Taxes & Incentives

Contact us to learn more about local occupational tax rebates, property tax abatement, and other incentives that can assist you in starting or expanding your business.

There are a number of incentive programs available, at the federal, state and local levels.  We are committed to helping you determine and apply for the best incentive package that fits your specific needs.

Local Incentives

Springfield-Washington County is committed to providing a business climate that promotes sustainable success.

We offer an occupational tax rebate incentive to any expanding or new business that meets the requirements of the Kentucky Business Investment (KBI) Program.  Eligible companies can apply to receive a 50% rebate on whatever was paid in occupational taxes during each year the incentive is awarded.  This applies to both the city of Springfield and Washington County, the city rate is 1.00% and the County rate is 0.75%.  The length of this rebate program is based upon the size of the project.

Also, the city of Springfield offers a property tax abatement for eligible projects, the city real estate property tax rate is $0.14 per $100 valuation.

Kentucky Incentives

Kentucky offers a number of different incentives for every type of project, including:

  • New and Expanding Industry
  • Job Retention
  • High-Tech
  • Energy and Environment
  • Small Business
  • Workforce Training
  • Tax Increment Financing (TIF)
  • Agri-business Opportunities
  • Tourism Development

To find out more about Kentucky incentives feel free to contact us or visit http://www.thinkkentucky.com/KYEDC/kybizince.aspx?param=0

For other inquiries please contact us at 859-336-0052 or via email at daniel@sweda.org

What incentives are available to business and industry in Springfield and Washington County?

Q: Are there any local incentives available to new and existing business? 
A: Yes, Springfield and Washington County offer various local incentives to new and expanding businesses.  Occupational tax incentives are available to those businesses that meet the requirements of the Kentucky Business Investment program.  Workforce development assistance is also available, along with property tax abatements from the city of Springfield.

Q: What other incentives are available to business and industry in Springfield and Washington County?

  • Bluegrass State Skills Corporation (BSSC) – BSSC offers a Grant and a Tax Credit Program. To learn more about these programs, visit the Kentucky Cabinet for Economic Development.
  • Kentucky Jobs Development Act (KJDA) – KJDA provides tax incentives to new or expanding service and technology-based companies that earn at least 75% of their revenues from outside the state, employ at least 15 new full-time Kentucky residents and meet certain salary requirements. This tax credit program enables the company to recoup 50% of annual occupancy costs (or fair-market-value equivalent if owned) of the facility for up to 10 years and 50% of eligible start-up cost expenditures up to $20,000 per job created (maximum start-up credits of $10,000 per job).
    Benefits include:
    • A 100% credit against the state corporate income tax arising from the project.
    • The retention up to 5% of the gross wages of the new employment generated by the project as a credit against state and local occupational taxes.
  • Kentucky Enterprise Initiative Act (KEIA) – Approved companies are eligible to receive a refund of sales and use tax paid on construction materials and building fixtures.
  • Lincoln Trail Career Center – Local employment office that provides application, hiring, recruitment, and skills training services to local employers, and offers detailed labor market information. For more information, visit the Lincoln Trail Career Center Web site.
  • Incumbent Worker Training (IWT) Program – IWT offers a 50% reimbursement for skills upgrade training of current employees for eligible business and industry.
  • Kentucky Workforce Investment Network System (KY WINS) – Provides funding assistance (75% of project costs) for advanced courses that are part of a complete training package or lead to certification.

The process for applying for these benefits is a simple, straightforward process, and SWEDA’s economic development staff will assist you in every step.

Q: Are there current workforce development programs taking place in Washington County?
A: Yes, Washington County is home to the Springfield campus of the Elizabethtown Community and Technical College (ECTC).  ECTC provides support to local employers through training of existing and future employees.  Washington County schools are also engaged in career pathway programs that support growing industry needs in the area.

Springfield-Washington County Economic Development Authority (SWEDA) is also engaged in various regional organizations that promote and support workforce development, including the Lincoln Trail Area Development District, and the NELCO training consortium.

State & Local Taxes

A state sales tax is levied at the rate of 6% on the purchase or lease price of taxable goods and on utility services. Local sales taxes are not levied in Kentucky.

The Kentucky Constitution requires the state to tax all classes of taxable property, and state statutes allow local jurisdictions to tax only a few classes. All locally taxed property is subject to county taxes and school district taxes (either a county school district or an independent school district). Property located inside city limits may also be subject to city property taxes. Property assessments in Kentucky are at 100% fair cash value. Special local taxing jurisdictions (fire protection districts, watershed districts and sanitation districts) levy taxes within their operating areas (usually a small portion of the community or county).

Click here for general fact sheets on federal, state and local business and personal taxes.

State Property Tax Rates Per $100 Valuation, 2014

Selected Class of Property State Rate  Local Taxation
Permitted
Real Estate $0.1220 Yes
Manufacturing Machinery $0.1500 No
Pollution Control Equipment $0.1500 No
Inventories:
    Raw Materials $0.0500 No
    Goods in Process $0.0500 No
    Finished Goods $0.0500 Yes
    Goods-In-Transit Exempt Limited
Motor Vehicles $0.4500 Yes
Other Tangible Personal Property $0.4500 Yes

Source: Kentucky Department of Revenue.

Local Property Tax Rates Per $100 Valuation, 2014

Taxing Jurisdiction Property Taxes
Per $100 Valuation
  Real Estate Tangibles Motor Vehicles
Washington County $0.2709 $0.3415 $0.1756
City of Springfield $0.1524 $0.1524 $0.1480
Washington County School District $0.5890 $0.5890 $0.5500

Source: Kentucky Revenue Cabinet.

Local Occupational License Taxes, 2015

Cities, counties and school districts may levy an occupational license tax on the net profits of businesses and/or on the salaries and wages of employees earned in the jurisdiction. Rates can vary between the two types of occupational license taxes. Occupational license taxes may be levied on businesses as either a flat rate schedule or as a percentage of apportioned net profits or gross receipts. Where both the city and county levy an occupational license tax, a credit may be given, at the option of the local governments, for the amount paid to the city against the occupational license tax of the county. (Consult local jurisdictions for further details.)

Taxing Jurisdiction Tax Rate on Salaries/Wages Tax Rate on Net Profits/Receipts
Washington County 0.75% 0.75%
City of Springfield 1.00% 1.00%
Washington County School District Not Tax No Tax

Source: Kentucky Society of Certified Public Accountants.