Makes it easier for small businesses to get tax credits
LEXINGTON, Ky. (June 23, 2014) — Gov. Steve Beshear signed legislation that makes it easier for small businesses to receive tax credits, encouraging further growth and expansion.
House Bill 301, sponsored by Reps. Ruth Ann Palumbo (Lexington), Tanya Pullin (South Shore) and Brent Yonts (Greenville) will make it much easier for any eligible small businesses to apply and qualify for the Kentucky Small Business Tax Credit, a non-refundable state income tax credit ranging between $3,500 – $25,000.
“Entrepreneurship is at an all-time high in Kentucky, and we need to support these companies every step of the way,” Beshear said. “This new law will provide a much-needed financial boost to small businesses as they grow their ideas and create more jobs.”
To receive the credit, small businesses must create and fill one or more eligible jobs for one year and invest $5,000 or more in qualifying equipment or technology. The minimum average hourly wage will include bonuses and commissions and will go by the employee’s W2 in determining wage.
The new law also simplifies the application and compliance processes to allow small businesses to take advantage of the credits. The equipment purchase and the new hire must occur within six months of each other, but the application can be made anytime within 24 months of the first of those two events.
The Kentucky Small Business Tax Credit program has helped encourage dozens of businesses to invest nearly $1.3 million over the past three years. Most for-profit businesses with 50 or fewer full-time employees are considered eligible small businesses for the program.
Kentucky has made great strides to support small businesses. Recently, the Kauffman Foundation and Thumbtack gave the commonwealth an “A” rating for small business friendliness, making Kentucky the most improved state in the rankings.
The tax credit is operated through the Office of Entrepreneurship within the Kentucky Cabinet for Economic Development.