NEWS RELEASE
FRANKFORT – State Rep. Rick Nelson has pre-filed a bill designed to boost efforts to create jobs in Southeastern Kentucky where the economy has been rattled by a sharp drop in coal employment.
The bill would allow retailers in the designated federal Promise Zone, an area that includes Bell, Clay, Harlan, Knox, Leslie, Letcher, Perry and Whitley counties, to retain the sales and use tax collected instead of remitting the tax to the state. Nelson (Bell-Harlan) said this portion of the proposed incentives would allow retailers to retain approximately $22 million of state tax dollars, using those dollars to strengthen the local economies.
The proposal would also allow an income tax credit for qualified employers in an amount equal to $100 for each qualified employee working within the Promise Zone. For qualified employees working in the Promise Zone, the bill would allow an individual income tax credit equal to the individual income tax on wages earned in the promise zone, not to exceed $2,400.There is a $3 million threshold for businesses to be eligible for this program.
Nelson and state Rep. Tim Couch (Clay, Laurel and Leslie) introduced a similar bill during the 2015 General Assembly. Nelson said he will continue to push for the legislation because it would provide an incentive for businesses to set up shop and expand since the designation doesn’t come with federal tax credits. This bill is similar to that currently being sponsored by Senator Rand Paul designed for the federal Promise Zone.
“Tax incentives can give the struggling community a powerful boost,” he said. “Incentives can encourage economic development, business expansion and job creation. That’s the intent of my proposal. Helping businesses in this way further the Commonwealth’s goals of achieving long-term economic growth and employment opportunities for its citizens.”
The proposed tax incentives would expire in December 2021.