Kenton County is in the process of updating two ordinances that doled out payroll tax credits for two local companies upgrading their facilities.
Last Tuesday, the Kenton County Fiscal Court conducted a first reading on two ordinances regarding occupational license fee credits, or payroll tax credits, given to Atlas Air and R.A. Jones & Co. as part of an incentive package approved through the Kentucky Business Investment program.
In late November, Kenton County passed an ordinance that reduced payroll tax rates to 0.6997% on all wages below 100% of the federal Social Security cap, which will be $168,600 in 2024. All ages above the cap would not be subject to occupational taxes. The new rates took place starting this year.
Due to the reduction of payroll tax rates, the state of Kentucky asked Kenton County to amend language for both ordinances so they would correspond with the county’s current rates.
“The state was aware that we had made changes to our payroll tax and so they asked us, because these things had gone to the state for approval for their state incentives, they asked us to clean up the language so it’s very clear,” Kenton County Administrator Joe Shriver said during the meeting.
In 2019, Atlas Air — a cargo airline with a global operations center based in Erlanger — was approved for up to $15 million in tax incentives by the Kentucky Economic Development Finance Authority through the Kentucky Business Investment program. Atlas Air was looking to upgrade its facility on Voix Road in Erlanger.
Under the incentive agreement, Atlas Air was required to reach annual job creation and average hourly wage benchmarks over ten years. By meeting these targets, Atlas Air is eligible to keep a portion of the new tax revenue it generates.
Atlas Air was expected to create 593 full-time jobs for Kentucky residents at an average wage of $80,000 per year, excluding benefits.
At the time, Kenton County supported a .25% tax credit for the new salaries of the Kentucky-resident jobs created by Atlas Air as part of the economic development program.
In 2021, Covington-based packaging designer and manufacturer R.A. Jones was approved for up to $2 million in tax incentives under the same Kentucky Business Investment program. The company was expanding its Crescent Springs Road manufacturing facility.
Like Atlas Air, R.A. Jones had job creation and average hourly wage benchmarks the company was required to meet over a 10-year period. R.A. Jones was expected to create 20 full-time jobs for Kentucky residents at an average wage of $89,440 per year, including benefits.
That year, Kenton County supported a .5% tax credit for the new salaries of the Kentucky-resident jobs created by R.A. Jones as part of the program.
“With our changes, it actually makes these more meaningful for the businesses,” Judge/Executive Kris Knochelmann said.
A second reading will take place at the next Kenton County Fiscal Court meeting, scheduled for 5:30 p.m. on Jan. 23 at the Kenton County Government Center in Covington.
