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Incentives/Policies for Renewables & Efficiency

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Sales Tax Exemption for Manufacturing Facilities   

Last DSIRE Review: 09/18/2014
Program Overview:
State: Kentucky
Incentive Type: Sales Tax Incentive
Eligible Efficiency Technologies: Energy Efficient Manufacturing Machinery and Equipment
Applicable Sectors: Industrial
Amount:100% sales and use tax refund
Maximum Incentive:50% of capital investment in the eligible project
Equipment Requirements:Must reduce energy consumption by 15%
Start Date:7/1/2008
Web Site:
Authority 1:
Date Effective:
KRS ยง 139.518
Authority 2:
103 KAR 31:200

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.

  Don Goodin
Kentucky Cabinet for Economic Development
Department of Financial Incentives
Old Capitol Annex
300 West Broadway
Frankfort, KY 40601
Phone: (502) 564-4554 Ext.3413
Web Site:
  Ricky Haven
Kentucky Department of Revenue
Sales and Use Tax Office of Sales and Excise Taxes
501 High Street
Frankfort, KY 40620
Phone: (502) 564-6828
Fax: (502) 564-2041
Web Site:
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Disclaimer: The information presented on the DSIRE web site provides an unofficial overview of financial incentives and other policies. It does not constitute professional tax advice or other professional financial guidance, and it should not be used as the only source of information when making purchasing decisions, investment decisions or tax decisions, or when executing other binding agreements. Please refer to the individual contact provided below each summary to verify that a specific financial incentive or other policy applies to your project.

While the DSIRE staff strives to provide the best information possible, the DSIRE staff, the N.C. Solar Center, N.C. State University and the Interstate Renewable Energy Council, Inc. make no representations or warranties, either express or implied, concerning the accuracy, completeness, reliability or suitability of the information. The DSIRE staff, the N.C. Solar Center, N.C. State University and the Interstate Renewable Energy Council, Inc. disclaim all liability of any kind arising out of your use or misuse of the information contained or referenced on DSIRE Web pages.

Copyright 2014 - 2015 North Carolina State University, under NREL Subcontract No. XEU-0-99515-01. Permission granted only for personal or educational use, or for use by or on behalf of the U.S. government. North Carolina State University prohibits the unauthorized display, reproduction, sale, and/or distribution of all or portions of the content of the Database of State Incentives for Renewables and Efficiency (DSIRE) without prior, written consent.