{"data":{"id":"us-ky/krs-141.421","jurisdiction":"us-ky","citation":"KRS 141.421","heading":"Tax incentives for alternative fuel, gasification, and renewable energy","body":"facilities.\n(1) As used in this section:\n(a) \"Approved company\" has the same meaning as in KRS 154.27-010;\n(b) \"Eligible project\" has the same meaning as in KRS 154.27-010;\n(c) \"Kentucky gross receipts\" has the same meaning as in KRS 141.0401;\n(d) \"Kentucky gross profits\" has the same meaning as in KRS 141.0401; and\n(e) \"Tax credit\" means the tax credit allowed in KRS 154.27-080.\n(2) An approved company shall compute the inc ome tax credit as provided in this\nsection.\n(3) 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(1) 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 as defined by KRS 141.010 or\ntaxable net income as defined by KRS 141.010, including income from\nthe eligible project;\n2. Compute the limited liability entity tax imposed under KRS 141.0401,\nincluding Kentucky gross profits or Kentucky gross receipts from the\neligible 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 income as defined by KRS 141.010 or\ntaxable net income as defined by KRS 141.010, excluding net income\nattributable to the eligible project;\n2. Using the same meth od used under paragraph (a)2. of this subsection,\ncompute the limited liability entity tax imposed under KRS 141.0401,\nexcluding Kentucky gross profits or Kentucky gross receipts from the\neligible project; and\n3. Add the amounts computed under subparagraph s 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 subsection; however, the credit shall not exceed the limits set\nforth in KRS 154.27-020.\n(4) (a) Notwithstanding any other provisions of this chapter, an appro ved 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 by KRS 141.040 shall be subject to\nincome tax on the net income attributable to an eligible project at the rates\nprovided in KRS 141.020(2).\n(b) The amount of the tax credit shall be determined as provided in subsection (3)\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 shall 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 behal f of the partners, members, shareholders, or\nbeneficiaries.\n(c) The tax credit or estimated payment shall not exceed the limits set forth in\nKRS 154.27-020.\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 shal l not be treated as taxable income subject to Kentucky\nincome tax by the partner, member, shareholder, or beneficiary.\n(5) Notwithstanding any other provisions of this chapter, the net income subject to tax,\ntax credit, and estimated tax payment determined  under subsection (4) of this\nsection shall be excluded in determining each partner's, member's, shareholder's, or\nbeneficiary's distributive share of net income or credit of a pass -through entity or\ntrust.\n(6) (a) Net income attributable to the project fo r the purposes of subsections (3), (4),\nand (5) of this section shall be determined under the separate accounting\nmethod reflecting only the gross income, deductions, expenses, gains, and\nlosses allowed under this chapter directly attributable to the facil ity 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 (3) 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(7) If an approved company can show to the satisfaction of the department that the\nnature of the operations and activities of the approved company are such th at 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\neligible project is located, the approved company shall determine net income,\nKentucky gross receipts, or Kentucky gross profits from the eligible project using an\nalternative method approved by the department.\n(8) The department may promulgate administrative regulations and require the filing of\nforms designed by the department to reflec t the intent of this section and KRS\n154.27-080 and the allowable income tax credit which an approved company may\nretain under this section and KRS 154.27-080.","path":["KRS Chapter 141"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=49200","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:50:35Z","sha256":"78f260f600d07ca21208525527b5caf8e503ddd49aeb20bb0b7b53ab8717b3bf","source_id":"us-ky","stale":false,"prev":"us-ky/krs-141.420","next":"us-ky/krs-141.422"},"notice":"GroundRules: Original legal text. Not legal advice."}