306 KAR 1:040. Qualified business certificates.

306 KAR 1:040. Qualified business certificates.

RELATES TO: KRS 141.040, 154.45-001-154.45-120

STATUTORY AUTHORITY: KRS 154.45-070(1)

NECESSITY, FUNCTION, AND CONFORMITY: KRS 154.45-070(1) requires the Enterprise Zone Authority of Kentucky to promulgate administrative regulations to monitor compliance by local governments and qualified businesses with the provisions of the Enterprise Zone Program. This administrative regulation establishes procedures for:

(1) Issuance of a qualified business enterprise zone certificate; and

(2) Use of revenue exemption certificates.

Section 1. Qualified Business Certificates. (1) The authority shall issue a separate certificate to a qualified business, or to a business applying for certification as a qualified business, for each additional location certified under the same qualified business number, if each location is:

(a) In the same enterprise zone; and

(b) Operating under the same:

1. Federal employer identification number; or

2. Social Security number.

(2) Each certificate issued for an additional location shall contain:

(a) The same enterprise zone business number as qualified business' number; and

(b) A separate location number, in parentheses.

(3) A qualified business certified as having more than one (1) qualified business location shall be entitled to claim a tax exemption for the additional business location, pursuant to KRS 154.45-090, only from the date the additional business location was certified.

Section 2. Change of Business Name or New/Additional Location to Qualified Business Certificate. (1) A qualified business that plans to move from a certified location to a new location within the same enterprise zone, or that plans to change the name of the qualified business shall request a new certificate by submitting:

(a) A completed original of a Request for Change or Additional Location to Enterprise Zone Qualified Business Certificate; or

(b) A letter containing the same information required by the form in paragraph (a) of this subsection, and signed by an authorized representative of:

1. The business; and

2. The local enterprise zone.

(2) A previously qualified business that changes name or location, or adds a location, within an enterprise zone shall not be eligible for tax exemptions provided by KRS 154.45-090 unless the authority issues an updated certificate.

Section 3. Merger or Sale of Qualified business. (1) A qualified business sold or merged with another business that remains within the same enterprise zone and continues normal operation shall be eligible to have the qualified business certificate transferred if the business seeking to retain certification maintains the eligibility requirements specified in KRS 154.45-010(7).

(2) A business seeking to retain the qualified business certification shall submit to the authority the following information:

(a) A completed original of a Request for Change or Additional Location to Enterprise Zone Qualified Business Certificate;

(b) Written verification from the original enterprise zone qualified business that it agrees to surrender its qualified business certificate;

(c) Written verification that the business seeking to retain certification meets the criteria pursuant to KRS 154.45-010(7).

Section 4. Revenue Exemption Certificates. (1) To claim an exemption on sales and use tax for building materials used for remodeling, rehabilitation, or new construction within an enterprise zone, the property owner shall complete Revenue Form 51A152 and submit it to the vendor at the time the building materials are purchased.

(2) To claim an exemption on sales and use tax for new and used machinery and equipment, a qualified business shall complete Revenue Form 51A151 and submit it to the vendor at the time the machinery or equipment is purchased.

(3) To claim an exemption on sales and use tax for exempt building materials, machinery, or equipment installed in an enterprise zone, a contractor having contracts with a qualified business or other property owner within an enterprise zone must execute the appropriate certificate of exemption jointly with the person or business entitled to receive the exemption.

(4) To claim an exemption on vehicle usage tax for a commercial or noncommercial vehicle purchased and used by the qualified business solely for business use, the qualified business shall complete Revenue Form 71A151 and submit it to the county clerk in the county where the vehicle is registered.

(5) To claim the enterprise zone tax credit, a qualified business that files its state income tax pursuant to KRS 141.040 shall submit a Schedule EZC Form 720, 41A720EZC with its Kentucky state income tax return.

Section 5. Incorporation by Reference. (1) The following material is incorporated by reference:

(a) "Request for Change or Additional Location to Enterprise Zone Qualified Business Certificate (10/99)";

(b) "Enterprise Zone Sales And Use Tax Exemption Certificate for Qualified Businesses Machinery And Equipment (7/92)";

(d) "Enterprise Zone Motor Vehicle Usage Tax Exemption Certification (6/92)"; and

(e) "Enterprise Zone Tax Credit Schedule EZC Form 720 (10/98)".

(2) This material may be inspected, copied or obtained at the Cabinet for Economic Development Kentucky Enterprise Zone Program, Capital Plaza Tower, 24th Floor, 500 Mero Street, Frankfort, Kentucky 40601, (502) 564-7670, Monday through Friday, 8 a.m. to 4:30 p.m. (9 Ky.R. 750; eff. 1-6-83; Am. 13 Ky.R. 2038; eff. 7-2-87; 18 Ky.R. 2878; eff. 4-14-92; 26 Ky.R. 1196; 1539; eff. 2-16-2000.)