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41A720BIO (10–11)

Page 2

INSTRUCTIONS FOR SCHEDULE BIO

Commonwealth of Kentucky

DEPARTMENT OF REVENUE

The biodiesel tax credit is applied against the individual income tax imposed by KRS 141.020, 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 claimed against the corporation income tax and LLET can be different.

Purpose of Schedule—The application and credit

Part I—Gallons Produced and/or Blended in Kentucky

certification schedule is to report the number of gallons of

During the Calendar Year

biodiesel produced and/or B100 blended and renewable

Line 1—Enter the number of gallons of B100 biodiesel

diesel produced in this state meeting the current ASTM

produced in this state for the calendar year.

standards. Re–blending of blended biodiesel does not

qualify for this credit. The Department of Revenue will

Line 2—Enter the number of gallons of B100 biodiesel

certify the amount of biodiesel credit for each taxpayer.

used in the blended biodiesel produced in this state for

It is effective for biodiesel produced and/or blended and

the calendar year. Re-blending of blended biodiesel does

renewable diesel produced on or after January 1, 2008.

not qualify for this credit.

The taxpayer is not entitled to the credit for biodiesel

produced and/or blended and renewable diesel produced

Line 3—Enter the number of gallons of renewable diesel

in another state.

produced in this state for the calendar year.

The credit rate is $1 per gallon with a total cap for all

Part II and Part III

taxpayers not to exceed $10,000,000 annually. There is

no carryforward for any unused credit.

These parts are completed by the Department of Revenue

to determine the biodiesel credit for each taxpayer. Part

To ensure proper processing, fax or email Schedule BIO

III is used if the total amount of approved credit for all

to the Department of Revenue no later than January

biodiesel producers and blenders and renewable diesel

15 following the close of the preceding calendar year.

producers exceeds the annual biodiesel tax credit cap.

Schedules postmarked or sent after January 15 are void.

Credit certification cannot be guaranteed for schedules

Part II—Biodiesel Gallons Approved

sent through regular mail.

Line 1—This is the amount of biodiesel and renewable

Fax number: (502) 564–0058

diesel gallons approved by the Department of Revenue

for credit. If the approved credit exceeds the biodiesel

Email address:

tax credit cap, then the credit is determined by the

KRC.WEBResponseEconomicDevelopmentCredits@

department in Part III. It is a nonrefundable credit.

ky.gov

If the biodiesel producer or blender or renewable diesel

The Department of Revenue will confirm the receipt of the

producer is a pass-through entity, report the pro rata share

application. If you do not receive confirmation within two

of the approved credit on Schedule(s) K–1. In the case of

weeks of submitting the application, contact the Division

an entity that has a fiscal year end, the approved credit

of Corporation Tax at (502) 564-8139.

shall be claimed on the return filed for the first fiscal year

ending after the close of the preceding calendar year.

The Department of Revenue will issue the credit certificate,

listing the amount of credit available, by April 15 following

Part III—Biodiesel Approved Credit Certificate

the close of the preceding calendar year. Attach the credit

certificate to the tax return claiming the credit.

The Department of Revenue determines the total

approved credit. If it exceeds the biodiesel tax credit

General Instructions—For the calendar year, enter the

cap of $10,000,000, the department will compute each

applicable year.

taxpayer’s approved credit based upon a fraction the

numerator (Line 1(a)) being the credit approved for the

Check the appropriate entity type. If taxed as an entity

taxpayer and the denominator (Line 1(b)) being the

type other than corporation, limited liability pass–through

total credit approved for all taxpayers. The biodiesel tax

entity, general partnership or individual, check the

credit cap is multiplied by this fraction to determine each

“Other” box and list the entity type.

producer’s and/or blender’s approved credit.

Federal Identification Number—For an individual, enter

Part IV—Biodiesel Credit Used By Taxpayer

the Social Security number; for a general partnership,

estate or trust, enter the FEIN.

Line 1—Enter the amount of credit claimed for the taxable

year against the LLET on Schedule TCS, Part II, Column

Testing—The regulation 103 KAR 15:140 provides that a

E. The credit amount cannot reduce the LLET below the

copy of the laboratory results for July 1 and December 31

$175 minimum.

of each calendar year shall be attached to the application,

Schedule BIO, submitted to the Department of Revenue.

Line 2—Enter the amount of credit claimed for the taxable

Failure to provide proof of meeting the ASTM standard

year against the corporation income tax on Schedule TCS,

on July 1 and December 31 of each calendar year with

Part II, Column F .

the application shall result in the denial of the credit

for gallons of biodiesel or renewable diesel back to the

Line 3—Enter the amount of credit claimed for the taxable

previous testing date of July 1 or December 31.

year on Form 740, 740–NP or 741.

Schedule Bio (Form 41a720bio) - Application And Credit Certificate Of Income Tax/llet Credit Biodiesel Page 2

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