Tourism Development Incentive Program
The Kentucky Tourism Development Act is an incentive program designed to encourage the development, expansion or renovation of tourism projects throughout the Commonwealth. Eligible projects can recover up to 25 percent of approved development costs over a 10 year term through the recovery of sales tax generated by the project. Select projects may be eligible to recover a higher share of approved costs over a longer term.
The program enhances Kentucky’s appeal as a tourist destination and generates significant economic benefits for local communities while creating new job opportunities. Since its inception in 1996, the program has led to exciting projects including the Newport Aquarium, 4th Street Live, the expansion of Kentucky Kingdom, new horse racing tracks and improvements at existing facilities, full-service hotels as well as the renovation of historic buildings into boutique hotels and visitor experiences at both major and craft distilleries.
Types of Tourism Development Projects
- Entertainment destination center
- Lodging facility
- Theme restaurant destination attraction
- Tourism attraction
Minimum Criteria
- Investment varies by project type and location
- Generate sales tax on site
- Open for 100 days per year
- Attract 25 percent of visitors from out of state
- Have a net positive fiscal impact
Approval Process
- Applications are presented to the Kentucky Tourism Development Finance Authority for preliminary approval.
- With preliminary approval, the Tourism, Arts and Heritage Cabinet’s independent consultant will conduct an in-depth study to make sure the project meets the requirements of the Act. This study will be paid for by the applicant in advance.
- The findings from the study are certified by the State Budget Director and the Secretary of the Finance and Administration Cabinet.
- Using the consultant’s findings, the Cabinet Secretary determines whether to request final approval from the Authority.
- Upon final approval, an agreement will be signed by the applicant and the Commonwealth allowing the company to recover the sales tax generated on-site once operational.
- Acquisition and construction cannot begin until after final approval.
The Kentucky Tourism Development Finance Authority meets monthly to review incentive applications. The meetings are held at 1:30 PM Eastern the third Wednesday of every month at 500 Mero Street, Fifth Floor, Frankfort, KY and Zoom.
For a detailed discussion on this or any of our programs, please contact:
