Business Incentives and Financial Programs

The Commonwealth of Kentucky offers a variety of business incentive and financial programs which are often utilized by a variety of different businesses to fill gaps in project financing. The principals of Commonwealth Economics have specialized knowledge, expertise, and proven processes to help our clients fully analyze business plans and their associated risks, while helping them take advantage of available incentive programs that allow project financing to become feasible. We have assisted clients in successfully obtaining over $1.3 billion in local and state tax incentive awards since 2007.

Commonwealth Economics is available to work with your company and guide it through the application process. For more information, please contact us and a trusted Partner will assist your company in evaluating your project and its ability to utilize various Kentucky Business Incentive programs (see below).

Kentucky Business Investment (KBI) Program

Provides income tax credits and wage assessments to new and existing agribusinesses, regional and national headquarters, manufacturing companies, and non-retail service or technology related companies that locate or expand operations in Kentucky. Projects locating in certain counties may qualify for enhanced incentives. To learn more, contact us.

Kentucky Enterprise Initiative Act (KEIA)

For new or expanded service or technology, manufacturing, or tourism attraction projects in Kentucky. KEIA provides a refund of Kentucky sales and use tax paid by approved companies for building and construction materials permanently incorporated as an improvement to real property. It is also available for Kentucky sales and use tax refunds for eligible equipment used for research and development and data processing equipment. To learn more, contact us.

Kentucky Direct Loan Program

Kentucky encourages economic development business expansion and job creation by providing business loans to supplement other financing. The Direct Loan Program provides loans at below-market interest rates (subject to the availability of state revolving loan funds) for fixed asset financing for agribusiness, tourism, industrial ventures, or the service industry. Retail projects are not eligible. To learn more, contact us.

Industrial Revenue Bonds (IRBs) & Community Development Block Grants Loans (CDBG)

IRBs issued by state and local governments in Kentucky can be used to finance manufacturing projects and their warehousing areas, major transportation and communication facilities, most health care facilities, and mineral extraction and processing projects. contact us. for IRB Procedures.

CDBG’s are federally funded low interest loans made available through the Department for Local Government. To learn more, contact us.

Kentucky Reinvestment Act (KRA)

Provides tax credits to an existing Kentucky company engaged in manufacturing and related functions on a permanent basis for a reasonable period of time that will be investing in eligible equipment and related costs of at least $2,500,000. To learn more, contact us.

Incentives for Energy Independence Act (IEIA)

Requires a capital investment of at least $25 million for an alternative fuel facility using biomass, or an investment of at least $100 million for an alternative fuel facility using coal, as its primary feedstock. A capital investment of at least $1 million is required for a renewable power facility that meets minimum electric output standards based upon the power source. The negotiated incentives cannot exceed 50 percent of the capital expenditures and may include a reimbursement of sales and use taxes paid on tangible personal property; a tax credit of the income tax and limited liability entity tax owed by the company; and, wage assessment incentives up to 4 percent of gross wages of each employee whose job was created as part of the project. Advanced disbursements may also be available. To learn more, contact us.

Kentucky Environmental Stewardship Act (KESA)

For companies manufacturing products that have a substantial positive impact on human health and the environment. Companies with projects approved under KESA must have at least $5 million in eligible cost and can potentially recover up to 25 percent of the projects fixed asset cost and 100 percent of employee skills training. The tax incentive is available for recovery over a 10-year period. To learn more, contact us. 

Tourism Development Act

The Tourism Development Act provides developers of approved new or expanding tourism projects the ability to recover up to 25 percent of the project’s development costs over a 10-year term. Projects including, but not limited to, lodging facilities constructed on state park, federal park or national forest lands are eligible to recover up to 50 percent of the development costs over a 20-year term. To learn more, contact us.

Kentucky Investment Fund Act (KIFA)

KIFA provides tax credits to individuals and companies that invest in approved venture capital funds. Investors in KIFA approved funds are entitled to a 40 percent credit against Kentucky individual or corporate income tax or Kentucky corporate license tax. KEDFA (see above) approves investment funds and fund managers. To learn more, contact us.

EB-5 Capital Program

EB-5 capital is a unique alternative to traditional sources of funds. The EB-5 program was established in 1990 to encourage foreigners to invest in the United States and create American jobs in exchange for a U.S. green card. As credit markets have tightened in the wake of the financial crisis, more and more American businesses and developers have turned toward EB-5 funds to raise the required capital for their projects. To learn more, contact us.