Incentive Programs

Local Tax Incentives

• Louisville/Jefferson County Enterprise Zone offers special state and local tax incentives and regulatory relief to certified new and expanding businesses located within the 90-square-mile zone. (see map)
• A five-year Tax Assessment Moratorium on property assessment or reassessment is available on improvements to existing residential and commercial structures which are at least 25 years old.
• Rehabilitation Tax Credit provides a 20% income tax credit on the cost of certified substantial rehabilitation of certified historic structures for industrial, commercial or rental residential purposes. Also provides a 10% credit for substantial rehabilitation of non-historic structures built prior to 1936 if the post-rehabilitation use is nonresidential.

Local Financial Services

The Louisville/Jefferson County Office for Business Services offers a variety of financial programs to encourage business expansion and investment.

• Metropolitan Business Development Corporation (METCO) offers "gap" financing programs, providing a potential source of funds that may be used in conjunction with traditional private sector financing services. This entity lends at market interest rates, though those rates are generally fixed for the term of the loan. Funds may be borrowed for any legitimate business purpose.
  
• Neighborhood Commercial Development Loan Program provides long term, low interest financing to property owners for facade improvements. The loans are at five percent (5%) interest and for a term of ten(10) years. Architectural and design services are also provided. The program seeks to promote retail growth while improving the aesthetics of the commercial corridor.

State Financing Programs

• Kentucky Economic Development Finance Authority (KEDFA) Direct Loan Program provides low-interest state loans for non-retail industrial, service industry, agribuisness, and tourism projects. KEDFA can lend up to 25% of project costs for land, buildings, and equipment. Loans are limited to $500,000 at fixed interest rates and are determined by the number of jobs created.
  
• Commonwealth Small Business Development Corp. (CSBDC) provides loans for land, buildings, and equipment used in projects that qualify for financial assistance from the US Small Business Administration. The maximum loan is 40% of project costs or $750,000. The maximum loan term is 20 years for land and buildings and 10 years for equipment.

State Tax Credits

• Kentucky Jobs Development Act was created to assist new or expanding service or technology-based companies that earn at least 75% of their revenues from outside the state, employ at least 25 Kentucky residents and meet certain salary requirements. Benefits include a 100% waiver of state corporate income tax liability and the retention of 5% of total payroll withheld from employees' paychecks for state income and local occupational taxes. These benefits enable a company to recoup 50% of eligible relocation start-up costs and 50% of annual occupancy costs of the facility for ten years.
  
• Kentucky Tourism Tax Act was established to create more tourism destination attractions in Kentucky and to generate more out-of-state tourism dollars. Qualified projects would be eligible for a sales tax credit against sales tax generated by visitors to the attraction. The attraction may recover up to 25% of the initial investment through this credit over a ten-year period.

State Incentives

• Tax Increment Financing is a method by which local government may generate up to 100% of the incremental revenues from property taxes and occupational license fees in designated areas to finance economic development projects. This only includes the amount in excess of the revenue collected in the area prior to its designation.