Kentucky Business Investment (KBI) Program

Kentucky Business Investment (KBI) Program

Funds companies establishing operations in Kentucky with tax credits and wage assessments tied to eligible projects.

The Kentucky Business Investment (KBI) Program, authorized under KRS 154.32, provides two parallel incentives — income-tax credits and wage assessments — to companies that establish or expand operations in Kentucky across eligible sectors. Administered by the Kentucky Economic Development Finance Authority (KEDFA), KBI is available to new and existing businesses in agribusiness, manufacturing, non-retail service or technology, headquarters operations, alternative fuel, gasification, renewable energy, coal severing and processing, hospital operations, and CO2 transmission pipelines. The incentives are not available to retail businesses.

KBI offers up to 100% of corporate income tax liability and up to 4.5% of taxable wages for an incentive period of up to 15 years, depending on project location and investment scale. Projects located in enhanced incentive counties or involving total investment exceeding $200 million may apply for enhanced KBI incentives on top of standard terms. An administrative fee equal to 0.50% of the authorized KBI amount — capped at $50,000 — is due before final approval. Credits are claimed on Kentucky Department of Revenue Form 41A720-S53 KBI (PKG) as part of the annual corporate income tax return.

KEDFA approves KBI applications at its monthly last-Thursday board meetings. Applicants begin through the Kentucky Cabinet for Economic Development's Business Development division. Because the incentive is tied to actual job creation and wage levels, the final credit value is determined after operations commence and payroll is verified. For companies weighing multi-state site selection, KBI's 15-year incentive period and potential for 100% income-tax offset make Kentucky a competitively structured location for capital-intensive or employment-generating projects.