Alternative Fuel Production Facility Incentives (Kentucky)
Last modified on February 12, 2015.
|Name||Alternative Fuel Production Facility Incentives (Kentucky)|
|Policy Category||Financial Incentive|
|Policy Type||Corporate Tax Incentive|
|Affected Technologies||Biomass/Biogas, Coal with CCS, Natural Gas|
The Kentucky Economic Development and Finance Authority (KEDFA) provides tax incentives to construct, retrofit, or upgrade an alternative fuel production or gasification facility that uses coal or biomass as a feedstock. Beginning Aug. 1, 2010, tax incentives are also available for energy-efficient alternative fuel production facilities and up to five alternative fuel production facilities that use natural gas or natural gas liquids as a feedstock. Energy-efficient alternative fuels are defined as homogeneous fuels that are produced from processes designed to densify feedstocks such as coal, waste coal, or biomass resources, and have an energy content that is greater than the feedstock. The incentives may consist of: 1) a refund of up to 100 percent of the state sales tax paid on the purchase of personal property used to construct the facility; 2) a credit of up to 100 percent of an approved company's state income tax and limited liability entity tax that is generated by the project; 3) up to 4 percent of the wage assessment of employees whose jobs were created as a result of the construction, retrofit, upgrade or operation of a qualified facility; and 4) a credit for up to 80 percent of the severance tax paid for coal, natural gas, or natural gas liquids used as a feedstock.
The incentives expire at the time of receipt of the authorized incentives or 25 years from activation of the project, whichever occurs first. Approved companies may recover up to 50 percent of their capital investment through the authorized tax incentives. The minimum capital investment for incentive eligibility is $25 million for an alternative fuel or gasification facility that uses biomass as the primary feedstock; $100 million for an alternative fuel or gasification facility that uses coal, natural gas, or natural gas liquids as the primary feedstock; and $25 million for an energy-efficient alternative fuel facility.