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,
141.4244,
141.4246,
141.4248
NECESSITY, FUNCTION, AND CONFORMITY:
KRS
141.4244 provides a nonrefundable tax credit
to producers of cellulosic 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 a cellulosic ethanol
producer filing a tax credit claim for gallons of cellulosic ethanol produced
in this state.
Section 1. Definitions.
(1) "Applicant" means a cellulosic ethanol
producer that files a tax credit claim as provided by
KRS
141.4244.
(2) "Application" or "Schedule CELL" means
the Schedule CELL, Application, and Credit Certificate of Income Tax/LLET
Credit Cellulosic Ethanol (Revenue Form 41A7220CELL) that is used to make a
cellulosic ethanol tax credit claim with the department for gallons of
cellulo-sic ethanol produced in this state as provided by
KRS
141.4244(3).
(3) "ASTM" means the American Society for
Testing and Materials.
(4)
"Cellulosic ethanol" is defined by
KRS
141.422(6).
(5) "Cellulosic ethanol producer" is defined
by
KRS
141.422(7).
(6) "Corporation" is defined by
KRS
141.010(4).
(7) "Department" is defined by
KRS
141.010(5)
(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 cellulosic
ethanol tax credit authorized by
KRS
141.4244 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) A cellulosic ethanol
producer shall provide proof that the cellulosic ethanol gallons reported on
the application meet ASTM standard specification D4806 for ethanol that is
produced from cellulosic biomass materials.
(2) Proof submitted by a cellulosic ethanol
producer shall be in the form of documentation of laboratory results that
certify that the cellulosic ethanol reported on the Schedule CELL 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 cellulosic ethanol meets the ASTM standard
specification with the Schedule CELL shall result in the department disallowing
the credit.
(5)
(a) A cellulosic ethanol producer shall have
the cellulosic ethanol tested as provided by subsection (2) of this section on
July 1 and December 31 of each calendar year to determine if the cellulosic
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 CELL, 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 cellulosic 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 cellulosic ethanol does not meet the ASTM standard
specification, then all credit claimed for gallons of cellulosic 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 cellulosic
eth-anol 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. 1554;
2043-M; eff. 4-2-2010; 45 Ky.R. 728, 1180; eff.
12-7-2018.
STATUTORY AUTHORITY:
KRS
131.130(1),
141.4246
