through industrial revenue bonds are taxed by the state at $0.015 per $100 of leasehold value with approval from KEDFA. The same KEDFA approval will exempt the leasehold value from local property taxes. Exemption from local property taxes only on the leasehold value (no state property taxes included), does not require KEDFA approval. Businesses leasing real estate or personal property from a tax-exempt owner, other than property financed by industrial revenue bonds, must pay full state and local property taxes on their leasehold value.
  • Cities may exempt the property of new manufacturing facilities from city property taxes for up to five (5) years as an inducement for the location of a plant in the city. This exemption cannot be granted by the state, by counties, by special districts, or by school districts.
  • Tangible personal property located in a federally designated and activated foreign trade zone (or sub-zone) are exempt from all local property taxes, provided that the zone is activated in accordance with the regulations of the United States Customs Service and the Foreign Trade Zones Board. The state rate is only 1/10 of 1 cent per $100 of assessed value.
  • City and county governments may grant a moratorium on increases in the assessed value of property taxes of older commercial structures for up to five (5) years following their rehabilitation, repair, restoration, or stabilization by owners or lessees. Structures must be at least twenty (25) years old to qualify.
  • The project becomes eligible for a second assessment moratorium after a three (3) year waiting period.
  • State law allows for favorable tax treatment for finished goods inventories. The state rate on finished goods inventory is only five (5) cents per $100 of assessed value. Cities, counties, and urban-county governments may exempt or levy rates on these business inventories that are less than the prevailing rate of taxation on other tangible personal property.
  • Personal property placed in a warehouse or distribution center for subsequent distribution to an out-of-state location within six months is exempt from state, city, county, and school district personal property taxe s. Finished goods at the end of the manufacturing process that are placed in a warehouse or distribution area for subsequent shipment out-of-state, may qualify for the in transit goods property tax rate.

STATE INCOME TAX EXEMPTIONS

  • Trucks weighing over 44,000 pounds are exempt from the motor vehicle usage tax and sales tax on repair and replacement parts. The sales tax exemption is limited to parts for trucks, including any towed unit, used exclusively in interstate commerce for the conveyance of property or passengers for hire.
  • Items purchased for resale.
  • Machinery for new and expanded industry.
  • Raw materials, industrial supplies, and industrial tools.
  • Energy and energy producing fuels, to the extent that they exceed three (3) percent of the cost of production.
  • Certified pollution control equipment.
  • Industrial machinery sold and delivered out-of-state to manufacturers or processors for use out-of-state.
  • Containers, packaging, and wrapping materials.
  • Motor fuels for highway use.
  • Industrial supplies and tools used to perform a manufacturing process on another entity's property.