2016 Kentucky Revised Statutes CHAPTER 141 - INCOME TAXES .389 Nonrefundable and nontransferable distilled spirits ad valorem tax credit -- Credit to be used only for capital improvement at licensed distiller's premises -- Administrative regulations -- Annual report.
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141.389 Nonrefundable and nontransferable distilled spirits ad valorem tax credit - Credit to be used only for capital improvement at licensed distiller's premises
-- Administrative regulations -- Annual report.
(1)
(2)
(3)
(a)
There shall be allowed a nonrefundable and nontransferable credit to each
taxpayer paying the distilled spirits ad valorem tax as follows:
1.
For taxable years beginning on or after January 1, 2015, and before
December 31, 2015, the credit shall be equal to twenty percent (20%) of
the tax assessed under KRS 132.160 and paid under KRS 132.180 on a
timely basis;
2.
For taxable years beginning on or after January 1, 2016, and before
December 31, 2016, the credit shall be equal to forty percent (40%) of
the tax assessed under KRS 132.160 and paid under KRS 132.180 on a
timely basis;
3.
For taxable years beginning on or after January 1, 2017, and before
December 31, 2017, the credit shall be equal to sixty percent (60%) of
the tax assessed under KRS 132.160 and paid under KRS 132.180 on a
timely basis;
4.
For taxable years beginning on or after January 1, 2018, and before
December 31, 2018, the credit shall be equal to eighty percent (80%) of
the tax assessed under KRS 132.160 and paid under KRS 132.180 on a
timely basis; and
5.
For taxable years beginning on or after January 1, 2019, the credit shall
be equal to one hundred percent (100%) of the tax assessed under KRS
132.160 and paid under KRS 132.180 on a timely basis.
(b) The credit 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 the credits as provided in KRS 141.0205.
The amount of distilled spirits credit allowed under subsection (1) of this section
shall be used only for capital improvements at the premises of the distiller licensed
pursuant to KRS Chapter 243. As used in this subsection, "capital improvement"
means any costs associated with:
(a) Construction, replacement, or remodeling of warehouses or facilities;
(b) Purchases of barrels and pallets used for the storage and aging of distilled
spirits in maturing warehouses;
(c) Acquisition, construction, or installation of equipment for the use in the
manufacture, bottling, or shipment of distilled spirits;
(d) Addition or replacement of access roads or parking facilities; and
(e) Construction, replacement, or remodeling of facilities to market or promote
tourism, including but not limited to a visitor's center.
The distilled spirits credit allowed under subsection (1) of this section:
(a) May be accumulated for multiple taxable years;
(b) Shall be claimed on the return of the taxpayer filed for the taxable year during
(4)
(5)
(6)
(7)
which the credits were used pursuant to subsection (2) of this section; and
(c) Shall not include:
1.
Any delinquent tax paid to the Commonwealth; or
2.
Any interest, fees, or penalty paid to the Commonwealth.
(a) Before the distilled spirits credit shall be allowed on any return, the capital
improvements required by subsection (2) of this section shall be completed
and specifically associated with the credit allowed on the return.
(b) The amount of distilled spirits credit allowed shall be recaptured if the capital
improvement associated with the credit is sold or otherwise disposed of prior
to the exhaustion of the useful life of the asset for Kentucky depreciation
purposes.
(c) If the allowed credit is associated with multiple capital improvements, and not
all capital improvements are sold or otherwise disposed of, the distilled spirits
credit shall be prorated based on the cost of the capital improvement sold over
the total cost of all improvements associated with the credit.
If the taxpayer is a pass-through entity, the taxpayer may apply the credit against the
limited liability entity tax imposed by KRS 141.0401, and shall pass the credit
through to its members, partners, or shareholders in the same proportion as the
distributive share of income or loss is passed through.
The department may promulgate an administrative regulation pursuant to KRS
Chapter 13A to implement the allowable credit under this section, require the filing
of forms designed by the department, and require specific information for the
evaluation of the credit taken by any taxpayer.
Notwithstanding KRS 131.190, no later than September 1, 2016, and annually
thereafter, the department shall report to the Interim Joint Committee on
Appropriations and Revenue:
(a) The name of each taxpayer taking the credit permitted by subsection (1) of
this section;
(b) The amount of credit taken by that taxpayer; and
(c) The type of capital improvement made for which the credit is claimed.
Effective: July 15, 2014
History: Created 2014 Ky. Acts ch. 102, sec. 16, effective July 15, 2014.
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