The economy across the US is experiencing dynamic growth. With business investment increasing, states are in hot pursuit of impactful businesses. Kentucky is surrounded by highly competitive states with attractive business environments. What is the Bluegrass State doing to tip the scales in its favor?
Kentucky provides tax and financial incentives to help municipal governments bridge any gaps with competing out of state locations. The Kentucky Cabinet for Economic Development (KEDFA) oversees the administration of several state level incentives, many of which can bring tremendous value to companies considering relocating to or expanding existing facilities in Kentucky.
Learn how KEDFA uses three programs to support growth in Kentucky:
- Kentucky Business Investment Program (KBI) – This wage assessment incentive can be claimed for each new full-time Kentucky resident job created as a result of the project. The KBI provides a credit for up to five percent of gross wages for each net new employee in enhanced incentive counties or up to four percent of gross wages for each employee in other counties.
- Kentucky Enterprise Initiative Act (KEIA) – A KEIA approved company is eligible to receive a refund of sales and use tax that is paid for certain materials purchased during the term of a project and not to exceed the approved recovery amount authorized in a memorandum of agreement. Qualifying materials can include building and construction materials, research and development equipment, and electronic processing equipment.
- Kentucky Reinvestment Act (KRA) – The KRA provides a tax incentive to existing Kentucky manufacturers that plan to invest at least $2,500,000 in new equipment or new construction, rehabilitation or improvements to a facility in order to house new equipment.
While Kentucky’s incentives can be extremely valuable (see the examples in our email), obtaining an offer from KEDFA while evaluation location alternatives can be a challenge for many businesses. From identifying opportunity to managing interactions with local economic development liaisons to meeting compliance requirements, the managing incentive opportunities can be challenging. Having an experienced site selection and economic incentive advisor is a great first step. At McGuire Sponsel, we believe that rapidly growing companies, especially multi-state companies, need to have a strategic location and incentive plan. Our planning services focus on multi-state incentive program education, collaborative planning and ongoing opportunity assessment. If your company is investing and adding jobs, incentives in Kentucky could bring you hundreds of thousands of dollars or even more in benefit. To schedule your incentive planning session, call McGuire Sponsel at 317-564-5000 or email firstname.lastname@example.org.