Schedule Ci (Form 41a720-Ci) - Application For Coal Incentive Tax Credit (Page 2 of 2) in pdf

41A720–CI (10–12)

Page 2

INSTRuCTIONS FOR SCHEDulE CI

Commonwealth of Kentucky

DEPARTMENT OF REvENuE

The Coal Incentive Tax Credit is applied against the individual income tax imposed by KRS 141.020, the corporation income tax imposed by

KRS 141.040, the limited liability entity tax (LLET) imposed by KRS 141.0401 and the public service corporation property tax (state portion

only) imposed by KRS 136.120. The amount of credit claimed against the corporation income tax and the LLET can be different.

Purpose of Schedule—This schedule is used by taxpayers to apply

the supplier listed in Column A, enter in Column B the name and

for the coal incentive tax credit provided by KRS 141.0405 and by

Kentucky Coal Severance Tax Account Number of the person

the Department of Revenue to determine the approved tons of

subject to the coal severance tax and the tons of qualifying coal

coal purchased.

purchased in Column C. If more than one person was subject to

the Kentucky coal severance tax on coal purchased from a single

Who is Entitled to the Tax Credit —A taxpayer or a parent company

supplier, use a separate line for each person subject to the Kentucky

if the taxpayer is a wholly owned subsidiary that:

coal severance tax and list the supplier in Column A, the name

and Kentucky Coal Severance Tax Account Number of the person

(a) is an alternative fuel facility as defined in KRS 154.27–010 or

subject to the coal severance tax in Column B, and the tons of

a gasification facility as defined in KRS 154.27–010 that has not

qualifying coal purchased in Column C.

been approved for incentives under Subchapter 27 of KRS Chapter

154;

Part II—Qualifying Tons of Coal Purchased During the Current

Calendar Year

(b) remits tax to the Commonwealth under KRS 136.120, 141.020,

141.040 or 141.0401; and

Company Filing Schedule—Enter in Column A the name of each

supplier from whom the coal was purchased. If the supplier listed

in Column A is the person subject to the coal severance tax on

that is used as feedstock for an alternative fuel facility as defined

the qualifying coal, enter the supplier’s Kentucky Coal Severance

in KRS 154.27–010 or a gasification facility as defined in KRS

Tax Account Number in Column B and the tons of qualifying coal

154.27–010.

purchased in Column C. If the person subject to the Kentucky

Amount of Credit—The credit is equal to $2 for each incentive

coal severance tax on the qualifying coal is not the supplier listed

ton of coal. Incentive tons of coal are calculated by subtracting

in Column A, enter in Column B the name and Kentucky Coal

the tons of qualifying coal purchased during the base year from

Severance Tax Account Number of the person subject to the

the tons of qualifying coal purchased during the prior calendar

coal severance tax and the tons of qualifying coal purchased in

year. “Qualifying coal” means coal subject to the coal severance

Column C. If more than one person was subject to the Kentucky

tax imposed by KRS 143.020 which is purchased and used as a

coal severance tax on coal purchased from a single supplier, use a

feedstock for an alternative fuel facility or a gasification facility

separate line for each person subject to the Kentucky coal severance

as defined in KRS 154.27–010. For entities existing prior to July

tax and list the supplier in Column A, the name and Kentucky

14, 2000, the base year amount of qualifying tons of coal is the

Coal Severance Tax Account Number of the person subject to the

qualifying tons of coal purchased in the calendar year 1999. For

coal severance tax in Column B, and the tons of qualifying coal

entities that come into existence after July 14, 2000, the base year

purchased in Column C.

amount shall be equal to zero.

Subsequent Year Applications—For applications submitted

Due Date of Schedule—The taxpayer must submit this schedule

for years after the taxpayer’s initial year of application, it is not

by March 15 of each year to apply for the credit on coal purchases

necessary to complete Part I. In lieu of completing Part I the

for the prior calendar year.

taxpayer should attach a copy of the initial year’s application

which will be returned to the taxpayer with Column D completed

Where to Submit Schedule—This schedule should be submitted to:

by the Department of Revenue with the Coal Incentive Tax Credit

Certificate for the initial year.

Kentucky Department of Revenue

Office of Property Valuation

Maintaining Records—The taxpayer must maintain records

Division of Minerals Taxation and GIS Services

reflecting verification of the tons of coal purchased subject to

Station 33

Kentucky coal severance tax imposed by KRS 143.020, including

501 High Street, Fourth Floor

invoices and proof of payments, for a period of five years.

Frankfort, Kentucky 40601-2103

Taxes to which the Credit Applies—KRS 141.0405 provides that

SPECIFIC INSTRuCTIONS

this credit shall first be applied against both the taxes imposed by

KRS 141.020 or KRS 141.040 and the tax imposed by KRS 141.0401,

General Information—The taxpayer must complete all information

with the ordering of credits as provided in KRS 141.0205. Any

in the name and address portion of this schedule. If the entity type

remaining credit shall be applied against the taxes imposed by

is not listed, check “Other” and list the entity type.

KRS 136.120.

Part I—Qualifying Tons of Coal Purchased During the Base Year

The credit shall meet the entirety of the taxpayer’s liability under the

(Calendar Year 1999)

first tax listed in consecutive order before applying any remaining

Company that Came into Existence after July 14, 2000—If the

credit to the next tax listed in consecutive order. The taxpayer’s

company came into existence after July 14, 2000, enter a statement

total liability under each preceding tax must be fully met before

to that effect in Columns A and B, and enter zero ($0.00) in Column

the remaining credit can be applied to the subsequent tax listed

C. Attach sufficient information to the application to verify the

in consecutive order.

date the company came into existence. A company created on

Claiming Credit—Corporations and limited liability pass–through

or before July 14, 2000, cannot create an affiliate, subsidiary or

entities are entitled to take this credit against the LLET. The credit

another corporation that would qualify for a base year amount of

taken against corporation income tax is also allowed against the

zero ($0.00).

LLET even though the credit is taken against the income tax. The

Company in Existence on July 14, 2000—If the company was

credit claimed may be different because of limitations.

in existence on or before July 14, 2000, enter in Column A the

name of each supplier from whom the coal was purchased. If

The credit amount cannot reduce the LLET below the $175

the supplier listed in Column A is the person subject to the coal

minimum.

severance tax on the qualifying coal, enter the supplier’s Kentucky

A pass-through entity shall include on each Schedule K-1 the

Coal Severance Tax Account Number in Column B and the tons

partner’s, member’s or shareholder’s pro rata share of the approved

of qualifying coal purchased in Column C. If the person subject

credit.

to the Kentucky coal severance tax on the qualifying coal is not

Schedule Ci (Form 41a720-Ci) - Application For Coal Incentive Tax Credit Page 2

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