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Two Shelby County businesses were among several statewide for which the Kentucky Economic Development Finance Authority board recently approved tax incentives.
Katayama America of Shelbyville and F.B. Purnell Sausage of Simpsonville are among those companies making or considering new investments.
The way that state tax incentives help companies is by permitting them to keep a portion of the occupational taxes withheld from employee paychecks to use to improve the business or to create jobs, provided they abide by the terms set down by the state.
Shelbyville Mayor Tom Hardesty said that the city, like the Shelby County Fiscal Court, works with the state in implementing these tax incentives in Shelby County.
“We have participated in the KBI incentives program for a lot of industries over the years,” he said. “The way it works is, for every dollar that the city or county gives up in occupational taxes, the employer can retain that out of your paycheck, but they don’t have to give it to the city or the county, they can keep it for their infrastructure investments, such as adding new machinery or adding square footage. The state will give them three dollars for every one dollar that we allow them to keep out of the occupational taxes.”
Katayama America, located on Midland Industrial Drive, received final approval for $440,000 to expand its plant, which produces door sash assemblies and trim moldings for vehicles. The company estimated that the expansion would cost $2.13 million. The expansion is expected to add 22 jobs that pay an average hourly wage of $20, including benefits.
“I’m very glad they are receiving this from the state,” Hardesty said. “In these economic times, getting more jobs and more commerce is a wonderful thing for our community.”
Purnell is receiving $30,000 toward a projected $1.4 million expansion of its plant on U.S. 60. No new jobs are expected to be created, but the tax incentive program does not require that.
Purnell CEO and co-owner Allen Purnell said the project involves an upgrade of the plant’s facilities, as well as increasing its refrigeration space.
“We are just replacing some outdated piping and so forth and updating our refrigeration units,” he said. “We’ll have more refrigeration space and get it under better control. We hope to be done by July. It’s mostly internal. It’s nothing you would notice from outside. We are not adding any more buildings. We are just taking take of our operation here and making sure our plant stays up to date. This plant’s been here since fifty-five, so modernization is very important. We’ve built around it four or five times.”
In 1955, Allen Purnell’s father, Fred, marketing his sausage as Old Folks, moved the plant from Louisville to Simpsonville, building a new plant on U.S. 60. The plant, although it has undergone expansion, never has changed location. Purnell’s now distributes its sausage to more than 40 states, shipping out 25 to 30 million pounds of sausage per year to retail stores and restaurants.
Purnell said the current improvements would provide potential for increased productivity down the road.
Simpsonville City Administrator David Eaton said he was very pleased that Purnell’s will be receiving help from the state.
“Purnell’s has been an incredible corporate neighbor and friend to the city of Simpsonville for years and years,” he said. “We are very supportive of them and are thrilled they were able to participate in this program from the state.”
Simpsonville Mayor Steve Eden echoed those sentiments.
“I think it’s great,” he said. “We’ve helped them [Purnell’s] in the past with economic bonds and so forth, and were glad to do it. We are glad to do anything we can to help them continue their operation.”