SPONSORED: NKY Small Businesses Benefit from Kentucky Tax Credit Program

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When Erlanger-based Engenesys was adding to its team, the Kentucky Small Business Tax Credit (KSBTC) Program helped the company hire the talent they wanted. 

Engenesys Co-founder John Paselsky said they are very selective in their hiring process, so knowing the tax credit was available offered them the opportunity to onboard professionals who would fit well in their company. 

“It gave us more flexibility in salary negotiation,” he said. 

The KSBTC is open to nearly all industry segments, including retail and service businesses, and can be awarded to companies with 50 or fewer full-time employees that have purchased at least $5,000 in qualifying equipment or technology and hired and sustained at least one new Kentucky-resident job. This position must be filled for 12 months.

Applications must be submitted within the 24-month period after the first program requirement occurs. 

Paselsky is responsible for business development at Engenesys, which designs and manufactures custom automation. They work with a diverse group of companies, from local, small businesses to large operations such as Toyota, Procter & Gamble, and Anheuser-Busch. 

In 2022, the company received $21,000 through the KSBTC program. They had previously purchased new computers and office and shop equipment, and hired new staff in 2020, 2021, and 2022. 

Chris Cook, business development director and partner at Florence-based TKOR Holdings, was able to take advantage of this program in 2020 and 2021. Cook learned about the program through his work with BE NKY Growth Partnership. 

TKOR Holdings is the ownership holding company of six Northern Kentucky-based, construction-industry businesses: BBG Concrete, Landworx Excavation, Cru Cutters Landscape Services, Kramer Pools, Arlinghaus Electric, and Beaumont Building Group. 

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TKOR acts as the ownership entity and back-office support for these companies, which employ a total of about 160-170 people, but each business qualifies for the tax credit individually, so Cook was able to take advantage of it with multiple companies. The program was a good fit for them at the time, he said, because they were in a period of heavy growth in terms of both employees and equipment. 

In 2020, they received credits for four businesses for a total of $45,500 across the four companies. In 2021, they again received credits for four businesses for a total credit of $70,000. 

Cook said these are substantial amounts for small businesses and helped offset some costs related to the COVID-19 pandemic. Without these funds, he said they wouldn’t have been as successful and grown as rapidly as they did. 

“It provided some extra support from a cash flow perspective,” said Cook. 

Kramer Pools purchased a new concrete pump, a very expensive piece of equipment. Their previous pump was more than 25 years old, but Cook said the cost makes it hard to invest in a new one, but the KSBTC funds enabled them to take that leap.

Cook said they weren’t able to take advantage of the program in 2022, but they will re-evaluate in 2023, and he encourages other small businesses to do the same. 

“I recommend the program to business owners I encounter fairly often,” said Cook. 

The KSBTC program offers small businesses a credit between $3,500 and $25,000 per year.

The credit amount is dependent on the number of jobs created and the amount of money invested, but companies that receive the credit earn an average of $14,713. 

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During hundreds of meetings each year, BE NKY Director of Business Retention Angie Mulberry helps Northern Kentucky companies become familiar with resources that are available to them, including the KSBTC and other programs available through the state.  

To meet with Angie, or learn more about these resources, contact her at [email protected]

To learn more about the Kentucky Small Business Tax Credit, click here.

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