154.32.090 Wage assessments against employees -- Calculation of amount based on participation of local jurisdiction -- Credit against individual income tax for employees -- Assessment to cease at expi - Kentucky Statutes

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Page 1 of 3 154.32-090 Wage assessments against employees -- Calculation of amount based on participation of local jurisdiction -- 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 shall be
negotiated as part of the tax incentive agreement. (2) If an economic development project is located in an enhanced incentive county, the approved company or, with the authority's consent, an affiliate of the approved
company may require that each employee subject 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 five percent (5%) of taxable wages. (3) (a) If the economic development project is not located in an enhanced incentive county, and is located in a local jurisdiction where:
1. No local occupational license fee is imposed; or 2. a. A local occupational license fee greater than or equal to one
percent (1%) is imposed; and b. The local jurisdiction agrees to forgo one percent (1%) via credits
against the local occupational license fee for the affected
employees; 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 development project, as a condition of employment,
agree to pay an assessment of up to four percent (4%) of taxable wages. (4) (a) If: 1. The economic development project is not located in an enhanced
incentive county, and is located in a jurisdiction where the local
occupational license fee is less than one percent (1%); and 2. The local jurisdiction agrees to forgo the total amount of the local
occupational license fee; 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 development project, as a condition of employment,
agree to pay an assessment of up to three percent (3%) of taxable wages, plus
a percentage equal to the amount of the local occupational license fee the local
jurisdiction agrees to forgo. (5) (a) If: Page 2 of 3 1. The project is not located in an enhanced incentive county and is located
in a county where the jurisdiction imposes a local occupational license
fee of less than one percent (1%); and 2. The local jurisdiction agrees to forgo only a portion of the total amount
of the local occupational license fee; 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 development project, as a condition of employment,
agree to pay an assessment to be determined as follows:
1. Divide the local occupational license fee that the local jurisdiction has
agreed to forgo by the total local occupational license fee imposed; 2. Multiply the result determined under subparagraph 1. of this paragraph
by three percent (3%); and 3. Add the result from subparagraph 2. of this paragraph to the local
occupational license fee that the local jurisdiction has agreed to forgo. (6) (a) If: 1. The project is not located in an enhanced incentive county, and is
located in a county where the jurisdiction imposes a local occupational
license fee equal to or greater than one percent (1%); and 2. The local jurisdiction agrees to forgo the local occupational license fee
in an amount of less than one percent (1%); 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 development project, as a condition of employment,
agree to pay an assessment to be determined as follows:
1. Divide the local occupational license fee that the local jurisdiction has
agreed to forgo by one percent (1%); 2. Multiply the result determined under subparagraph 1. of this paragraph
by three percent (3%); and 3. Add the result from subparagraph 2. of this paragraph to the local
occupational license fee that the local jurisdiction has agreed to forgo. (7) If the project is not located in an enhanced incentive county, and is located in a local jurisdiction where the jurisdiction 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 approved
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. (8) Each employee paying the assessment shall simultaneously be entitled to a credit against the Kentucky individual income tax required to be withheld under KRS Page 3 of 3 141.310 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. (9) 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. (10) 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. (11) 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 unless the approved company receives an advance
disbursement as set forth in KRS 154.32-080, in which case assessment claims shall
be filed with the department, but no assessment shall be withheld by the company
until the advance disbursement is repaid in full. (12) Notwithstanding any other provision of the Kentucky Revised Statutes, 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. (13) 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. (14) 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 pertaining to the assessment as the
authority or department may require. (15) 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. Effective: June 26, 2009
History: Created 2009 (1st Extra. Sess.) Ky. Acts ch. 1, sec. 18, effective June 26, 2009.