141.428 Kentucky Clean Coal Incentive Act -- Definitions -- Tax credit -- Administrative regulations. - Kentucky Statutes

Download pdf

Loading PDF...

Page 1 of 3 141.428 Kentucky Clean Coal Incentive Act -- Definitions -- Tax credit -- Administrative regulations. (1) As used in this section: (a) "Clean coal facility" means an electric generation facility beginning commercial operation on or after January 1, 2005, at a cost greater than one
hundred fifty million dollars ($150,000,000) that is located in the
Commonwealth of Kentucky and is certified by the Energy and Environment
Cabinet as reducing emissions of pollutants released during generation of
electricity through the use of clean coal equipment and technologies; (b) "Clean coal equipment" means equipment purchased and installed for commercial use in a clean coal facility to aid in reducing the level of
pollutants released during the generation of electricity from eligible coal; (c) "Clean coal technologies" means technologies incorporated for use within a clean coal facility to lower emissions of pollutants released during the
generation of electricity from eligible coal; (d) "Eligible coal" means coal that is subject to the tax imposed under KRS 143.020; (e) "Ton" means a unit of weight equivalent to two thousand (2,000) pounds; and
(f) "Taxpayer" means taxpayer as defined in KRS 131.010(4). (2) Effective for tax years ending on or after December 31, 2006, a nonrefundable, nontransferable credit shall be allowed for:
(a) Any electric power company subject to tax under KRS 136.120 and certified as a clean coal facility or any taxpayer that owns or operates a clean coal
facility and purchases eligible coal that is used by the taxpayer in a certified
clean coal facility; or (b) A parent company of an entity identified in paragraph (a) of this subsection if the subsidiary is wholly owned. (3) (a) The credit may be taken against the taxes imposed by: 1. KRS 136.070; 2. KRS 136.120; or 3. KRS 141.020 or 141.040, and 141.0401. (b) The credit shall not be carried forward and must be used on the tax return filed for the period during which the eligible coal was purchased. The Energy and
Environment Cabinet must approve and certify use of the clean coal
equipment and technologies within a clean coal facility before any taxpayer
may claim the credit. (c) The credit allowed under paragraph (a) of this subsection shall be applied both to the income tax imposed under KRS 141.020 or 141.040 and to the limited
liability entity tax imposed under KRS 141.0401, with the ordering of credits
as provided in KRS 141.0205. Page 2 of 3 (4) The amount of the allowable credit shall be two dollars ($2) per ton of eligible coal purchased that is used to generate electric power at a certified clean coal facility,
except that no credit shall be allowed if the eligible coal has been used to generate a
credit under KRS 141.0405 for the taxpayer, a parent, or a subsidiary. (5) Each taxpayer eligible for the credit provided under subsection (2) of this section shall file a clean coal incentive credit claim on forms prescribed by the Department
of Revenue. At the time of filing for the credit, the taxpayer shall submit an
electronic report verifying the tons of coal subject to the tax imposed by KRS
143.020 purchased for each year in which the credit is claimed. The Department of
Revenue shall determine the amount of the approved credit and issue a credit
certificate to the taxpayer. (6) Corporations and pass-through entities subject to the tax imposed under KRS 141.040 or 141.0401 shall be eligible to apply, subject to the conditions imposed
under this section, the approved credit against its liability for the taxes, in
consecutive order as follows:
(a) The credit shall first be applied against both the tax imposed by KRS 141.0401 and the tax imposed by KRS 141.020 or 141.040, with the ordering
of credits as provided in KRS 141.0205; (b) The credit shall then be applied to the tax imposed by KRS 136.120. The credit shall meet the entirety of the taxpayer's liability under the first tax listed
in consecutive order before applying any remaining credit to the next tax listed. The
taxpayer's total liability under each preceding tax must be fully met before the
remaining credit can be applied to the subsequent tax listed in consecutive order. (7) If the taxpayer is a pass-through entity not subject to tax under KRS 141.040, the amount of approved credit shall be applied against the tax imposed by KRS
141.0401 at the entity level, and shall also be distributed to each partner, member,
or shareholder based on the partner's, member's, or shareholder's distributive share
of the income of the pass-through entity. The credit shall be claimed in the same
manner as specified in subsection (6) of this section. Each pass-through entity shall
notify the Department of Revenue electronically of all partners, members, or
shareholders who may claim any amount of the approved credit. Failure to provide
information to the Department of Revenue in a manner prescribed by regulation
may constitute the forfeiture of available credits to all partners, members, or
shareholders associated with the pass-through entity. (8) The taxpayer shall maintain all records associated with the credit for a period of five (5) years. Acceptable verification of eligible coal purchased shall include invoices
that indicate the tons of eligible coal purchased from a Kentucky supplier of coal
and proof of remittance for that purchase. (9) The Department of Revenue shall develop the forms required under this section, specifying the procedure for claiming the credit, and applying the credit against the
taxpayer's liability in the order provided under subsections (6) and (7) of this
section. Page 3 of 3 (10) The Department for Energy Development and Independence within the Energy and Environment Cabinet and the Department of Revenue shall promulgate
administrative regulations necessary to administer this section. (11) This section shall be known as the Kentucky Clean Coal Incentive Act. Effective: July 15, 2010
History: Amended 2010 Ky. Acts ch. 24, sec. 113, effective July 15, 2010. -- Amended 2007 (2d Extra. Sess.) Ky. Acts ch. 1, sec. 28, effective August 30, 2007. --
Amended 2006 (1st Extra. Sess.) Ky. Acts ch. 2, sec. 35, effective June 28, 2006. --
Created 2005 Ky. Acts ch. 168, sec. 142, effective March 18, 2005. Legislative Research Commission Note (6/28/2006). 2006 (1st Extra Sess.) Ky. Acts ch. 2, sec. 73, provides that "unless a provision of this Act specifically applies to an
earlier tax year, the provisions of this Act shall apply to taxable years beginning on or
after January 1, 2007." Legislative Research Commission Note (3/18/2005). 2005 Ky. Acts ch. 168, sec. 165, provides that this section shall apply to tax years beginning on or after January 1,
2005.