Friday, November 05, 1999
Bill widens business tax credit
Ky. looks to keep employers
BY PATRICK CROWLEY
The Cincinnati Enquirer
FORT THOMAS Northern Kentucky's economy has grown at least in part because of tax breaks from the state that have been used to lure dozens of businesses and thousands of jobs into the region.
That has left some existing businesses at a competitive disadvantage because they aren't creating as many jobs as the new firms moving in and can't qualify for tax incentives, said state Rep. Joe Fischer, R-Fort Thomas.
Some of the existing busi nesses are saying, "Hey, you invited my competitor in with a tax break. I need something to remain competitive,' Mr. Fischer said.
Businesses already operating in Kentucky would qualify for a tax break under legislation filed by Mr. Fischer and two other Northern Kentucky lawmakers, Rep. Tom Kerr, D-Taylor Mill, and Sen. Dick Roeding, R-Lakeside Park.
The Kentucky Business Improvement Tax Credit will be considered by the General Assembly in January. It would allow an expanding Kentucky business to take an 8 percent credit against state income or license tax as long as the expansion increases the company's tax liability.
For example, Mr. Fischer said a company could receive an $8,000 tax credit when purchasing a $100,000 piece of equipment.
Farmers would also qualify for the break, he said.
This is a good idea for the entire state, Mr. Fischer said. About 90 percent of our increased employment comes from existing businesses that have already made a commitment to the state.
The bill was originally proposed by the Northern Kentucky Chamber of Commerce.
Most tax breaks offered to new companies moving to Kentucky are based on the number of jobs they create, said Larry Maxey, President of Clarion Manufacturing Corp. U.S.A. in Walton.
But in low unemployment areas like Northern Kentucky, existing employers find it difficult to meet those job creation requirements, said Mr. Maxey, the past vice chairman of the chamber's Industrial Council.
This allows companies to remain competitive with their counterparts in the immediate region and around the world, he said.
Last year, 25 new companies moved to Northern Kentucky and another 30 expanded, according to the Tri-County Economic Development Corp.
Those firms created 6,688 jobs and invested $654 million in buildings and equipment.
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