Kentucky Statutes 141.418 – Nonrefundable credit for voluntary environmental remediation
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(1) As used in this section:
(a) “Hazardous substances” shall have the meaning provided in KRS § 224.1-400; (b) “Pollutant or contaminant” shall have the meaning provided in KRS § 224.1-
400;
(c) “Petroleum” and “petroleum products” shall have the meaning provided in
KRS § 224.60-115;
(d) “Release” shall have the meaning as provided in either or both KRS § 224.1-400 and KRS § 224.60-115;
(e) “Qualifying voluntary environmental remediation property” means real property subject to the provisions of KRS § 224.1-400, 224.1-405, or 224.60-
135 where the Energy and Environment Cabinet has made a determination that:
1. All releases of hazardous substances, pollutants, contaminants, petroleum, or petroleum products on the property occurred prior to the property owner‘s acquisition of the property;
2. The property owner made all appropriate inquiry into previous ownership and uses of the property in accordance with generally accepted practices;
3. The property owner or a responsible party has provided all legally required notices with respect to hazardous substances, pollutants, contaminants, petroleum, or petroleum products found at the property;
4. The property owner is in compliance with all land use restrictions and does not impede the effectiveness or integrity of any institutional control;
5. The property owner complied with any information request or administrative subpoena under KRS Chapter 224; and
6. The property owner is not affiliated with any person who is potentially liable for the release of hazardous substances, pollutants, contaminants, petroleum, or petroleum products on the property pursuant to KRS
224.1-400, 224.1-405, or 224.60-135, through:
a. Direct or indirect familial relationship;
b. Any contractual, corporate, or financial relationship, excluding relationships created by instruments conveying or financing title or by contracts for sale of goods or services; or
c. Reorganization of a business entity that was potentially liable;
(f) “Expenditures” means payment for work to characterize the extent of contamination and to remediate the contamination at a qualifying voluntary environmental remediation property; and
(g) “Taxpayer” means an individual subject to tax under KRS § 141.020 or a corporation subject to tax under KRS § 141.040.
(2) (a) There shall be allowed a nonrefundable credit against the tax imposed under
KRS § 141.020 or 141.040 for taxable years beginning after December 31,
2004, and against the tax imposed by KRS § 141.0401 for taxable years beginning after December 31, 2006, for taxpayer expenditures made at a qualifying voluntary environmental remediation property in order to correct the effect of a release of hazardous substances, pollutants, contaminants, petroleum, or petroleum products on the property pursuant to KRS § 224.1-400,
224.1-405, or 224.60-135, consistent with a corrective action plan approved by the Energy and Environment Cabinet pursuant to KRS § 224.1-400, 224.1-
405, or 224.60-135, and provided the cleanup was not financed through a public grant program or the petroleum storage tank environmental assurance fund.
(b) The credit allowed under paragraph (a) of this subsection 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.
(3) The maximum total credit for each taxpayer shall not exceed one hundred fifty thousand dollars ($150,000). For purposes of this section, an affiliated group of taxpayers required to file a consolidated return under KRS § 141.200 shall be treated as one (1) taxpayer.
(4) A taxpayer claiming a credit under this section shall submit receipts to the Energy and Environment Cabinet in proof of the expenditures claimed. The Energy and Environment Cabinet shall verify the receipts. After the receipts are verified, the Finance and Administration Cabinet shall notify the taxpayer of eligibility for the credit.
(5) The credit may be first claimed on the income tax return of the taxpayer filed in the taxable year during which the credit was certified. The amount of the allowable credit for any taxable year shall be twenty-five percent (25%) of the maximum credit approved. The credit may be carried forward for ten (10) successive taxable years.
(6) If the taxpayer is a pass-through entity, the taxpayer shall apply the credit against the limited liability entity tax imposed by KRS § 141.0401, and shall also 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.
Effective: July 15, 2010
History: Amended 2010 Ky. Acts ch. 24, sec. 112, effective July 15, 2010. — Amended
2007 Ky. Acts ch. 100, sec. 4, effective June 26, 2007. — Amended 2006 (1st Extra. Sess.) Ky. Acts ch. 2, sec. 32, effective June 28, 2006. — Created 2005 Ky. Acts ch.
168, sec. 140, effective March 18, 2005.
Legislative Research Commission Note (6/28/2006). 2006 (1st Extra Sess.) Ky. Acts ch. 2, sec. 73, provides that “unless a provision of this Act specifically applies to an earlier tax year, the provisions of this Act shall apply to taxable years beginning on or after January 1, 2007.”
Legislative Research Commission Note (3/18/2005). 2005 Ky. Acts ch. 168, sec. 165, provides that this section shall apply to tax years beginning on or after January 1,
2005.
(a) “Hazardous substances” shall have the meaning provided in KRS § 224.1-400; (b) “Pollutant or contaminant” shall have the meaning provided in KRS § 224.1-
Terms Used In Kentucky Statutes 141.418
- Action: includes all proceedings in any court of this state. See Kentucky Statutes 446.010
- Individual: means a natural person. See Kentucky Statutes 141.010
- Owner: when applied to any animal, means any person having a property interest in such animal. See Kentucky Statutes 446.010
- Pass-through entity: means any partnership, S corporation, limited liability company, limited liability partnership, limited partnership, or similar entity recognized by the laws of this state that is not taxed for federal purposes at the entity level, but instead passes to each partner, member, shareholder, or owner their proportionate share of income, deductions, gains, losses, credits, and any other similar attributes. See Kentucky Statutes 141.010
- Person: means "person" as defined in Section 7701(a)(1) of the Internal Revenue
Code. See Kentucky Statutes 141.900 - Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
- Subpoena: A command to a witness to appear and give testimony.
- Taxable year: means the calendar year or fiscal year ending during such calendar year, upon the basis of which net income is computed, and in the case of a return made for a fractional part of a year under the provisions of this chapter or under administrative regulations prescribed by the commissioner, "taxable year" means the period for which the return is made. See Kentucky Statutes 141.010
- Year: means calendar year. See Kentucky Statutes 446.010
400;
(c) “Petroleum” and “petroleum products” shall have the meaning provided in
KRS § 224.60-115;
(d) “Release” shall have the meaning as provided in either or both KRS § 224.1-400 and KRS § 224.60-115;
(e) “Qualifying voluntary environmental remediation property” means real property subject to the provisions of KRS § 224.1-400, 224.1-405, or 224.60-
135 where the Energy and Environment Cabinet has made a determination that:
1. All releases of hazardous substances, pollutants, contaminants, petroleum, or petroleum products on the property occurred prior to the property owner‘s acquisition of the property;
2. The property owner made all appropriate inquiry into previous ownership and uses of the property in accordance with generally accepted practices;
3. The property owner or a responsible party has provided all legally required notices with respect to hazardous substances, pollutants, contaminants, petroleum, or petroleum products found at the property;
4. The property owner is in compliance with all land use restrictions and does not impede the effectiveness or integrity of any institutional control;
5. The property owner complied with any information request or administrative subpoena under KRS Chapter 224; and
6. The property owner is not affiliated with any person who is potentially liable for the release of hazardous substances, pollutants, contaminants, petroleum, or petroleum products on the property pursuant to KRS
224.1-400, 224.1-405, or 224.60-135, through:
a. Direct or indirect familial relationship;
b. Any contractual, corporate, or financial relationship, excluding relationships created by instruments conveying or financing title or by contracts for sale of goods or services; or
c. Reorganization of a business entity that was potentially liable;
(f) “Expenditures” means payment for work to characterize the extent of contamination and to remediate the contamination at a qualifying voluntary environmental remediation property; and
(g) “Taxpayer” means an individual subject to tax under KRS § 141.020 or a corporation subject to tax under KRS § 141.040.
(2) (a) There shall be allowed a nonrefundable credit against the tax imposed under
KRS § 141.020 or 141.040 for taxable years beginning after December 31,
2004, and against the tax imposed by KRS § 141.0401 for taxable years beginning after December 31, 2006, for taxpayer expenditures made at a qualifying voluntary environmental remediation property in order to correct the effect of a release of hazardous substances, pollutants, contaminants, petroleum, or petroleum products on the property pursuant to KRS § 224.1-400,
224.1-405, or 224.60-135, consistent with a corrective action plan approved by the Energy and Environment Cabinet pursuant to KRS § 224.1-400, 224.1-
405, or 224.60-135, and provided the cleanup was not financed through a public grant program or the petroleum storage tank environmental assurance fund.
(b) The credit allowed under paragraph (a) of this subsection 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.
(3) The maximum total credit for each taxpayer shall not exceed one hundred fifty thousand dollars ($150,000). For purposes of this section, an affiliated group of taxpayers required to file a consolidated return under KRS § 141.200 shall be treated as one (1) taxpayer.
(4) A taxpayer claiming a credit under this section shall submit receipts to the Energy and Environment Cabinet in proof of the expenditures claimed. The Energy and Environment Cabinet shall verify the receipts. After the receipts are verified, the Finance and Administration Cabinet shall notify the taxpayer of eligibility for the credit.
(5) The credit may be first claimed on the income tax return of the taxpayer filed in the taxable year during which the credit was certified. The amount of the allowable credit for any taxable year shall be twenty-five percent (25%) of the maximum credit approved. The credit may be carried forward for ten (10) successive taxable years.
(6) If the taxpayer is a pass-through entity, the taxpayer shall apply the credit against the limited liability entity tax imposed by KRS § 141.0401, and shall also 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.
Effective: July 15, 2010
History: Amended 2010 Ky. Acts ch. 24, sec. 112, effective July 15, 2010. — Amended
2007 Ky. Acts ch. 100, sec. 4, effective June 26, 2007. — Amended 2006 (1st Extra. Sess.) Ky. Acts ch. 2, sec. 32, effective June 28, 2006. — Created 2005 Ky. Acts ch.
168, sec. 140, effective March 18, 2005.
Legislative Research Commission Note (6/28/2006). 2006 (1st Extra Sess.) Ky. Acts ch. 2, sec. 73, provides that “unless a provision of this Act specifically applies to an earlier tax year, the provisions of this Act shall apply to taxable years beginning on or after January 1, 2007.”
Legislative Research Commission Note (3/18/2005). 2005 Ky. Acts ch. 168, sec. 165, provides that this section shall apply to tax years beginning on or after January 1,
2005.