Kentucky Film Production: A Strategic Briefing for Industry Producers

Executive Summary

Kentucky has emerged as a premier production destination, offering one of the most aggressive and reliable financial incentive packages in the United States. Since the restoration of the Kentucky Entertainment Incentive (KEI) program in 2022, the Commonwealth has approved over 250 productions and created more than 27,000 jobs. The core value proposition centers on a 30% to 35% fully refundable tax credit—effectively cash back to the production—supported by a $75 million annual funding cap. With state-of-the-art infrastructure, such as the 52,000-square-foot LEX Studios, and significantly lower operational costs than Los Angeles or New York, Kentucky provides a high-credibility, low-friction environment for features, television series, and streaming content.

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The Kentucky Entertainment Incentive (KEI) Program

The KEI program is designed to reduce net production costs through a direct financial recovery model. Unlike many states that offer non-transferable deductions, Kentucky’s credits are refundable, providing actual cash back to the approved production company.

Core Incentive Structure

Credit Type

Rate

Requirement

Standard Credit

30%

All eligible Kentucky production expenditures.

Enhanced Credit

35%

Production in "Enhanced Counties" OR use of Kentucky-resident below-the-line crew.

Financial Caps and Availability

  • Annual Statewide Cap: $75,000,000 (Total pool).
  • Per-Project Cap: $10,000,000 per year, per production.
  • Continuous Production Reserve: $25,000,000 of the annual cap is reserved for multi-year/continuous projects.
  • 2026 Outlook: $75,000,000 is available for the 2026 calendar year.

Eligibility and Compliance

  • Eligible Projects: Feature films, TV series/episodic shows, miniseries, TV movies, pilots, documentaries, Broadway touring shows, streaming content (Netflix, Hulu, etc.), and industrial/commercial projects.
  • Minimum Spend: Requirements vary by project type; continuous productions require $1.5M+ KY spend per year from a $10M+ total budget.
  • Timeline: Principal photography must start within 6 months of approval; the project must wrap within 2 years of the start date in Kentucky.
  • Exclusions: Content that is obscene or negatively impacts Kentucky tourism/economy is ineligible. Non-resident kit rentals, airfare, and alcohol/tobacco are among the non-qualifying expenditures.

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Strategic Production Hubs: Lexington vs. Louisville

While Louisville offers urban architecture and historical landmarks, Lexington is positioned as the state’s primary infrastructure hub with specific financial advantages for producers.

The Lexington Advantage

  • State-of-the-Art Infrastructure: Lexington is home to LEX Studios, the largest production facility in the state. This 52,000-square-foot facility includes three sound stages, grip and electric equipment, and nine Avid edit bays optimized for remote collaboration.
  • Financial Synergy: Ten "Enhanced Incentive Counties" are located within an hour’s drive of Lexington. Shooting in these counties triggers the 35% tax credit on qualifying expenditures and wages, offering a significant budget advantage over Jefferson County (Louisville), which does not carry the enhanced status.
  • Location Versatility: Known as the "Horse Capital of the World," Lexington provides access to thoroughbred horse farms, bourbon distilleries, and historic estates. It has successfully doubled for major cities like Philadelphia and can depict 19th-century settings for period pieces.

Operational Efficiency

Producers report lower operational friction in Kentucky compared to traditional hubs:

  • Lower Costs: Reduced permitting fees, location fees, and police overtime costs.
  • Logistics: Less traffic congestion and easier parking for production trucks.
  • Municipal Support: Dedicated entities like FilmLEX provide concierge-level planning, assisting with permits, location scouting, and local vendor connections.

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Production Resources and Infrastructure

Kentucky has invested in a digital and professional infrastructure to support incoming Hollywood crews.

Essential Databases

  • Reel Scout: The official state database for crew, vendors, and filming locations. It allows producers to verify Kentucky-based spend, which is critical for maximizing the tax credit.
  • Local Crew Base: A growing network of union-aware, professional crew members reduces the need for expensive "imported" labor. Specialized services, such as high-level makeup FX and soundstage management, are now locally available.

Regional Support Entities

  • Kentucky Cabinet for Economic Development (CED): The primary state agency managing the KEI program.
  • FilmLEX: Focused on Lexington and Central Kentucky, led by industry veterans with experience at Disney and Universal.
  • Southern Kentucky Film Commission: Provides regional expertise and incentive guidance.
  • Louisville Film Office & 502 Film: Connects productions with resources in the Louisville region.

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The Economic Case for Kentucky

The decision to shoot in Kentucky is driven by a simple formula: Net Production Cost = Budget – Incentives – Operational Savings.

  • Proven Savings: Filming the project Mr. Manhattan in Kentucky saved the production approximately $300,000 compared to other state options.
  • Market Trends: As production costs in Los Angeles and New York continue to rise, Kentucky’s 30–35% cash-back incentive provides a critical budget cushion, particularly for indie and mid-budget productions (the 1M–10M "sweet spot").
  • Reliability: The state has demonstrated a consistent commitment to the program since 2022, with demand often outpacing the annual supply of credits, signaling a robust and competitive filming environment.

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Next Steps for Producers

To secure funding and begin production in Kentucky, the following actions are recommended:

  1. Initiate Contact: Email CED.KEI@ky.gov to schedule a mandatory introductory call with the Cabinet for Economic Development.
  2. Review Guidelines: Study the most current KEI guidelines and the KEI Application Sample PDF to ensure all projected expenditures qualify.
  3. Engage Regional Commissions: Reach out to FilmLEX (film@visitlex.com) or the Southern Kentucky Film Commission to begin location scouting and vendor identification.
  4. Utilize Reel Scout: Register and search the official database to build a local crew and vendor list to trigger the 35% incentive rate.
  5. Monitor Deadlines: Attend monthly KEDFA Council meetings and apply early in the calendar year, as the $75M annual cap can be exhausted quickly.

Key Contact

Kristina Slattery Commissioner,

Business Development Kentucky Cabinet for Economic Development 

Phone: 800.626.2930 

Email: Kristina.Slattery@ky.gov

information provided by KYfilm.org