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Gov. Steve Beshear 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.
“I am delighted that Kentucky’s small businesses will soon be able to benefit from the Kentucky Small Business Investment Credit program, established through my INK legislation,” said Gov. Beshear. “Small businesses are vital to our state’s overall economic health and prosperity and this new tax credit program will allow us to provide a new resource that will encourage new jobs and investment.”
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.
“More than half of all Kentuckians work for small businesses,” said Rep. Tanya Pullin of Greenup County. “This legislation will encourage small businesses to create jobs all over Kentucky. By creating jobs, small businesses have led the way out of past recessions and I believe it will be small businesses who will lead us out of this recession. I was pleased to sponsor this legislation.”
Kentucky economic development officials worked with Rep. 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.
“The Commission on Small Business Advocacy was very pleased to support the development of the Kentucky Small Business Investment Credit program,” said Cathy Zion, chair of the Commission on Small Business Advocacy. “We worked closely with the Cabinet for Economic Development to review proposed program regulations and were grateful for the opportunity to provide comments. This program is a significant step toward helping job-generating small businesses as they continue to power our economy.”
Additional information, including a program fact sheet, guidelines and application are available at www.thinkkentucky.com/KSBIC.
The Cabinet for Economic Development routinely works with small business organizations from across the state to provide resources, advocacy and assistance to entrepreneurs and small businesses. For more information about the Cabinet’s other small business programs, visit www.ThinkKentucky.com/SBSD