Incentives for a New Kentucky
I had the privilege several months ago to serve on a task force that reviewed Kentucky’s current incentive programs and made a series of recommendations regarding changes, enhancements, and new programs.
In late January, the Governor unveiled a bill that encompassed nearly all of our suggestions. While the bill received wide spread support during the Spring Session and passed by houses by wide margins, it died as a result of “timing issues.”
The Governor has again included this important legislation in the Special Session scheduled to begin 15 June. The bill, like its predecessor, is all encompassing; however, here are some of the highlights from a Northwest Kentucky Forward perspective:
- Consolidation of Existing Tax Credit Incentives (KIDA, KJDA, KREDA, KEOZ)
- All types of projects (manufacturing, service and technology, agribusiness, headquarters) in one program with flexible terms.
- 10-job Minimum
- $100,000 Minimum Investment
- Wage Rate 175% federal minimum (I think this should be lowered to 150%)
- Advance Disbursement for Mega Projects ($500M) (I think this should be lowered to $50 million)
- All projects eligible for both wage assessment and income tax credit.
- Amend Kentucky Reinvestment Act to assist existing business
- Upgrade facility (Not routine replacement)
- 85% Retention of Jobs
- $2.5 million Minimum Investment
- Company recovers up to 50% equipment cost and 100% training cost
- Income Tax Credit
(This is perhaps the most important aspect of this bill. Currently, we have very few tools to help maintain companies and employees in an ever-increasing competitive landscape.)
· Amend Kentucky Enterprise Initiative Act (KEIA)—electronic processing equipment becomes eligible for sales tax reimbursement.
· Sales Tax Reimbursement for Computers and Communication Systems–$100 Million minimum investment
· Small Business Income Tax Credit
· Film and Theater Production Tax Credits
· RR Access to Industrial Road Access Fund
