Form 41a720-S53 - Schedule Kbi - Tax Credit Computation Schedule

41A720–S53 (10–16)

Page 2

Commonwealth of Kentucky

DEPARTMENT OF REVENUE

INSTRUCTIONS—SCHEDULE KBI

The KBI tax credit is applied against the corporation income tax imposed by KRS 141.040 and/or the limited liability entity tax

(LLET) imposed by KRS 141.0401. The amount of tax credit against each tax can be different; however, for tracking purposes, the

maximum amount of credit used against either tax is the amount that is used for the tax year.

Bluegrass State Skills Corporation. A corporation approved

PURPOSE OF SCHEDULE—This schedule is used by a

for the Kentucky Small Business Tax Credit Program (KSBTC)

corporation which has entered into an agreement for

must attach a copy of the certification from the Kentucky

a Kentucky Business Investment Program (KBI) project

to determine the credit allowed against the Kentucky

Economic Development Finance Authority.

corporation income tax liability and LLET attributable to the

project in accordance with KRS 141.415.

Alternative Methods — In accordance with KRS 141.415(8),

if the approved company can show that the nature of the

operations and activities of the approved company are such

GENERAL INSTRUCTIONS

that it is not practical to use separate accounting to determine

Part I—Computation of LLET Excluding KBI Project

net income, Kentucky gross receipts or Kentucky gross profits

from the facility at which the project is located, the approved

Line 2—Using Schedule LLET, create a new Schedule LLET to

company shall determine net income, Kentucky gross receipts

compute the LLET of the KBI project using only the Kentucky

or Kentucky gross profits attributable to the project using an

gross receipts and Kentucky gross profits of the project. Enter

alternative method approved by the Department of Revenue.

“KBI” at the top center of the Schedule LLET and attach it to

Thus, if any method other than separate accounting is used, a

the tax return.

copy of the letter from the Department of Revenue approving

the alternative method must be attached to this schedule.

If the corporation has operations other than the KBI project,

* In accordance with KRS 141.415(6)(a), if the project is a

it must attach schedules reflecting the computation of

totally separate facility, net income attributable to the

Kentucky gross profits and Kentucky gross receipts from the

project shall be determined by the separate accounting

KBI project in accordance with KRS 141.415(6)(b)** or KRS

method.

141.415(7)(b).****

** In accordance with KRS 141.415(6)(b), if the project is

Part II—Computation of Taxable Net Income Excluding Net

a totally separate facility, Kentucky gross receipts or

Income from KBI Project and KBI Tax Credit

Kentucky gross profits attributable to the project shall

be determined under the separate accounting method

Section B

reflecting only the Kentucky gross receipts or Kentucky

gross profits directly attributable to the facility.

Line 2—Enter net income from the KBI project. If the

corporation’s only operation in Kentucky is the KBI project,

*** In accordance with KRS 141.415(7)(a), if the KBI project

the amount entered on Line 1 must be entered on Line 2. If

is an expansion to a previously existing facility, net

the corporation has operations other than the KBI project,

income attributable to the entire facility shall be

it must attach schedules reflecting the computation of the

determined under the separate accounting method and

net income from the KBI project in accordance with KRS

the net income attributable to the KBI project shall be

141.415(6)(a)* or KRS 141.415(7)(a).***

determined by apportioning the separate accounting

See form for computation.

net income of the entire facility to the KBI project

income using a formula approved by the Department

of Revenue. A copy of the letter from the Department

Part III—Limitation

of Revenue approving the formula must be attached

Calculate KBI tax credit based on the corporation’s tax

to this schedule.

liability, tax liability attributable to KBI project, and balance of

approved costs from Schedule KBI-T. Enter credit on Schedule

**** In accordance with KRS 141.415(7)(b), if the KBI project is

TCS, Part I, Column E and Column F .

an expansion to a previously existing facility, Kentucky

gross receipts or Kentucky gross profits attributable to

A corporation with more than one economic development

the entire facility shall be determined under the separate

project must separately compute the tax credit derived

accounting method and the Kentucky gross receipts or

from each project. Complete an applicable tax computation

Kentucky gross profits attributable to the KBI project

shall be determined by apportioning the separate

schedule (Schedule KREDA, Schedule KIDA, Schedule KEOZ,

accounting Kentucky gross receipts or Kentucky gross

Schedule KJRA, Schedule KIRA, Schedule KJDA, Schedule

profits of the entire facility to the KBI project Kentucky

KBI, Schedule KRA or Schedule IEIA) for each project. A

gross receipts or Kentucky gross profits. A copy of the

corporation approved for the Skills Training Investment Credit

letter from the Department of Revenue approving the

Act (STICA) or Metropolitan College Consortium Tax Credit

formula must be attached to this schedule.

(MCC) must attach a copy of the certification(s) from the

Form 41a720-S53 - Schedule Kbi - Tax Credit Computation Schedule - 2016 Page 2

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