306 KAR 1:070. Monitoring.
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 the procedure for monitoring an enterprise zone qualified business.
Section 1. Compliance Monitoring. (1) The authority shall, on an annual basis, in the month the business was qualified, mail to each qualified business an annual monitoring form. The form shall be completed and returned to the authority within thirty (30) days of receipt by the qualified business.
(2) A qualified business that fails to submit the annual monitoring form or fails to maintain compliance with the requirements of KRS 154.45-010(7) shall be given written notice by the authority, by certified mail, that the business shall lose its qualified business certificate within sixty (60) days from receipt of the notice, unless the business can provide sufficient written documentation demonstrating compliance with the requirements of KRS 154.45-010(7).
(3) The authority shall decertify a qualified business that:
(a) Fails to respond within the sixty (60) day period; or
(b) Provides insufficient written documentation of compliance.
(4) The authority shall notify the Revenue Cabinet in writing within thirty (30) days of the decertification of a qualified business resulting from any of the following circumstances:
(a) Failure to meet the targeted workforce criteria within ninety (90) days after start of operation;
(b) Failure to increase its capital investment by a minimum of twenty (20) percent within eighteen (18) months from the date of application;
(c) Failure to maintain at least twenty-five (25) percent of its total workforce from the targeted workforce; or
(d) Failure to submit the annual monitoring form.
Section 2. Repayment of Tax. (1) A qualified business decertified under Section 1(4)(a) or (b) of this administrative regulation shall:
(a) Repay the sales and use tax on purchases of machinery and equipment;
(b) Repay the usage tax on any vehicle purchased; and
(c) Be ineligible to claim income tax credit or exemption pursuant to KRS 141.040, for which enterprise zone credit or exemptions were previously claimed.
(2) A qualified business decertified under Section 1(4)(c) of this administrative regulation shall:
(a) Repay the sales and use tax on purchases of machinery and equipment;
(b) Repay the usage tax on any vehicle purchased; and
(c) Be ineligible to claim income tax credit or exemption pursuant to KRS 141.040, from the date the business receives notice by certified mail that the business has been decertified by the authority.
(3) A qualified business decertified under Section 1(4)(d) of this administrative regulation shall:
(a) Repay the sales and use tax on purchases of machinery and equipment;
(b) Repay the usage tax on any vehicle purchased; and
(c) Be ineligible to claim income tax credit or exemption pursuant to KRS 141.040, from the date that:
1. The last monitoring form was submitted to the authority; or
2. The business was certified by the authority, if no previous monitoring form was submitted.
(4) Repayment of the sales and use tax exemption claimed by the business shall be made directly to the Revenue Cabinet within twenty (20) days following the close of the month during which the qualified business received its decertification notice from the authority.
(5) The Revenue Cabinet shall be responsible for the collection of any sales and use tax, vehicle usage tax, or income tax credit the business fails to repay after decertification.
Section 3. Incorporation by Reference. (1) The following material is incorporated by reference:
(a) "Kentucky Enterprise Zone Program Qualified Existing Business/Capital Investment Annual Monitoring Form (10/99)"; and
(b) "Kentucky Enterprise Zone Program Qualified New Business Annual Monitoring Form (10/99)".
(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. 751; eff. 1-6-83; Am. 18 Ky.R. 2880; eff. 4-14-92; 26 Ky.R. 1198; 1540; eff. 2-16-2000.)