About the Enterprise Zone Program:

The state tax incentives offered to a business located within the enterprise zone and certified as an enterprise zone qualified business are as follows:

	Building materials used in remodeling, rehabilitation, or new construction within the zone area are exempt from sales and use taxes.
	New and used machinery and equipment purchased, leased or rented and used by a qualified business within the enterprise zone are exempt from sales and use tax.
	Commercial vehicles purchased and used by a qualified business solely for business purposes shall be exempt from motor vehicle usage tax.
	Other vehicles which are not defined as commercial vehicles purchased and used by a qualified business solely for business purposes are exempt from motor vehicle usage tax, limited to the first $20,000 of the retail price of the vehicle.
	A qualified business shall be allowed a credit against the tax levied, pursuant to KRS 141.040, equal to 10% of the wages paid to each employee who has been unemployed for at least 90 days or who has received public assistance benefits, based on need and intended to alleviate poverty, for at least 90 days prior to being employed with the qualified business, up to $1,500 per employee.  Any unused credit may be carried forward for up to five (5) years.
	A local government has the option to levy an ad valorem tax rate on qualified property within the zone of one-tenth of one cent (.001cent) upon each $100 of value.
	Other local incentives offered by each individual enterprise zone.

Incentives provided by local government include moratoriums on tax assessments of rehabilitated structures, and waivers or reductions of permitting and licensing fees.

In order to receive these benefits, a company must be located in the Enterprise Zone and be certified by the Kentucky Enterprise Zone Authority. To be certified, each company must meet one of the following criteria:

	To qualify, a business must have 50% of its employees performing substantially all of their services within the enterprise zone.
	To qualify as a NEW BUSINESS (will begin/has begun operations in the enterprise zone after the date the zone was designated), 25% of the business’ employees working twenty hours or more per week at the facility located within the enterprise zone must meet the targeted workforce criteria and be maintained throughout certification. (A qualified seasonal employee shall be deemed to be employed for the entire calendar year).
	To qualify as an EXISTING BUSINESS (began operation in the enterprise zone prior to the designation of the zone), the business has the option of:   (a) increasing its capital investment by 20% over an 18 month period; or   (b) increasing its total workforce by 20%, of which, 25% of the new        employees must meet the targeted workforce criteria.

All certifications and monitoring activities are done by the Kentucky Enterprise Zone Authority in conjunction with the Department for Employment Services.

About the Enterprise Zone Employee Tax Credit

Effective for employees hired on or after July 14, 1992, a corporation certified by the Kentucky Enterprise Zone Authority as a qualified business is allowed a credit against the tax imposed by KRS 141.040 equal to 10 percent of eligible wages (first $15,000 of wages paid to each employee who has been unemployed for at least 90 days or has received public assistance benefits, based on need and intended to alleviate poverty, for at least 90 days prior to employment with the qualified business). Hiring employees who live within the zone allows the employer to meet their mandates to be certified but does not allow the employer to claim a tax credit. Use the Hopkinsville Enterprise Zone Street Guide to determine if your employee lives within the zone.

Schedule EZC, Form 720, should be filed to reflect the computation of the above credit earned for any taxable year during which the corporation paid eligible wages regardless of whether the corporation has a liability for that year. This form should also be filed any year for which a carryover is claimed regardless of whether any credit is earned in the current year. The credit cannot exceed $1,500 per employee, and any portion of the credit not used in the year earned may be carried forward for up to five years.

Employee Certification

Each employee on which the corporation claims the credit must have been certified by the Kentucky Department for Employment Services (DES), as meeting one of the above criteria. This certificate is obtained by the employee and employer completing the appropriate portions of the Enterprise Zone Program Employee/Employer Certification Form and obtaining the signature of authorized DES personnel. A copy of this certificate must be maintained by the corporation.

Department for Employment Services staff are also responsible for conducting an Employer Orientation to each employer seeking certification to explain the role of DES in the Enterprise Zone Program. During the Orientation the employer will be informed of the services available to them through DES and of the procedures to follow to ensure they hire and maintain the percentage of employees from the targeted workforce.

For more information on the Hopkinsville EZone, contact Mike Ousley, the Enterprise Zone Director, Hopkinsville-Christian County Planning Commission, 270-887-4285.

For employer certification, please contact Kay Farmer at 270-889-6509, ext. 241 or come by the Breathitt Career Center.

Phyllis Bruning, Director of the Kentucky Enterprise Zone Authority may be reached by telephone at 502-564-7670, by Fax at 502-564-7697 or by email to pbruning@mail.state.ky.us.