Wednesday, July 1, 2009

New tax credits available to qualifying companies

One of the major initiatives passed in the special session of the Kentucky General Assembly last week was a rewrite of the state's business incentives. The bill was sponsored by Owensboro Representative Tommy Thompson. A summary of the major changes introduced by the bill is below.

Manufacturers:

  • Assistance for existing manufacturers who need to make significant capital investments in Kentucky facilities in order to remain competitive, preventing loss of jobs to competitor states
  • $2.5 million minimum new investment
  • Existing manufacturers may recover up to 50% of the cost for new equipment and 100% of training costs through income tax credits

Technology-based Firms:

  • Provide a sales and use tax refund for companies that are heavy users of computer and telecommunications equipment
  • Must invest at least $100 million in computer or telecommunications equipment for installation and use in Kentucky
  • Systems must be an integral part of the product or service that is the primary business of the new or expanding firm
  • Expand the Kentucky Enterprise Initiative Act (KEIA) to allow companies to receive sales tax refunds for the purchase of electronic processing systems costing at least $50,000
  • Can be combined with sales tax credits for construction costs to provide a significant savings for projects investing $500,000

Small Businesses (50 or less employees):

  • Small business must create one new job and retain that job for one year
  • Must also invest at least $5,000 in qualifying equipment
    The maximum amount of credit for each small business for each year shall not exceed $25,000

Other incentives may be available depending on company circumstances or need. For more information or to schedule an appointment regarding these changes, please contact the Greater Owensboro Economic Development Corporation at 270-926-4339 or email Sharla Austin-Darnell, Existing Industry Manager at sdarnell at owensboro dot com