Research & Development Incentives

Click on the links for more details:

Are you a small to medium size business that needs research and development funding? Research, Innovation & Technology Businesses
Are you a technology-driven, research-intensive industry? High-Tech Construction and Investment Pool.
Are you making building improvements or Investing in R&D? KEIA
Do you require funding for internal research & development activities? SBIR/STTR Grants and KSTC R&D Excellence Program
Are you collaborating on research and development with a Kentucky university? R&D Voucher Program
Do you need early stage capital to commercialize an innovative idea? Commonwealth Seed Fund

Research, Innovation & Technology Businesses

The Council on Postsecondary Education (CPE) plays a major role in attracting research and development work and in supporting innovation and inventions through three fund programs:

The Kentucky Research and Development Voucher Program provides state funds on a match basis to small and medium-size companies to undertake research and development work with a Kentucky university, with a maximum voucher award of $200,000 over two years. (KRS 164.6019 and 164.6021)
The Kentucky Rural Innovation Program provides seed funds to small rural Kentucky-based businesses to undertake research and development and entrepreneurial innovation in partnership with a Kentucky postsecondary institution or unaffiliated third party, with a maximum voucher award of $100,000 over two years. (KRS 164.6027 and 164.6029)
The Kentucky Commercialization Fund Program provides seed funds to Kentucky universities for the development of promising technologies and commercially successful products, processes, or services, through research and development work undertaken at a Kentucky university, with a maximum grant of $225,000 over three years. (KRS 164.6035 and 164.6037)

The Kentucky Science and Technology Corporation manages these funds under contract with the CPE. For more information on funding guidelines, see www.startupkentucky.com.

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High-Tech Construction and Investment Pool

Upon recommendation by the Commissioner, The Department for Commercialization and Innovation, in the Kentucky Cabinet for Economic Development, administers two pools of funds:

The High-Tech Construction Pool is used for projects with special emphasis on the creation of high-tech jobs and knowledge-based companies; and
The High-Tech Investment Pool is used to build and promote technology-driven industries and research-intensive industries with the goal of creating clusters of innovation-driven industries in Kentucky. The recommended funds are to be used to support loans and grants, or secure an equity or related position.

For more information see www.thinkkentucky.com/dci.

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Kentucky Enterprise Initiative Act (KEIA)

The Kentucky Enterprise Initiative Act (KEIA) provides sales tax refunds to any business entity which is involved in a new or expanded service, technology, manufacturing, or tourism attraction activity in Kentucky.

The project must involve a minimum investment of $100,000 if located in a preference zone (enterprise zone) and $500,000 if located outside the preference zone.

Eligible investment costs include:

Expenditures for research and development equipment,
Acquisition of real property, building, and
Construction materials, construction, installation, and rehabilitation of fixtures and facilities, necessary or desirable for improvement of real estate owned, used, or occupied by the approved company.

A KEIA pre-approved company is eligible to receive a refund of sales and use tax paid for construction materials and building fixtures and for equipment used in research and development purchased during the life of the project. An approved company has 18 months from the date of approval to purchase materials eligible for refund.

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SBIR/STTR Grants

This is a seed grant program to assist Kentucky's small companies in developing competitive, high quality Phase 1 proposals to any of the 10 federal agencies participating in the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs. Companies are eligible to apply for up to $4,000 to assist the preparation of the federal proposal. The goal of the Phase 0 program is to increase the number of winning proposals funded for Kentucky companies. Each year the Foundation offers workshops with panels from participating federal agencies and workshops on SBIR/STTR proposal writing for interested companies.

For more information see ksef.kstc.com.

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KSTC R&D Excellence Program

Small businesses having their principal business located in Kentucky are eligible to apply for R&D Excellence Program grants under the "emerging technologies" category, with awards ranging from $20,000 to $50,000. The R&D Excellence Program makes proactive investments in existing and emerging areas of research leading to innovation and technology development in five state-identified focus areas through a peer-review system. Emerging technologies are the subject of research and development activities, which are conducted to help the company further define and develop a new product or process technology. (KRS 154.12-320)

For more information see ksef.kstc.com.

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Commonwealth Seed Fund

The Commonwealth Seed Capital LLC (CSC) provides early-stage seed funds to facilitate the commercialization of innovative ideas and technologies developed in Kentucky. CSC will invest its capital in private venture capital funds that commit to invest at least three times the amount of capital invested in it by CSC in Kentucky technology companies.