KRS 154.32-070: Tax credits for economic development project by approved company.

(1) For taxable years beginning after December 31, 2009, an approved company may

be eligible for a credit of up to one hundred percent (100%) of the Kentucky

income tax imposed under KRS 141.020 or 141.040, and the limited liability entity

tax imposed under KRS 141.0401, that would otherwise be owed by the approved

company to the Commonwealth for the approved company's taxable year, on the

income, Kentucky gross profits, or Ken tucky gross receipts of the approved

company generated by or arising from the economic development project.

(2) The credit allowed the approved company shall be applied against both the income

tax imposed by KRS 141.020 or 141.040, and the limited liabilit y entity tax

imposed by KRS 141.0401, with credit ordering as provided in KRS 141.0205, for

the taxable year for which the tax return of the approved company is filed, subject

to the annual maximum set forth in the tax incentive agreement. Any credit not used

in the year in which it was first available may be carried forward to subsequent

years, provided that no credit may be carried forward beyond the term of the tax

incentive agreement.

(3) The approved company shall not be required to pay estimated tax p ayments under

KRS 141.044 on the Kentucky taxable income, Kentucky gross receipts, or

Kentucky gross profits generated by or arising from the eligible project.

(4) The credit provided by this section shall be determined as provided in KRS

141.415.

(5) The amount of incentives allowed under subsections (1) to (4) of this section shall

not exceed the lesser of the tax liability of the approved company related to the

economic development project for that year or the annual maximum approved costs

set forth in the tax incentive agreement in any year. The incentives shall be allowed

for each fiscal year of the approved company during the term of the tax incentive

agreement for which a tax return is filed by the approved company.

(6) (a) An approved company receiving preliminary approval after July 1, 2026, may

receive, in addition to the inducements provided under subsections (1) to (4)

of this section, a credit as provided under KRS 141.399 in an amount up to:

1. Two and one -quarter percent (2.25%) of the wages pa id to full -time

employees who are subject to the tax imposed by KRS 141.020 and

maintained at an economic development project located in a heritage

county; and

2. One and one -quarter percent (1.25%) of the wages paid to full -time

employees who are subject to the tax imposed by KRS 141.020 and

maintained at an economic development project located in any other

county.

(b) The cumulative credits awarded:

1. To an approved company under this subsection for any year of the

agreement shall not exceed the annual maximum approved costs of the

economic development project as provided in the tax incentive

agreement; and

2. Shall not exceed four million dollars ($4,0 00,000) per taxable year, of

which no more than one million dollars ($1,000,000) shall be allowed

for wages paid to full -time employees in counties other than heritage

counties.