154.20.258 Investor entitled to credit -- Amount -- Carry-forward -- Liabilities -- Transferability -- Notification of Department of Revenue -- Additional credits -- Maximum credits. - Kentucky Statutes

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154.20-258 Investor entitled to credit -- Amount -- Carry-forward -- Liabilities -- Transferability -- Notification of Department of Revenue -- Additional credits -
- Maximum credits. (1) An investor shall be entitled to a nonrefundable credit equal to forty percent (40%) of the investor's proportional ownership share of all qualified investments made by
its investment fund and verified by the authority. The aggregate tax credit available
to any investor shall not exceed forty percent (40%) of the cash contribution made
by the investor to its investment fund. The credit may be applied against:
(a) Both the income tax imposed by KRS 141.020 or 141.040, and the limited liability entity tax imposed by KRS 141.0401, with the ordering of the credits
as provided in KRS 141.0205; (b) The corporation license tax imposed by KRS 136.070;
(c) The insurance taxes imposed by KRS 136.320, 136.330, and 304.3-270; and
(d) The taxes on financial institutions imposed by KRS 136.300, 136.310, and 136.505. (2) The tax credit amount that may be claimed by an investor in any tax year shall not exceed fifty percent (50%) of the initial aggregate credit amount approved by the
authority for the investment fund which would be proportionally available to the
investor. An investor may first claim the credit granted in subsection (1) of this
section in the year following the year in which the credit is granted. (3) If the credit amount that may be claimed in any tax year, as determined under subsections (1) and (2) of this section, exceeds the investor's combined tax
liabilities against which the credit may be claimed for that year, the investor may
carry the excess tax credit forward until the tax credit is used, but the carry-forward
of any excess tax credit shall not increase the fifty percent (50%) limitation
established by subsection (2) of this section. Any tax credits not used within fifteen
(15) years of the approval by the authority of the aggregate tax credit amount
available to the investor shall be lost. (4) The tax credits allowed by this section shall not apply to any liability an investor may have for interest, penalties, past due taxes, or any other additions to the
investor's tax liability. The holder of the tax credit shall assume any and all
liabilities and responsibilities of the credit. (5) The tax credits allowed by this section are not transferable, except that: (a) A nonprofit entity may transfer, for some or no consideration, any or all of the credits it receives under this section and any related benefits, rights,
responsibilities, and liabilities. Within thirty (30) days of the date of any
transfer of credits pursuant to this subsection, the nonprofit entity shall notify
the authority and the Department of Revenue of:
1. The name, address, and Social Security number or employer
identification number, as may be applicable, of the party to which the
nonprofit entity transferred its credits; 2. The amount of credits transferred; and 3. Any additional information the authority or the Department of Revenue
deems necessary. (b) If an investor is an entity and is a party to a merger, acquisition, consolidation, dissolution, liquidation, or similar corporate reorganization, the tax credits
shall pass through to the investor's successor. (c) If an individual investor dies, the tax credits shall pass to the investor's estate or beneficiaries in a manner consistent with the transfer of ownership of the
investor's interest in the investment fund. (6) The tax credit amount that may be claimed by an investor shall reflect only the investor's participation in qualified investments properly reported to the authority by
the investment fund manager. No tax credit authorized by this section shall become
effective until the Department of Revenue receives notification from the authority
that includes:
(a) A statement that a qualified investment has been made that is in compliance with KRS 154.20-250 to 154.20-284 and all applicable regulations; and (b) A list of each investor in the investment fund that owns a portion of the small business in which a qualified investment has been made by virtue of an
investment in the investment fund, and each investor's amount of credit
granted to the investor for each qualified investment. The authority shall, within sixty (60) days of approval of credits, notify the
Department of Revenue of the information required pursuant to this subsection and
notify each investor of the amount of credits granted to that investor, and the year
the credits may first be claimed. (7) After the date on which investors in an investment fund have cumulatively received an amount of credits equal to the amount of credits allocated to the investment fund
by the authority, no investor shall receive additional credits by virtue of its
investment in that investment fund unless the investment fund's allocation of credits
is increased by the authority pursuant to an amended application. (8) The maximum amount of credits to be authorized by the authority shall be three million dollars ($3,000,000) for each of fiscal years 2002-03 and 2003-04. Effective: June 28, 2006
History: Amended 2006 (1st Extra. Sess.) Ky. Acts ch. 2, sec. 42, effective June 28, 2006. -- Amended 2005 Ky. Acts ch. 85, sec. 571, effective June 20, 2005. -- Created
2002 Ky. Acts ch. 230, sec. 20, effective July 15, 2002. 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."