KRS 154.24-110: Tax credits -- Employee job assessment fees.

(1) 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 a pproved company attributable to the economic

development project, as limited by the provisions of this section and KRS 154.24 -

130. The amount of the approved company's income, Kentucky gross profits, or

Kentucky gross receipts that is attributable to the e conomic 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.

(2) 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 a mount 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 sub ject 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 adj ustment of his local occupational license fee withholding

equal to one -fifth (1/5) of the assessment. If more than one (1) local tax is

incurred, the one -fifth (1/5) assessment shall be prorated proportionately

among the taxes unless one (1) local jurisdic tion 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 t o 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.

(3) Notwithstanding subsection (2) of this section, if a local go vernment 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 contribute d 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.