154.26.090 Revitalization agreement -- Tax credits -- Occupational license fee termination -- Assessment fee -- Effect of excess in assessments. - Kentucky Statutes

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154.26-090 Revitalization agreement -- Tax credits -- Occupational license fee termination -- Assessment fee -- Effect of excess in assessments. (1) The authority, upon adoption of its final approval, may enter into, with any approved company, an agreement with respect to its project. The terms and
provisions of each agreement, including the amount of approved costs, the amount
of the license tax credit pursuant to KRS 136.0704, and any limitations the authority
may deem necessary, shall be determined by negotiations between the authority and
the approved company, except that each agreement shall include the following
provisions:
(a) The amount the approved company may recover through inducements under this subchapter shall not exceed seventy-five percent (75%) of approved costs. (b) The agreement shall set a date by which the approved company will have completed the project. Within three (3) months of the completion date, the
approved company shall document the actual cost of the project in a manner
acceptable to the authority. The authority may employ an independent
consultant or utilize technical resources to verify the cost of the project. The
approved company shall reimburse the authority for the cost of the consultant. (c) In consideration of the execution of the agreement, the approved company may be permitted during the time not to exceed ten (10) years during which
the agreement is in effect, which time shall commence on the date of the
agreement for purposes of the inducements:
1. A credit against the Kentucky tax imposed by KRS 141.020 or 141.040
on the income of the approved company generated by or arising out of
the economic revitalization project and a credit against the limited
liability entity tax imposed by KRS 141.0401 on Kentucky gross profits
or Kentucky gross receipts as determined under KRS 141.403. The
ordering of credits shall be as provided in KRS 141.0205; 2. A credit against the Kentucky license tax imposed by KRS 136.070 as
determined under KRS 136.0704; plus 3. The aggregate assessment withheld by the approved company in each
year. (d) The tax credits allowed to the approved company shall be equal to the lesser of the total amount of the tax liability or the amount that the company may
recover under paragraph (a) of this subsection that has not yet been recovered,
reduced by any recovery through the collection of assessments and
appropriations made under any appropriation agreement. The credit shall be
allowed for each fiscal year of the approved company during the term of the
agreement and for which a tax return of the approved company is filed until
the amount that the company may recover under paragraph (a) of this
subsection has been received through a combination of credits, assessments, if
assessments are elected to be imposed, and appropriations made under any
appropriation agreement. The approved company shall not be required to pay
estimated tax payments as prescribed under KRS 141.044 or 141.305 on income, Kentucky gross profits or Kentucky gross receipts from the economic
revitalization project. Ninety (90) days after the filing of the tax return of the
approved company, the Department of Revenue of the Commonwealth shall
certify to the authority for the preceding fiscal year of an approved company
for which a return was filed with respect to an economic revitalization project
of the approved company the state tax liability of the approved company
receiving inducements under KRS 154.26-015 to 154.26-100 and the amount
of any tax credits taken pursuant to this section. (e) The agreement shall provide that the term shall not be longer than the earlier of:
1. The date on which the approved company has received inducements or
withheld assessments equal to the amount that the company may recover
under paragraph (a) of this subsection; or 2. Ten (10) years from the date of the execution of the agreement. (f) Prior to execution of the agreement, the eligible company shall secure from all local governmental authorities responsible for collecting local occupational
license fees one (1) of the following:
1. A resolution or order of the local governmental entities acknowledging
and consenting to the termination or partial termination of the receipt of
local occupational license fees paid by the approved company on behalf
of its employees to the local government entities resulting from the
execution of the agreement; or 2. In lieu of the credit against the local occupational license fee, an
appropriation agreement with the authority and the local governmental
entities by which the local governmental entities will appropriate funds
in an amount equal to the amount of the credit of the local occupational
license fee for the benefit of the approved company in a manner
consistent with the applicable state laws. (g) If more than one (1) local occupational license fee is imposed upon the employees of the approved company, the assessment imposed upon the
employees shall be credited against the local occupational license fee and shall
be apportioned to each local occupational license fee according to each local
occupational license fee's proportion to the total of all local occupational
license fees for such employees. No credit, or portion thereof shall be allowed
against any local occupational license fee imposed by or dedicated solely to a
local board of education. (h) If in any fiscal year of the approved company during which the agreement is in effect the total of the tax credits granted to the approved company plus the
assessment collected from the wages of the employees exceeds the expended
portion of the amount that the approved company may recover under
paragraph (a) of this subsection, the approved company shall pay the excess to
the Commonwealth as income tax. (i) If in any fiscal year of the approved company during which the agreement is in effect the assessment collected from the wages of the employees exceeds the
expended portion of the amount that the approved company may recover
under paragraph (a) of this subsection, the assessment collected from the
wages of the employees shall cease for the remainder of that fiscal year of the
approved company, the approved company shall resume normal personal
income tax and occupational license fee withholdings from the employees'
wages for the remainder of that fiscal year, and the approved company shall
remit to the Commonwealth and applicable local jurisdictions their respective
shares of the excess assessment collected on the withholding filing date for
employees' wages next succeeding the first date when the approved company
collected excess assessments. (j) All proceeds of any loan or other financing incurred in connection with the economic revitalization project shall be expended by the approved company
within five (5) years from the date of the revitalization agreement. In the event
that all proceeds of any loan or other financing incurred in connection with the
economic revitalization project are not fully expended within the five (5) year
period, the authorized inducements shall automatically be reduced to and shall
not be greater than the amount of proceeds actually expended by the approved
company within the five (5) year period. (2) If the approved company elects to utilize the assessment as prescribed in KRS 154.26-100, it shall not assess the wages of an employee who is party to an
individual employment contract with the approved company. (3) Neither the appropriation agreement nor the agreement shall be transferable or assignable by the approved company without the expressed written consent of the
authority. Effective: June 28, 2006
History: Amended 2006 (1st Extra. Sess.) Ky. Acts ch. 2, sec. 57, effective June 28, 2006. -- Amended 2005 Ky. Acts ch. 85, sec. 582, effective June 20, 2005. --
Amended 2004 Ky. Acts ch. 18, sec. 1, effective July 13, 2004; and ch. 105, sec. 12,
effective July 13, 2004. -- Amended 2000 Ky. Acts ch. 547, sec. 3, effective July 14,
2000. -- Amended 1996 Ky. Acts ch. 194, sec. 47, effective July 15, 1996. --
Amended 1994 Ky. Acts ch. 450, sec. 25, effective July 15, 1994.