154.26.090 Revitalization agreement -- Tax credits -- Occupational license fee termination -- Assessment fee -- Effect of excess in assessments.
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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 <br>provisions of each agreement, including the amount of approved costs, the amount <br>of the license tax credit pursuant to KRS 136.0704, and any limitations the authority <br>may deem necessary, shall be determined by negotiations between the authority and <br>the approved company, except that each agreement shall include the following <br>provisions: <br>(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 <br>approved company shall document the actual cost of the project in a manner <br>acceptable to the authority. The authority may employ an independent <br>consultant or utilize technical resources to verify the cost of the project. The <br>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 <br>the agreement is in effect, which time shall commence on the date of the <br>agreement for purposes of the inducements: <br>1. A credit against the Kentucky tax imposed by KRS 141.020 or 141.040 <br>on the income of the approved company generated by or arising out of <br>the economic revitalization project and a credit against the limited <br>liability entity tax imposed by KRS 141.0401 on Kentucky gross profits <br>or Kentucky gross receipts as determined under KRS 141.403. The <br>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 <br>determined under KRS 136.0704; plus 3. The aggregate assessment withheld by the approved company in each <br>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 <br>recover under paragraph (a) of this subsection that has not yet been recovered, <br>reduced by any recovery through the collection of assessments and <br>appropriations made under any appropriation agreement. The credit shall be <br>allowed for each fiscal year of the approved company during the term of the <br>agreement and for which a tax return of the approved company is filed until <br>the amount that the company may recover under paragraph (a) of this <br>subsection has been received through a combination of credits, assessments, if <br>assessments are elected to be imposed, and appropriations made under any <br>appropriation agreement. The approved company shall not be required to pay <br>estimated tax payments as prescribed under KRS 141.044 or 141.305 on income, Kentucky gross profits or Kentucky gross receipts from the economic <br>revitalization project. Ninety (90) days after the filing of the tax return of the <br>approved company, the Department of Revenue of the Commonwealth shall <br>certify to the authority for the preceding fiscal year of an approved company <br>for which a return was filed with respect to an economic revitalization project <br>of the approved company the state tax liability of the approved company <br>receiving inducements under KRS 154.26-015 to 154.26-100 and the amount <br>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: <br>1. The date on which the approved company has received inducements or <br>withheld assessments equal to the amount that the company may recover <br>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 <br>license fees one (1) of the following: <br>1. A resolution or order of the local governmental entities acknowledging <br>and consenting to the termination or partial termination of the receipt of <br>local occupational license fees paid by the approved company on behalf <br>of its employees to the local government entities resulting from the <br>execution of the agreement; or 2. In lieu of the credit against the local occupational license fee, an <br>appropriation agreement with the authority and the local governmental <br>entities by which the local governmental entities will appropriate funds <br>in an amount equal to the amount of the credit of the local occupational <br>license fee for the benefit of the approved company in a manner <br>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 <br>employees shall be credited against the local occupational license fee and shall <br>be apportioned to each local occupational license fee according to each local <br>occupational license fee's proportion to the total of all local occupational <br>license fees for such employees. No credit, or portion thereof shall be allowed <br>against any local occupational license fee imposed by or dedicated solely to a <br>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 <br>assessment collected from the wages of the employees exceeds the expended <br>portion of the amount that the approved company may recover under <br>paragraph (a) of this subsection, the approved company shall pay the excess to <br>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 <br>expended portion of the amount that the approved company may recover <br>under paragraph (a) of this subsection, the assessment collected from the <br>wages of the employees shall cease for the remainder of that fiscal year of the <br>approved company, the approved company shall resume normal personal <br>income tax and occupational license fee withholdings from the employees' <br>wages for the remainder of that fiscal year, and the approved company shall <br>remit to the Commonwealth and applicable local jurisdictions their respective <br>shares of the excess assessment collected on the withholding filing date for <br>employees' wages next succeeding the first date when the approved company <br>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 <br>within five (5) years from the date of the revitalization agreement. In the event <br>that all proceeds of any loan or other financing incurred in connection with the <br>economic revitalization project are not fully expended within the five (5) year <br>period, the authorized inducements shall automatically be reduced to and shall <br>not be greater than the amount of proceeds actually expended by the approved <br>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 <br>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 <br>authority. Effective: June 28, 2006 <br>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. -- <br>Amended 2004 Ky. Acts ch. 18, sec. 1, effective July 13, 2004; and ch. 105, sec. 12, <br>effective July 13, 2004. -- Amended 2000 Ky. Acts ch. 547, sec. 3, effective July 14, <br>2000. -- Amended 1996 Ky. Acts ch. 194, sec. 47, effective July 15, 1996. -- <br>Amended 1994 Ky. 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PDF...\u003c/div\u003e\u003cscript type=\"text/javascript\"\u003e var pdf_url = 'https://law.justia.com/codes/kentucky/2009/154-26/pdf/090.pdf'; $(document).ready(function() { var embedwindow = $(\"#embed_document\"); if ($.browser.msie){ embedwindow.html('\u003cembed src=\"'+pdf_url+'\" width=\"100%\" height=\"100%\"\u003e\u003c/embed\u003e'); } else { embedwindow.html('\u003ciframe style=\"width:100%; height:100%;\" src=\"https://docs.google.com/gview?url='+window.escape(pdf_url)+'\u0026embedded=true\" frameborder=\"0\"\u003e\u003c/iframe\u003e'); } });\u003c/script\u003e\u003cbr\u003e\u003cbr\u003e\u003cnoframes\u003e154.26-090 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 \u003cbr\u003eprovisions of each agreement, including the amount of approved costs, the amount \u003cbr\u003eof the license tax credit pursuant to KRS 136.0704, and any limitations the authority \u003cbr\u003emay deem necessary, shall be determined by negotiations between the authority and \u003cbr\u003ethe approved company, except that each agreement shall include the following \u003cbr\u003eprovisions: \u003cbr\u003e(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 \u003cbr\u003eapproved company shall document the actual cost of the project in a manner \u003cbr\u003eacceptable to the authority. The authority may employ an independent \u003cbr\u003econsultant or utilize technical resources to verify the cost of the project. The \u003cbr\u003eapproved 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 \u003cbr\u003ethe agreement is in effect, which time shall commence on the date of the \u003cbr\u003eagreement for purposes of the inducements: \u003cbr\u003e1. A credit against the Kentucky tax imposed by KRS 141.020 or 141.040 \u003cbr\u003eon the income of the approved company generated by or arising out of \u003cbr\u003ethe economic revitalization project and a credit against the limited \u003cbr\u003eliability entity tax imposed by KRS 141.0401 on Kentucky gross profits \u003cbr\u003eor Kentucky gross receipts as determined under KRS 141.403. The \u003cbr\u003eordering of credits shall be as provided in KRS 141.0205; 2. A credit against the Kentucky license tax imposed by KRS 136.070 as \u003cbr\u003edetermined under KRS 136.0704; plus 3. The aggregate assessment withheld by the approved company in each \u003cbr\u003eyear. (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 \u003cbr\u003erecover under paragraph (a) of this subsection that has not yet been recovered, \u003cbr\u003ereduced by any recovery through the collection of assessments and \u003cbr\u003eappropriations made under any appropriation agreement. The credit shall be \u003cbr\u003eallowed for each fiscal year of the approved company during the term of the \u003cbr\u003eagreement and for which a tax return of the approved company is filed until \u003cbr\u003ethe amount that the company may recover under paragraph (a) of this \u003cbr\u003esubsection has been received through a combination of credits, assessments, if \u003cbr\u003eassessments are elected to be imposed, and appropriations made under any \u003cbr\u003eappropriation agreement. The approved company shall not be required to pay \u003cbr\u003eestimated tax payments as prescribed under KRS 141.044 or 141.305 on income, Kentucky gross profits or Kentucky gross receipts from the economic \u003cbr\u003erevitalization project. Ninety (90) days after the filing of the tax return of the \u003cbr\u003eapproved company, the Department of Revenue of the Commonwealth shall \u003cbr\u003ecertify to the authority for the preceding fiscal year of an approved company \u003cbr\u003efor which a return was filed with respect to an economic revitalization project \u003cbr\u003eof the approved company the state tax liability of the approved company \u003cbr\u003ereceiving inducements under KRS 154.26-015 to 154.26-100 and the amount \u003cbr\u003eof any tax credits taken pursuant to this section. (e) The agreement shall provide that the term shall not be longer than the earlier of: \u003cbr\u003e1. The date on which the approved company has received inducements or \u003cbr\u003ewithheld assessments equal to the amount that the company may recover \u003cbr\u003eunder 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 \u003cbr\u003elicense fees one (1) of the following: \u003cbr\u003e1. A resolution or order of the local governmental entities acknowledging \u003cbr\u003eand consenting to the termination or partial termination of the receipt of \u003cbr\u003elocal occupational license fees paid by the approved company on behalf \u003cbr\u003eof its employees to the local government entities resulting from the \u003cbr\u003eexecution of the agreement; or 2. In lieu of the credit against the local occupational license fee, an \u003cbr\u003eappropriation agreement with the authority and the local governmental \u003cbr\u003eentities by which the local governmental entities will appropriate funds \u003cbr\u003ein an amount equal to the amount of the credit of the local occupational \u003cbr\u003elicense fee for the benefit of the approved company in a manner \u003cbr\u003econsistent 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 \u003cbr\u003eemployees shall be credited against the local occupational license fee and shall \u003cbr\u003ebe apportioned to each local occupational license fee according to each local \u003cbr\u003eoccupational license fee's proportion to the total of all local occupational \u003cbr\u003elicense fees for such employees. No credit, or portion thereof shall be allowed \u003cbr\u003eagainst any local occupational license fee imposed by or dedicated solely to a \u003cbr\u003elocal 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 \u003cbr\u003eassessment collected from the wages of the employees exceeds the expended \u003cbr\u003eportion of the amount that the approved company may recover under \u003cbr\u003eparagraph (a) of this subsection, the approved company shall pay the excess to \u003cbr\u003ethe 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 \u003cbr\u003eexpended portion of the amount that the approved company may recover \u003cbr\u003eunder paragraph (a) of this subsection, the assessment collected from the \u003cbr\u003ewages of the employees shall cease for the remainder of that fiscal year of the \u003cbr\u003eapproved company, the approved company shall resume normal personal \u003cbr\u003eincome tax and occupational license fee withholdings from the employees' \u003cbr\u003ewages for the remainder of that fiscal year, and the approved company shall \u003cbr\u003eremit to the Commonwealth and applicable local jurisdictions their respective \u003cbr\u003eshares of the excess assessment collected on the withholding filing date for \u003cbr\u003eemployees' wages next succeeding the first date when the approved company \u003cbr\u003ecollected 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 \u003cbr\u003ewithin five (5) years from the date of the revitalization agreement. In the event \u003cbr\u003ethat all proceeds of any loan or other financing incurred in connection with the \u003cbr\u003eeconomic revitalization project are not fully expended within the five (5) year \u003cbr\u003eperiod, the authorized inducements shall automatically be reduced to and shall \u003cbr\u003enot be greater than the amount of proceeds actually expended by the approved \u003cbr\u003ecompany 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 \u003cbr\u003eindividual 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 \u003cbr\u003eauthority. Effective: June 28, 2006 \u003cbr\u003eHistory: 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. -- \u003cbr\u003eAmended 2004 Ky. Acts ch. 18, sec. 1, effective July 13, 2004; and ch. 105, sec. 12, \u003cbr\u003eeffective July 13, 2004. -- Amended 2000 Ky. Acts ch. 547, sec. 3, effective July 14, \u003cbr\u003e2000. -- Amended 1996 Ky. Acts ch. 194, sec. 47, effective July 15, 1996. -- \u003cbr\u003eAmended 1994 Ky. 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