KRS 154.32-090: Wage assessments against employees -- Calculation of amount -- Credit

against individual income tax for employees -- Assessment to cease at

expiration of tax incentive agreement.

(1) An approved company or, with the authority's consent, an affiliate of an approved

company may impose wage assessments against employees as provided in this

section if a wage assessment is included in the incentives awarded to the approved

company in the tax incentive agreement. The level of wage assessment shal l be

negotiated as part of the tax incentive agreement.

(2) If an economic development project is located in a heritage county, the approved

company or, with the authority's consent, an affiliate of the approved company may

require that each employee subje ct to the tax imposed by KRS 141.020, whose job

is determined by the authority to be created as a result of the economic development

project, as a condition of employment, agree to an assessment of up to one hundred

percent (100%) of the individual income tax rate imposed by KRS 141.020, and

that assessment shall operate as the Commonwealth's wage assessment. Although

not required for an economic development project located in a heritage county, a

local jurisdiction may agree to forgo all or a portion of its local occupational license

fee as a local wage assessment.

(3) (a) If the economic development project is not located in a heritage county, and is

located in a local jurisdiction where:

1. No local occupational license fee is imposed;

2. a. A local occup ational 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, as the local wage

assessment, at least twenty percent (20%) of the individual inco me

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; then

(b) An approved company or, with the authority's consent, an affiliate of an

approved company may require that each employee subject to tax imposed by

KRS 141.020, whose job is determined by the authority to be created as a

result of the economic deve lopment project, as a condition of employment,

agree to pay an assessment of up to sixty percent (60%) of the individual

income tax rate imposed by KRS 141.020 and that assessment shall operate as

the Commonwealth's wage assessment.

(4) (a) If the economic development project is not located in a heritage county, and 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 individual income tax rate in KRS 141.020 as the local wage

assessment; or

2. a. A local occupational license fee of lesse r 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; then

(b) An approv ed company or, with the authority's consent, an affiliate of an

approved company may require that each employee subject to tax imposed by

KRS 141.020, whose job is determined by the authority to be created as a

result of the economic development project, a s a condition of employment,

agree to pay an assessment equal to three (3) times the forgone local wage

assessment rate and that assessment shall operate as the Commonwealth's

wage assessment.

(5) If the project is not located in a heritage county, and:

(a) Is located in a local jurisdiction that does not impose a local occupational

license fee, the local jurisdiction shall be required to provide some alternative

inducement satisfactory to the authority at the local level in order for a

preliminarily approv ed company to receive final approval. However, the

authority may waive this requirement if there are reasonable circumstances

that prevent the local jurisdiction from providing a reasonable inducement; or

(b) Is located in a local jurisdiction that does im pose a local occupational license

fee, the jurisdiction may request that the authority waive the local

occupational license fee requirements established by subsection (3) or (4) of

this section if the local jurisdiction offers alternative inducements of si milar

value satisfactory to the authority. The authority shall review all requests for a

waiver, and may waive the local occupational license fee requirements and

instead require the local jurisdiction to provide alternative inducements of

similar value if the authority determines that the circumstances warrant an

alternative contribution by the local jurisdiction.

(6) Each employee paying the assessment shall simultaneously be entitled to a credit

against the Kentucky individual income tax required to be w ithheld under KRS

141.310 equal to the state portion of the assessment and shall be entitled to a credit

against the local occupational license tax equal to the local portion of the

assessment.

(7) If more than one (1) local jurisdiction imposes an occupational license fee, the local

jurisdiction portion of the assessment shall be prorated proportionately among the

taxes imposed by the local jurisdictions unless one (1) local jurisdiction agrees to

forgo the receipt of these taxes in an amount equal to the local jurisdiction portion

of the wage assessment, in which case no proration shall be made.

(8) If a full -time employee subject to state tax imposed by KRS 141.020 is already

employed by the approved company at a site other than the site of the economic

development project, that full -time employee's job shall be deemed to have been

created when the full -time employee is transferred to the site of the economic

development project if the full -time employee's existing job is filled with a new

full-time employee.

(9) 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.

(10) Notwithstanding any other provision of the Kentucky Revised Statut es, if an

approved company elects not to deduct the assessment from each payment of wages

to the employee, but rather requests a reimbursement of state tax imposed by KRS

141.020 or local occupational tax in the aggregate after they have been paid to the

state or local jurisdiction, no interest shall be paid by the state or by the local

jurisdiction on that reimbursement.

(11) 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.

(12) An approved company imposing an assessment shall make its payroll, books, and

records available to the authority or the department upon request, and shall file with

the authority or department documentation pertainin g to the assessment as the

authority or department may require.

(13) 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 tax incentive agreement.