Tourism Development Incentive Program

The Kentucky Tourism Development Act (KTDA) is an incentive program designed to encourage the development, expansion or rehabilitation of tourism projects throughout the Commonwealth.  Projects can recover up to 25 percent of approved development costs over a 10 year term through the recovery of incremental sales tax generated by the project.*

Types of Tourism Development Projects

  • Tourism attraction;
  • Theme restaurant destination attraction;
  • Entertainment destination center;
  • Lodging facility.

Eligible Tourism Attraction Projects (Minimum $1 Million Investment)

  • Cultural or historical sites;
  • Recreational facility;
  • Entertainment facility;
  • Area of scenic beauty or natural phenomenon;
  • Kentucky Crafts and Products Center; 


Eligible Full-Service Lodging Projects (Minimum $5 Million Investment))

  • Located on property owned by or leased by the Commonwealth or the federal government; or
  • Built with a tourism attraction project project which costs more than the lodging facility; or
  • Restoration or rehabilitation of a historic structure; or
  • Construction, restoration or renovation of a lodging facility having no less than 500 rooms with project costs exceeding $10,000,000; or
  • Construction, restoration, or renovation of a facility which is or will be an integral part of a major convention or sports facility with project costs exceeding $6,000,000; or
  • Construction, restoration, or renovation of a facility which is or will be located within a 50-mile radius of a property located on the National Register of Historic Places with a current function of recreation and is located within any of the 100 least populated counties in terms of population density.
*Some projects may be eligible to recover a higher share of approved costs, possibly over a longer term. For example, eligible lodging projects built on state or federal parks and recreational lands can recover up to 50 percent of development costs over 20 years.

Application and Approval Process

The company submits the application to the Secretary of the Tourism, Arts and Heritage Cabinet.


With the Secretary’s recommendation, the project will go before the Kentucky Tourism Development Finance Authority for preliminary approval. 


With preliminary approval, the Cabinet’s independent consultant will do an in-depth study to make sure the project meets the requirements of the Kentucky Tourism Development Act. This study will be paid for by the applicant in advance.


Using the consultant’s findings, the Secretary will determine whether to request the Authority give final approval.


Upon final approval from the Authority, an agreement will be signed by the applicant and the Commonwealth allowing the company to recover the sales tax generated on-site.


The applicant cannot begin construction until after final approval.


The Kentucky Tourism Development Finance Authority meets once a month to approve incentive requests.  The meetings are held at 1:30 PM the third Wednesday of every month at 500 Mero Street, Fifth Floor, Frankfort, KY 40601.


For a detailed discussion on this or any of our programs, please contact: 


Kimberly Gester

Director of Tourism Development

Call: 502-892-3198

Email: [email protected]