{"data":{"id":"us-ky/krs-141.403","jurisdiction":"us-ky","citation":"KRS 141.403","heading":"Tax credit for company approved on or before June 30, 2021, under KRS","body":"154.26-010 to 154.26-100 -- Administrative regulations.\n(1) If an eligible company has not yet received preliminary approval on or before June\n30, 2021, the eligible comp any shall not receive final approval by the authority to\nbecome an approved company and receive tax credits under Subchapter 26 of KRS\nChapter 154. Approved companies and outstanding eligible companies with\npreliminary approval granted on or before June 30 , 2021, shall continue to be\ngoverned by Subchapter 26 of KRS Chapter 154 and this section.\n(2) As used in this section, unless the context requires otherwise:\n(a) \"Approved company\" has the same meaning as  in KRS 154.26-010;\n(b) \"Economic revitalization project\" has the same meaning as in KRS 154.26 -\n010;\n(c) \"Eligible company\" has the same meaning as in KRS 154.26-010;\n(d) \"Final approval\" has the same meaning as in KRS 154.26-010;\n(e) \"Kentucky gross receipts\" has the same meaning as in KRS 141.0401; and\n(f) \"Kentucky gross profits\" has the same meaning as in KRS 141.0401\n(g) \"Preliminary approval\" has the same meaning as in KRS 154.26-010; and\n(h) \"Tax credit\" means the tax credit allowed in KRS 154.26-090.\n(3) An approved company shall determine the inc ome tax credit as provided in this\nsection.\n(4) An approved company which is an individual sole proprietorship subject to tax\nunder KRS 141.020 or a corporation or pass -through entity treated as a corporation\nfor federal income tax purposes subject to tax under KRS 141.040 shall:\n(a) 1. Compute the tax due at the applicable tax rates as provided by KRS\n141.020 or 141.040 on net income or taxable net income, including\nincome from the economic revitalization project;\n2. Compute the limited liability entity tax imposed under KRS 141.0401,\nincluding Kentucky gross profits or Kentucky gross receipts from the\neconomic revitalization project; and\n3. Add the amounts computed under subparagraphs 1. and 2. of this\nparagraph and, if applicable, subtract the credit permitted by KRS\n141.0401(3) from that sum. The resulting amount shall be the net tax for\npurposes of this paragraph.\n(b) 1. Compute the tax due at the applicable tax rates as provided by KRS\n141.020 or 141.040 on net inc ome or taxable net income, excluding net\nincome attributable to the economic revitalization project;\n2. Using the same method used under subparagraph 2. of paragraph (a) of\nthis subsection, compute the limited liability entity tax imposed under\nKRS 141.040 1, excluding Kentucky gross profits or Kentucky gross\nreceipts from the economic revitalization project; and\n3. Add the amounts computed under subparagraphs 1. and 2. of this\nparagraph and, if applicable, subtract the credit permitted by KRS\n141.0401(3) from that sum. The resulting amount shall be the net tax for\npurposes of this paragraph.\n(c) The tax credit shall be the amount by which the net tax computed under\nparagraph (a)3. of this subsection exceeds the tax computed under paragraph\n(b)3. of this subs ection; however, the credit shall not exceed the limits set\nforth in KRS 154.26-090.\n(5) (a) Notwithstanding any other provisions of this chapter, an approved company\nwhich is a pass-through entity not subject to the tax imposed by KRS 141.040\nor trust not subject to the tax imposed KRS 141.040 shall be subject to income\ntax on the net income attributable to an economic revitalization project at the\nrates provided in KRS 141.020.\n(b) The amount of the tax credit shall be determined as provided in subsection  (4)\nof this section. Upon the annual election of the approved company, in lieu of\nthe tax credit, an amount shall be applied as an estimated tax payment equal to\nthe tax computed in this section. Any estimated tax payment made pursuant to\nthis paragraph s hall be in satisfaction of the tax liability of the partners,\nmembers, shareholders, or beneficiaries of the pass-through entity or trust, and\nshall be paid on behalf of the partners, members, shareholders, or\nbeneficiaries.\n(c) The tax credit or estimated  payment shall not exceed the limits set forth in\nKRS 154.26-090.\n(d) If the tax computed in this section exceeds the tax credit, the difference shall\nbe paid by the pass -through entity or trust at the times provided by KRS\n141.160 for filing the returns.\n(e) Any estimated tax payment made by the pass -through entity or trust in\nsatisfaction of the tax liability of partners, members, shareholders, or\nbeneficiaries shall not be treated as taxable income subject to Kentucky\nincome tax by the partner, member, shareholder, or beneficiary.\n(6) Notwithstanding any other provisions of this chapter, the net income subject to tax,\nthe tax credit, and the estimated tax payment determined under subsection (5) of\nthis section shall be excluded in determining each partner 's, member's,\nshareholder's, or beneficiary's distributive share of net income or credit of a pass -\nthrough entity or trust.\n(7) If the economic revitalization project is a totally separate facility:\n(a) Net income attributable to the project for the purpos es of subsections (4), (5),\nand (6) of this section shall be determined under the separate accounting\nmethod reflecting only the gross income, deductions, expenses, gains, and\nlosses allowed under KRS Chapter 141 directly attributable to the facility and\noverhead expenses apportioned to the facility; and\n(b) Kentucky gross receipts or Kentucky gross profits attributable to the project\nfor purposes of subsection (4) of this section shall be determined under the\nseparate accounting method reflecting only the Kentucky gross receipts or\nKentucky gross profits directly attributable to the facility.\n(8) If the economic revitalization project is an expansion to a previously existing\nfacility:\n(a) Net income attributable to the entire facility shall be determined un der the\nseparate accounting method reflecting only the gross income, deductions,\nexpenses, gains, and losses allowed under KRS Chapter 141 directly\nattributable to the facility and overhead expenses apportioned to the facility,\nand the net income attributa ble to the economic revitalization project for the\npurposes of subsections (4), (5), and (6) of this section shall be determined by\napportioning the separate accounting net income of the entire facility to the\neconomic revitalization project by a formula approved by the department; and\n(b) Kentucky gross receipts or Kentucky gross profits attributable to the entire\nfacility shall be determined under the separate accounting method reflecting\nonly the Kentucky gross receipts or Kentucky gross profits directly\nattributable to the facility. Kentucky gross receipts or Kentucky gross profits\nattributable to the economic revitalization project for purposes of subsection\n(4) of this section shall be determined by apportioning the separate accounting\nKentucky gross receipts or Kentucky gross profits of the entire facility to the\neconomic revitalization project pursuant to a formula approved by the\ndepartment.\n(9) If an approved company can show to the satisfaction of the department that the\nnature of the operations an d activities of the approved company are such that it is\nnot practical to use the separate accounting method to determine the net income,\nKentucky gross receipts, or Kentucky gross profits from the facility at which the\neconomic revitalization project is l ocated, the approved company shall determine\nnet income, Kentucky gross receipts, or Kentucky gross profits from the economic\nrevitalization project using an alternative method approved by the department.\n(10) The department may issue administrative regulations and require the filing of forms\ndesigned by the department to reflect the intent of KRS 154.26 -010 to 154.26 -100\nand the allowable income tax credit which an approved company may retain under\nKRS 154.26-010 to 154.26-100.","path":["KRS Chapter 141"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=51536","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:50:35Z","sha256":"3e0968e728b0857ebbfda71dc3bf1c0eec6aeea4fdda027ae74cdffd3a09fd5e","source_id":"us-ky","stale":false,"prev":"us-ky/krs-141.402","next":"us-ky/krs-141.405"},"notice":"GroundRules: Original legal text. Not legal advice."}