Sales Tax Exemption for Manufacturing Facilities

Last updated: August 28, 2018

Program Overview

Implementing Sector:State
Category:Financial Incentive
State:Kentucky
Incentive Type:Sales Tax Incentive
Web Site:http://www.thinkkentucky.com/kyedc/kybizince.aspx
Administrator:Office of Energy Policy
Start Date:07/01/2008
Eligible Efficiency Technologies:Other EE

Authorities

Name:KRS § 139.518
Effective Date:7/1/2008
Name:103 KAR 31:200

Summary

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 & 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.

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