Applications Accepted Starting January 2011
New tax credit program encourages job creation and capital investment by Kentucky small businesses with 50 or fewer employees
Gov. Steve Beshear has announced the Kentucky Small Business Investment Credit (KSBIC) program, part of the Governor’s Incentives for a New Kentucky (INK) legislation, will start accepting applications in January 2011. The KSBIC program is designed to spur job creation by providing a nonrefundable state income tax credit to small businesses.
The program provides state income tax credits ranging from $3,500 to $25,000 per eligible small business that creates, fills and maintains one or more new, eligible jobs and invests at least $5,000 in qualifying equipment or technology. With certain exceptions, most for-profit small businesses with 50 or fewer employees are considered eligible for the program.
Businesses may apply one year after the latter of creating and maintaining at least one new eligible job and purchasing $5,000 or more in qualifying equipment or technology. Eligible hires and qualifying equipment and technology purchases dating back to Jan. 1, 2010, will meet program requirements. The KSBIC program is subject to a statutory limit of awarding $3 million in state tax credits per state fiscal year.
The start date for the KSBIC program was accelerated from January 2012 to January 2011, in HB 2 of the 2010 Special Session. Subject to funding availability, all eligible applications will be scored and ranked, with the highest ranked applications being submitted to the Kentucky Economic Development Finance Authority for review and approval.
In addition to meeting the required program criteria, other factors will increase an applicant’s score including: the amount of qualifying equipment or technology purchased from businesses physically located in Kentucky; the average base hourly wage for the eligible position(s); the number of eligible position(s) created and filled in enhanced counties; and having not been previously approved for a tax credit under this program.
Kentucky economic development officials worked with Rep. Tanya Pullin, the Department of Revenue, the Commission on Small Business Advocacy and the Kentucky Small Business Development Center to craft the program requirements. Additionally, small business organizations across the state, including the Kentucky Highlands Investment Corporation and Partners for Entrepreneurial Advancement in Kentucky provided input on the program.
“I would like to thank Governor Beshear, the Kentucky Legislature, the Kentucky Cabinet for Economic Development, the Commission on Small Business Advocacy and all of the organizations that supported the Kentucky Small Business Investment Credit program,” added Becky Naugle, state director of the Kentucky Small Business Development Center. “Their efforts acknowledge the importance of small businesses in Kentucky’s economy. Helping Kentucky small businesses grow and add jobs is a giant step in supporting the future of our Commonwealth.”
Additional information, including a program fact sheet, guidelines and application are available at www.thinkkentucky.com/KSBIC.