FINANCIAL
INCENTIVES
Benefits are available for all types of companies - new, existing
and relocating; regional and national headquarters; back-oce;
distribution and supply chain; manufacturing; and research and
development. Both Indiana and Kentucky have generous business
incentives and financial programs.
Beyond the available state incentives, each local governmental entity
with taxing authority also has the ability to oer tax abatement
incentives for new and expansion of existing businesses. The
individual project’s new job creation and value of new real property
and equipment are important factors.
KENTUCKY
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.
Kentucky Enterprise Initiative Act (KEIA)
For new or expanded service or technology,
manufacturing, or tourism attraction project in Kentucky.
INDIANA
Economic Development for a Growing Economy
(EDGE) Tax Credit
Provides incentive to businesses to support jobs creation,
capital investment and to improve the standard of living
for Indiana residents.
Hoosier Business Investment Tax Credit (HBITC)
Provides incentive to businesses to support jobs creation,
capital investment and to improve the standard of living
for Indiana residents
Skills Enhancement Fund (SEF)
Provides assistance to businesses to support training
and upgrading skills of employees required to
support new capital investment.
FINANCIAL INCENTIVES
KENTUCKY AND INDIANA
OFFER STATE TAX INCENTIVES
Incentives for both Kentucky and Indiana counties are executed at the state level. The local community in which the business will locate will
engage the state representatives and facilitate the execution of the incentives. GLI will make the initial introductions and help to get the
process started.
Companies must be:
Creating at least 10 new jobs
Investing at least $100,000 in the project
There are several tax incentive programs for various industries on both sides of the river. Business and service industries usually consider
the main incentive programs. There are other incentives for companies related to workforce and skills training that a company may
consider once they have moved here. The following serves as an initial resource:
FINANCIAL INCENTIVES
NEW AND EXPANDING INDUSTRY
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.
Kentucky Enterprise Initiative Act (KEIA)
For new or expanded service or technology,
manufacturing, or tourism attraction project in Kentucky.
Direct Loan Program (KEDFA)
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.
Industrial Revenue Bonds - IRB
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.
Community Development Block Grants Loans - CDBG
Federally funded low interest loans made available
through the Department for Local Government.
JOB RETENTION
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.
Kentucky Industrial Revitalization Act (KIRA)
Investments in the rehabilitation of manufacturing or coal
mining and processing operations that are in imminent
danger of permanently closing or that have closed
temporarily may qualify for tax credits.
HIGH-TECH
SBIR-STTR Matching Funds Program
The Cabinet will match, on a competitive basis, Phase 1
and Phase 2 federal Small Business Innovation Research
(SBIR) and Small Business Technology Transfer (STTR)
awards received by Kentucky high-tech small businesses
and those willing to become Kentucky-based businesses.
Commonwealth Seed Capital LLC
An independent, non-profit fund that makes debt or
equity investments in early-stage Kentucky business
entities to facilitate the commercialization of innovative
ideas and technologies.
Kentucky Enterprise Fund and Rural Innovation
Fund
Provide seed-stage capital to Kentucky-based companies
that are commercializing a technology-based product or
process.
ENERGY AND ENVIRONMENT
Kentucky New Energy Ventures Fund
Provides seed stage capital to support the development
and commercialization of alternative fuel and renewable
energy products, processes, and services in Kentucky.
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.
Kentucky Environmental Stewardship Act (KESA)
For companies manufacturing products that have a
substantial positive impact on human health and the
environment.
FINANCIAL INCENTIVES
KENTUCKY
SMALL BUSINESS
Kentucky Small Business Credit Initiative (KSBCI)
Designed to generate jobs and increase the availability of
credit by reducing the risks participating lenders assume
when making loans to small businesses.
Small Business Loan Program
Designed to help small businesses acquire funding
needed to start or grow their small business. A
small business must be engaged in manufacturing,
agribusiness, or service and technology.
The Kentucky Small Business Tax Credit (KSBTC)
Designed to encourage small business growth and job
creation by providing a nonrefundable tax credit to
eligible businesses hiring one or more eligible individuals
and investing at least $5,000 in qualifying equipment or
technology.
U.S. Small Business Administration
Federal agency that provides a number of guaranteed
loan and other financial assistance programs to small
businesses.
Angel Investment Tax Credit
Oers tax credits of up to 50 percent of an investment in
Kentucky small businesses. Prior to investment, both the
investor and small business must submit applications for
certification.
WORKFORCE TRAINING
Bluegrass State Skills Corporation Skills Training
Investment Credit
Provides credit against Kentucky income tax to existing
businesses that sponsor occupational or skills upgrade
training programs for the benefit of their employees.
Bluegrass State Skills Corporation Grant Reim-
bursement Program
Provides matching grant funds for customized business
and industry-specific training programs.
TAX INCREMENT FINANCING (TIF)
Tax Increment Financing (TIF)
The state participates with local governments and eli-
gible agencies in three TIF programs: Real Property Ad
Valorem Tax Revenues, Signature Projects, and Mixed-Use
Redevelopment in Blighted Urban Areas.
AGRI-BUSINESS OPPORTUNITIES
Kentucky Agricultural Development Fund
Provides incentives for innovative proposals that increase
net farm income, stimulates markets for Kentucky
agricultural products, creates new ways to add value
to Kentucky agricultural products, and explores new
opportunities for Kentucky farmers.
Kentucky Agricultural Finance Corporation
Provides capital access for agricultural diversification and
infrastructure projects.
OTHER BUSINESS INCENTIVES AND FINANCIAL PROGRAMS
Kentucky Investment Fund Act - KIFA
EB-5 Immigrant Investor
EB-5 is an opportunity for immigrants to invest in the
United States in exchange for green card eligibility for
themselves and qualifying family members.
TOURISM DEVELOPMENT
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.
Kentucky Film Incentive
Provides qualifying applicants the ability to recover up to
20 percent of qualified expenditures through a refundable
income tax credit. Qualifying applicants must invest a
minimum of $50,000 for documentaries and national
touring Broadway shows, $200,000 for commercials,
$500,000 for full-length films.
FINANCIAL INCENTIVES
KENTUCKY
Economic Development for a Growing Economy
(EDGE) Tax Credit
Provides incentive to businesses to support jobs creation,
capital investment and to improve the standard of living
for Indiana residents.
Hoosier Business Investment Tax Credit (HBITC)
Provides incentive to businesses to support jobs creation,
capital investment and to improve the standard of living
for Indiana residents
Skills Enhancement Fund (SEF)
Provides assistance to businesses to support training and
upgrading skills of employees required to support new
capital investment.
Industrial Development Grant Fund (IDGF)
Provides assistance to municipalities and other eligible
entities as defined under I.C. 5-28-25-1 for eligible public
infrastructure costs.
Headquarters Relocation Tax Credit
Provides a tax credit to corporations that relocate their
headquarters to Indiana. The credit is assessed against
the corporation’s state tax liability.
Industrial Recovery Tax Credit
Also known as DINO for older buildings it benefits,
provides an incentive for companies to invest in former
industrial facilities requiring significant rehabilitation or
remodeling expenses.
Venture Capital Investment Tax Credit
Improves access to capital for fast growing Indiana
companies by providing individual and corporate
investors an additional incentive to invest in early stage
firms.
R & D Tax Credit
Provides an incentive for business investment in Indiana
by providing a credit against state tax liability for
qualified company research expenses. The R&D tax credit
(also known as the Research Expense tax credit) is based
on the increase in Indiana R&D over the prior three-year
base.
Patent Income Exemption
Certain income derived from qualified patents (utility
patents and plant patents) and earned by a taxpayer are
exempt from taxation.
Community Revitalization Enhancement District
Tax Credit
Entitles a taxpayer to a credit against the taxpayer’s state
and local tax liability for qualified investments made
within a CReED designated under Ind. Code 36-7-13.
Capital Access Program
The Program provides businesses with access to capital
by encouraging lenders who participate in the program to
make loans they may not otherwise make.
INDIANA
FINANCIAL INCENTIVES
