INK provides Northern Kentucky Tri-ED with a streamlined and modernized business incentive program for new and existing businesses, which is extremely valuable in creating new jobs and capital investment in our region. The new and expanded incentives available through INK are for projects ranging from $25,000 to $100 million, allowing new and existing businesses of all sizes to benefit from these innovative programs.
Five new components of INK will benefit companies looking to expand or locate in Kentucky:
• The Kentucky Business Investment Program (KBI) integrates four long-standing programs: Kentucky Rural Economic Development Act, Kentucky Industrial Development Act, Kentucky Jobs Development Act and Kentucky Economic Opportunity Zone Act into a single, more flexible tax incentive program. KBI maintains the local input and participation that was a component of the prior programs, and provides income tax credits and wage assessments to new and existing companies in a number of key industries. Companies can benefit from KBI with a minimum investment of $100,000 and the creation of ten new full-time jobs, down from 15 in the previous KJDA program.
• The Kentucky Reinvestment Act (KRA) is a new program that provides a first in the commonwealth’s history. KRA provides an incentive for existing manufacturing firms to make capital investments, such as updating machinery and electronic data processing equipment without the requirement of creating new jobs. Companies must invest at least $2.5 million in order to recover up to 100 percent of the cost of skills training on the new equipment for employees and up to 50 percent of the cost of the equipment. Northern Kentucky is home to more than 500 manufacturing companies. Tri-ED will actively work with these companies to educate them about the benefits of KRA and the advantages it brings to existing industries in the region.
• The new Sales Tax Exemption for Data Processing/Telecommunication Equipment offers new and existing companies in Kentucky a sales tax exemption for the purchase of data processing equipment such as computers and telecommunication equipment for investments over $100 million. This new provision helps minimize the impact of the 6 percent Kentucky sales tax on initial capital outlay for such equipment.
• The Kentucky Enterprise Initiative Act (KEIA) has been expanded to include a sales tax rebate for the purchase of construction and building materials or research and development equipment. Terms have been enhanced from 18 months to a negotiated term not to exceed 7 years. The purchase of electronic processing equipment of more than $50,000 is also now eligible in conjunction with a minimum $500,000 project investment.
• The new Small Business Development Tax Credit Program provides a state corporate income tax credit of up to $25,000 and is available with the creation of one job for companies with fewer than 50 employees, if the applicant invests at least $5,000. The program will be available in 2012.
Kentucky has been a leader in offering tax credit and economic incentive, but the programs had not been updated since the 1990’s. Gov. Beshear recognized the importance of economic development and establishing a competitive tax credit program for the Commonwealth. Our tax credit approach remains a fixture in our offerings and, compared to other states, generally offers more in terms of total savings over a 10 -15 year period.
The new programs went into effect on June 26, 2009. If you have questions about whether or not your company qualifies for any of the new programs, or want to learn more about Northern Kentucky and Tri-ED’s efforts, please contact [email protected] or visit www.NorthernKentuckyUSA.com. More information on the new incentives programs is also available from the Kentucky Cabinet for Economic Development.
Dan Tobergte is President and CEO of Northern Kentucky Tri-County Economic Development Corporation (Northern Kentucky Tri-ED).
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