103 KAR 15:120. Cellulosic ethanol tax credit.
RELATES TO: KRS 141.010, 141.020, 141.030,
141.040, 141.0401, 141.422, 141.4244, 141.4246, 141.4248
STATUTORY AUTHORITY: KRS 131.130(1),
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), incorporated by reference in 103 KAR 3:040, that is used to make a
cellulosic ethanol tax credit claim with the department for gallons of
cellulosic 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
(7) "Department" is defined by
(8) "Identification number" the
(a) Social Security number for
(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
(10) "Limited liability pass-through
entity" is defined by KRS 141.010(28).
(11) "Pass-through entity" is
defined by KRS 141.010(26).
(12) "Tax credit" means the
cellulosic ethanol tax credit authorized by KRS 141.4244.
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
(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
(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), incorporated by reference in 103 KAR 3:040, to the
partner’s, member’s or shareholder’s tax return on which the credit is claimed.
5. Electronic Filings for Pass-through Entities. (1) Each pass-through entity or
agricultural cooperative association organized under KRS Chapter 272 claiming
the cellulosic 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:
(c) Telephone number;
(d) Identification number; and
(e) Distributive share of the tax credit.
(36 Ky.R. 1554; Am. 2043-M; eff. 4-2-2010.)