154.24-110 Tax credits -- Employee job assessment fees.
(1)
(2)
The approved company shall be entitled to a tax credit equal to one hundred percent
(100%) of the income tax and one hundred percent (100%) of the limited liability
entity tax imposed by KRS 141.0401 that would otherwise be due to the
Commonwealth by the approved company attributable to the economic
development project, as limited by the provisions of this section and KRS 154.24130. The amount of the approved company's income, Kentucky gross profits, or
Kentucky gross receipts that is attributable to the economic development project
shall be determined under KRS 141.407. The ordering of credits shall be as
provided in KRS 141.0205.
(a) The tax credit allowed to the approved company shall be subtracted from the
approved cost balance in the fiscal year of the approved company for which
the tax return of the approved company is filed; and
(b) By October 1 of each year, the Department of Revenue of the Commonwealth
shall certify to the authority, in the form of an annual report, aggregate tax
credits claimed on tax returns filed during the fiscal year ending June 30 of
that year, and assessments taken by approved companies with respect to their
economic development projects during the prior calendar year under this
subchapter, and shall certify to the authority, within ninety (90) days from the
date an approved company has filed its state tax return, when an approved
company has taken tax credits and assessments equal to its total inducements.
The approved company or, with the authority's consent, an affiliate of the approved
company may require each employee, subject to state tax imposed by KRS 141.020,
as a condition of employment, to agree to pay a service and technology job creation
assessment fee up to five percent (5%) of the gross wages exclusive of any noncash
benefits provided to an employee for each employee whose job has been deemed by
the authority to be created as a result of the economic development project,
provided that the service and technology job creation assessment fee shall not
exceed the amount determined in accordance with KRS 154.24-150(5) if the
circumstances in that subsection apply. Where a person is already employed by the
approved company at a site other than the site of the economic development project
and where that employee is subject to state tax imposed by KRS 141.020, the
employee's job shall be deemed to have been created when the employee is
transferred to the site of the economic development project, provided that the
employee's existing job is filled with a new employee.
(a) Each employee paying the assessment shall be entitled to a credit against his
Kentucky income tax required to be withheld under KRS 141.310 equal to
four-fifths (4/5) of the assessment;
(b) If the assessment has been approved by the local jurisdiction as provided in
KRS 154.24-150, each employee paying the assessment also shall be entitled,
in the local jurisdiction in which the economic development project is located,
to a credit against his local occupational license fee in the form of a
simultaneous adjustment of his local occupational license fee withholding
equal to one-fifth (1/5) of the assessment. If more than one (1) local tax is
(3)
incurred, the one-fifth (1/5) assessment shall be prorated proportionately
among the taxes unless one (1) local jurisdiction agrees to forgo the receipt of
these taxes in an amount equal to the one-fifth (1/5) assessment, in which case
no proration need be made;
(c) If an approved company elects to impose the assessment as a condition of
employment, it shall be authorized to deduct the assessment from each
payment of wages to the employee;
(d) No credit, or portion thereof, shall be allowed against any occupational license
fee imposed by or dedicated solely to the board of education in a local
jurisdiction;
(e) The approved company collecting an assessment shall make its payroll, books,
and records available to the authority when the authority shall request, and
shall file with the authority documentation pertaining to the assessment as the
authority may require; and
(f) Any assessment of the wages of employees of an approved company in
connection with their employment at an economic development project shall
permanently cease at the expiration of the agreement.
Notwithstanding subsection (2) of this section, if a local government in which the
project is located has a local occupational license fee that is less than one percent
(1%) and agrees to forgo all of its local occupational license fee, then the
assessment shall be four percent (4%), all of which shall be contributed by the
Commonwealth, plus the percentage of the local occupational license fee that the
local government has agreed to forgo. Each employee paying the assessment under
this subsection shall be entitled to a credit against Kentucky income tax, under KRS
141.350, equal to four percent (4%) and a credit against the local occupational
license fee equal to the local occupational license fee that the local jurisdiction has
agreed to forgo.
Effective: June 28, 2006
History: Amended 2006 (1st Extra. Sess.) Ky. Acts ch. 2, sec. 52, effective June 28,
2006. -- Amended 2005 Ky. Acts ch. 85, sec. 580, effective June 20, 2005. -Amended 2002 Ky. Acts ch. 338, sec. 34, effective July 15, 2002. -- Amended 2000
Ky. Acts ch. 300, sec. 20, effective July 14, 2000. -- Amended 1996 Ky. Acts
ch. 194, sec. 39, effective July 15, 1996. -- Amended 1994 Ky. Acts ch. 450, sec. 16,
effective July 15, 1994. -- Created 1992 Ky. Acts ch. 358, sec. 11, effective July 14,
1992.
Legislative Research Commission Note (6/28/2006). 2006 (1st Extra Sess.) Ky. Acts
ch. 2, sec. 73, provides that "unless a provision of this Act specifically applies to an
earlier tax year, the provisions of this Act shall apply to taxable years beginning on or
after January 1, 2007."
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