Sales Tax Exemption for Manufacturing Facilities (Kentucky)

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Last modified on February 12, 2015.

Financial Incentive Program

Place Kentucky

Name Sales Tax Exemption for Manufacturing Facilities
Incentive Type Sales Tax Incentive
Applicable Sector Industrial
Eligible Technologies Wind, Energy Efficient Manufacturing Machinery and Equipment
Active Incentive Yes

Implementing Sector State/Territory
Energy Category Energy Efficiency Incentive Programs, Renewable Energy Incentive Programs
Amount 100% sales and use tax refund

Equipment Requirements Must reduce energy consumption by 15%
Start Date 2008-07-01

Maximum Incentive 50% of capital investment in the eligible project

Program Administrator Office of Energy Policy
Date added to DSIRE 2007-10-10
Last DSIRE Review 2012-12-06

References DSIRE[1]


In August 2007 Kentucky established the Incentives for Energy Independence Act to promote the development of renewable energy and alternative fuel facilities, energy efficient buildings, alternative fuel vehicles, research and development activities and other energy initiatives. This includes a sales tax exemption which allows manufacturers to apply for a refund for the amount of sales or use tax paid on the purchase of new or replacement equipment for renewable energy or energy efficiency projects.

Energy Efficiency projects must decrease the measurable amount of energy used by the facility by at least 15% percent while maintaining or increasing the production for the same period.

The types of equipment that are allowable under this policy are not specified, but the program explicitly excludes improvements to buildings (w.g. windows, lighting) and replacement parts. Project should reduce consumption of energy or energy-producing fuels in the manufacturing process. The manufacturer must file an application for pre-approval with the Department of Revenue (Application 51A300) prior to purchasing new or replacement equipment, and should initiate the process with the Kentucky Cabinet for Economic Development. This incentive applies to equipment purchased on or after July 1, 2008.

Incentive Contact

Contact Name Don Goodin
Department Kentucky Cabinet for Economic Development
Division Department of Financial Incentives
Address Old Capitol Annex
Address 2 300 West Broadway
Place Frankfort, Kentucky
Zip/Postal Code 40601
Phone (502) 564-4554 Ext:3413

Contact Name Ricky Haven
Department Kentucky Department of Revenue
Division Sales and Use Tax Office of Sales and Excise Taxes
Address 501 High Street

Place Frankfort, Kentucky
Zip/Postal Code 40620
Phone (502) 564-6828


Authorities (Please contact the if there are any file problems.)

Authority 1: KRS § 139.518
Date Effective 2008-07-01

Authority 2: 103 KAR 31:200

  • Incentive and policy data are reviewed and approved by the N.C. Solar Center's DSIRE project staff.[1]


  1. 1.0 1.1  "Database of State Incentives for Renewables and Efficiency (DSIRE)"