Kentucky Jobs Development Act

Company locates a national sales office in Northwest Kentucky.  The company data and project parameters consist of the following factors:

• The company will employ 100 Kentucky residents with an average annual wage of $30,000.
• The company leases office space for annual leasing costs of $200,000.
• The company’s total start-up costs of $2,000,000 is comprised of new office furniture, new equipment, and a computer system.
• XYZ Company’s project produces $1,000,000 in income subject to Kentucky income tax.  The Kentucky corporate income tax liability is calculated to be $77,625.

Based on the above assumptions, the company’s total Approved Costs would be as follows:

• Start-up costs of $2,000,000 x 50% = $1,000,000
• Rent costs of $200,000 for 10 years x 50% = $1,000,000
• Total Approved Costs = $2,000,000

During the ten-year period of the agreement, the approved company can use wage assessments and tax credits up to the amount of the Approved Costs.  For example:

• Wage assessments of up to 5% on the increased employment.
• $30,000 x 100 = $3,000,000 x 5% = $150,000 annually, or $1,500,000 during the 10 years.
• Annual corporate tax liability as a result of the project is assumed to be $77,625 for 10 years.
• The total wage assessment and tax credit of $1,500,000 and $776,250 equals $2,276,250.