Bill encourages more small business investment, job creation
LEXINGTON, Ky. (June 23, 2014) – Governor Steve Beshear joined community and small business leaders today to ceremonially sign new legislation that makes it easier for small businesses to receive tax credits, encouraging further growth and expansion. The signing took place at Community Ventures Corporation, a small business incubator in Lexington.
House Bill 301, sponsored by Reps. Ruth Ann Palumbo, of Lexington, Tanya Pullin, of South Shore, and Brent Yonts, of Greenville, will make it much easier for any eligible small business in Kentucky 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,” said Gov. Beshear. “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 bill clarifies that the minimum average hourly wage will include bonuses and commissions and that the Cabinet will go by the employee’s W2 in determining wage.
The new law also simplifies the application and compliance processes to allow 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.
“We should be doing everything we can to help Kentuckians who work hard every day to keep their small businesses,” said Rep. Palumbo. “I’m very pleased that Gov. Beshear is signing this legislation into law and hope it goes a long way to provide incentives for Kentuckians who are following their dreams and running businesses of their own.”
“Small businesses are key to our economy,” said Rep. Pullin. “More than half of all working Kentuckians work for small businesses. I was pleased to work with Gov. Beshear and the Cabinet for Economic Development on House Bill 301 to make it even easier for small businesses to access this tax credit. Gov. Beshear and Economic Development should be commended for their support for small business.”
“Small businesses are the backbone of every community across Kentucky,” said Rep. Yonts. “These are the folks who keep our Commonwealth going, and I’m happy to see that we’re offering them a shot in the arm. I hope this will go a long way in helping them grow their businesses.”
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.com 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. Learn more about the program here.