KRS 154.25-040: Wage assessment -- Tax credits for employees -- Department of

Revenue to make annual report to authority.

(1) The approved company may require that each employee subject to the income tax

imposed by KRS 141.020, whose job was preserved or created as a result of the

project, as a condition of employment or the retention of employment, agree to pay

an assessment up to one hundred percent (100%) of the individual income tax rate

imposed by KRS 141.020 for each employee subject to the income ta x imposed by

KRS 141.020. The Commonwealth's wage assessment shall be equal to the

following:

(a) Up to eighty percent (80%) of the individual income tax rate imposed by KRS

141.020 if the project is located in a local jurisdiction where:

1. No local occupational license fee is imposed;

2. a. A local occupational fee greater than or equal to twenty percent

(20%) of the individual income tax rate in KRS 141.020 is

imposed; and

b. The local jurisdiction agrees to forgo the local wage assessment of

at least tw enty percent (20%) of the individual income tax rate

imposed by KRS 141.020 via credits against the local occupational

license fee for the affected employees; or

3. a. A local occupational license fee less than twenty percent (20%) of

the individual income tax rate in KRS 141.020 is imposed; and

b. The local jurisdiction agrees to forgo the total amount of the local

occupational license fee as the local wage assessment; or

(b) Up to four (4) times the forgone local wage assessment rate if the project is

located in a local jurisdiction where:

1. a. A local occupational license fee greater than or equal to twenty

percent (20%) of the individual income tax rate in KRS 141.020 is

imposed; and

b. The local jurisdiction agrees to forgo an amount of the local

occupational license fee that is less than twenty percent (20%) of

the individu al income tax rate imposed by KRS 141.020 as the

local wage assessment; or

2. a. A local occupational license fee less than twenty percent (20%) of

the individual income tax rate in KRS 141.020 is imposed; and

b. The local jurisdiction agrees to forgo only a portion of the total

amount of the local occupational license fee as the local wage

assessment.

(2) Each assessed employee shall be entitled to a credit against the Kentucky income

tax required to be withheld under KRS 141.310 in the form of a simultane ous

adjustment equal to the Commonwealth's assessment outlined in subsection (1) of

this section.

(3) Each employee assessed under subsection (1) of this section also shall be entitled to

a credit against the local occupational license fee in the form of a simultaneous

adjustment of the local occupational license fee withholding equal to the local wage

assessment outlined in subsection (1) of this section.

(4) If an approved company elects to impose the assessment as a condition of

employment or the retenti on of employment, the approved company shall deduct

the assessment from each paycheck of each employee subject to the provisions of

subsections (2) and (3) of this section.

(5) Any approved company collecting an assessment shall make its payroll books and

records available to the authority at such reasonable times as the authority shall

request and shall file with the authority the documentation respecting the

assessment the authority may require.

(6) Any assessment of the wages of the employees of an appro ved company shall

permanently lapse upon expiration or termination of the agreement unless the

agreement has been amended to extend the termination as a result of a supplemental

project.

(7) By October 1 of each year, the Department of Revenue shall certify to the authority,

in the form of an annual report, aggregate tax credits claimed on tax returns filed

during the taxable year ending June 30 of that year and wage assessment fees taken

during the prior calendar year by approved companies with respect to their jobs

retention projects under this subchapter, and shall certify to the authority, within

one hundred eighty (180) days from the date an approved company has filed its

state tax return, when an approved company has taken tax credits equal to its tota l

inducements.