Current through Register Vol. 50, No. 6, December 1, 2023
RELATES TO:
KRS
141.010,
141.020,
141.030,
141.040,
141.0401,
141.422,
141.4242,
141.4246,
141.4248
NECESSITY, FUNCTION, AND CONFORMITY:
KRS
141.4242 provides a nonrefundable tax credit
to producers of ethanol.
KRS
131.130(1) authorizes the
department to promulgate administrative regulations necessary to administer and
enforce Kentucky's tax laws.
KRS
141.4246(2) requires the
department to promulgate an administrative regulation to establish the manner
in which a pass-through entity shall electronically notify the department of
who may claim the approved tax credit. This administrative regulation
establishes guidelines and filing requirements for an ethanol producer filing a
tax credit claim for gallons of ethanol produced in this state.
Section 1. Definitions.
(1) "Applicant" means an ethanol producer
that files a tax credit claim as provided by
KRS
141.4242.
(2) "Application" or "Schedule ETH" means the
Schedule ETH, Application, and Credit Certificate of Income Tax/LLET Credit
Ethanol (Revenue Form 41A720ETH) that is used to make an ethanol tax credit
claim with the department for gallons of ethanol produced in this state as
provided by
KRS
141.4242(3).
(3) "ASTM" means the American Society for
Testing and Materials.
(4)
"Corporation" is defined by
KRS
141.010(4).
(5) "Department" is defined by
KRS
141.010(5).
(6) "Ethanol" is defined by
KRS
141.422(9).
(7) "Ethanol producer" is defined by
KRS
141.422(11).
(8) "Identification number" means:
(a) Social Security number for
individuals;
(b) Federal Employer
Identification Number for general partnerships, estates, and trusts;
and
(c) Kentucky corporation income
tax and limited liability entity tax account number for corporations and
limited liability pass-through entities.
(9) "Individual" is defined by
KRS
141.010(13).
(10) "Limited liability pass-through entity"
is defined by
KRS
141.010(15).
(11) "Pass-through entity" is defined by
KRS
141.010(21).
(12) "Tax credit" means the ethanol tax
credit authorized by
KRS
141.4242 and
141.4246.
Section 2. Application for Tax
Credit. An applicant shall mail to the department a completed application on or
before January 15 for the preceding calendar year.
Section 3. Proof of ASTM standard
specification.
(1) An ethanol producer shall
provide proof that the ethanol gallons reported on the application meet ASTM
standard specification D4806 for ethanol.
(2) Proof submitted by an ethanol producer
shall be in the form of documentation of laboratory results that certify that
the ethanol reported on the Schedule ETH meets the ASTM standard
specification.
(3) An independent
ASTM certified laboratory shall be used to generate the laboratory results that
are required by this section.
(4)
Failure to submit documented laboratory results that certify that the ethanol
meets the ASTM standard specification with the Schedule ETH shall result in the
department disallowing the credit.
(5)
(a) An
ethanol producer shall have the ethanol tested as provided by subsection (2) of
this section on July 1 and December 31 of each calendar year to determine if
the ethanol meets the ASTM standard specification.
(b) A copy of the laboratory results for July
1 and December 31 of each calendar year shall be attached to the application,
Schedule ETH, submitted to the department as provided by Section 2 of this
administrative regulation.
(c)
Failure to provide proof of meeting the ASTM standard specification on July 1
and December 31 of each calendar year with the application shall result in the
denial of the credit for gallons of ethanol back to the previous testing date
of July 1 or December 31.
(d) If
proof is timely submitted and the proof certifies that the ethanol does not
meet the ASTM standard specification, then all credit claimed for gallons of
ethanol back to the previous testing date of July 1 or December 31 shall be
disallowed.
Section
4. Filing Requirements.
(1) An
applicant claiming the tax credit shall attach the credit certificate issued by
the department to the tax return on which the tax credit is claimed.
(2) A partner, member, or shareholder
claiming the tax credit shall attach a copy of Schedule K-1: Form 720S, Form
number 41A720S(K-1); Form 765, Form number 41A765(K-1); or Form 765GP, Form
number 42A765GP(K-1) to the partner's, member's, or shareholder's tax return on
which the credit is claimed.
Section
5. Electronic Filings for Pass-through Entities.
(1) Each pass-through entity or agricultural
cooperative association organized under KRS Chapter 272 claiming the ethanol
tax credit shall file a report with the department by electronic mail at
KRC.WEBResponseEconomicDevelopmentCredits@ky.gov.
(2) The electronic mail shall contain a
separate attachment in plain format text or plain ASCII format that includes
each partner's, member's, or shareholder's:
(a) Name;
(b) Address;
(c) Telephone number;
(d) Identification number; and
(e) Distributive share of the tax
credit.
36 Ky.R. 1553;
2042-M; eff. 4-2-2010; 45 Ky.R. 77, 1180; eff.
12-7-2018.
STATUTORY AUTHORITY:
KRS
131.130,
141.4246