What incentives are available to business and industry in
Springfield and Washington County?
- Bluegrass State Skills
Corporation (BSSC) - BSSC offers a Grant and a Tax
Credit Program. To learn more about these programs, visit
the
Kentucky Cabinet for Economic Development.
- Kentucky Jobs Development Act (KJDA)
- KJDA provides tax incentives to new or expanding
service and technology-based companies that earn at least
75% of their revenues from outside the state, employ at
least 15 new full-time Kentucky residents and meet certain
salary requirements. This tax credit program enables the
company to recoup 50% of annual occupancy costs (or
fair-market-value equivalent if owned) of the facility for
up to 10 years and 50% of eligible start-up cost
expenditures up to $20,000 per job created (maximum start-up
credits of $10,000 per job).
Benefits include:
• A 100% credit against the state corporate income tax
arising from the project.
• The retention up to 5% of the gross wages of the new
employment generated by the project as a credit against
state and local occupational taxes.
- Kentucky Enterprise Initiative
Act (KEIA) - Approved companies are eligible to
receive a refund of sales and use tax paid on construction
materials and building fixtures.
- Lincoln Trail Career Center
- Local employment office that provides
application, hiring, recruitment, and skills training
services to local employers, and offers detailed labor
market information. For more information, visit the
Lincoln Trail Career Center Web site.
- Property Tax Abatement
- Local property tax abatement for qualified projects for
five (5) years.
- Incumbent Worker Training (IWT)
Program - IWT offers a 50% reimbursement for skills
upgrade training of current employees for eligible business
and industry.
- Kentucky Workforce Investment
Network System (KY WINS) - Provides funding
assistance (75% of project costs) for advanced courses that
are part of a complete training package or lead to
certification.
The
process for applying for these benefits is a simple,
straightforward process, and SWEDA's economic development
staff will assist you in every step.
What are Industrial Revenue
Bonds?
Industrial Revenue Bonds (IRBs) are financing instruments
issued by designated local industrial development boards (IDBs)
or other issuers authorized by state law. Since 1949, IRBs have
been a preferred method of financing used by industries locating
to and expanding in Kentucky. Often, financial institutions and
other intermediaries participate by providing letters of credit
backing the bonds. Thus, the company seeking the bonds must be
considered creditworthy by the financial institution.
IRBs provide financing for land, building and equipment for
new and expanding manufacturing plants. Certain expenses such
as architectural, engineering, legal and administrative fees
associated with the sale of the bonds can be paid from the bond
proceeds (subject to the limitations of Internal Revenue Service
regulations).
The political subdivision issuing the IRB retains ownership
of the bond-financed facility and leases it back to the company
at a rate sufficient to pay the principal and interest on the
bonds as they mature. When the user leases the property back,
there may be several tax advantages such as exemption from sales
tax on construction materials, use tax on the purchase of
equipment, as well as mortgage deed tax and ad valorem tax for
the term limited to ten years. Local sales and use taxes and
all ad valorem taxes which are levied for school purposes are
not eligible for exemption.
Taxable IRBs will continue as one of the mainstays of industrial
finance because they may be issued with fewer restrictions and
in unlimited amounts while the user maintains tax savings. The
company may buy its own bonds and still be eligible for
significant tax savings. Interest rates are generally higher
than on tax-exempt bonds.
