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41A720CELL (10–11)

Page 2

Commonwealth of Kentucky

INSTRUCTIONS FOR SCHEDULE CELL

DEPARTMENT OF REVENUE

The cellulosic ethanol 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 certification

Part I—Gallons Produced in Kentucky During the Calendar

schedule is to report the number of gallons of cellulosic

Year

ethanol produced in this state meeting the current ASTM

Line 1—Enter the number of gallons of cellulosic ethanol

standards. The Department of Revenue will certify the

produced in this state for the calendar year.

amount of cellulosic ethanol credit for each taxpayer. It

is effective for cellulosic ethanol produced on or after

Part II and Part III

January 1, 2008. The taxpayer is not entitled to the credit

for cellulosic ethanol produced in another state.

These parts are completed by the Department of Revenue

to determine the cellulosic ethanol credit for each taxpayer.

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

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

taxpayers not to exceed $5,000,000 annually, except the

cellulosic ethanol producers exceeds the annual cellulosic

cellulosic ethanol tax credit cap shall be increased by the

ethanol tax credit cap.

unused cap of the ethanol tax credit. See Part III instructions

for further explanation. There is no carryforward for any

Part II—Cellulosic Ethanol Gallons Approved

unused credit.

Line 1—This is the amount of cellulosic ethanol gallons

To ensure proper processing, fax or email Schedule CELL

approved by the Department of Revenue for credit. If the

to the Department of Revenue no later than January

approved credit exceeds the cellulosic ethanol tax credit cap,

15 following the close of the preceding calendar year.

then the credit is determined by the department in Part III.

Schedules postmarked or sent after January 15 are void.

It is a nonrefundable credit.

Credit certification cannot be guaranteed for schedules sent

through regular mail.

If the cellulosic ethanol producer is a pass-through

entity, report the pro rata share of the approved credit on

Fax number: (502) 564-0058

Schedule(s) K–1. In the case of an entity that has a fiscal

year end, the approved credit shall be claimed on the return

Email address:

filed for the first fiscal year ending after the close of the

KRC.WEBResponseEconomicDevelopmentCredits@

preceding calendar year.

ky.gov

Part III—Cellulosic Ethanol Approved Credit Certificate

The Department of Revenue will confirm the receipt of the

The Department of Revenue determines the total approved

application. If you do not receive confirmation within two

credit. If it exceeds the cellulosic ethanol tax credit cap of

weeks of submitting the application, contact the Division of

$5,000,000, the department will compute each taxpayer’s

Corporation Tax at (502) 564-8139.

approved credit based upon a fraction the numerator (Line

1(a)) being the credit approved for the taxpayer and the

The Department of Revenue will issue the credit certificate,

denominator (Line 1(b)) being the total credit approved

listing the amount of credit available, by April 15 following

for all taxpayers. The cellulosic ethanol tax credit cap is

the close of the preceding calendar year. Attach the credit

multiplied by this fraction to determine each producer’s

certificate to the tax return claiming the credit.

approved credit.

General Instructions—For the calendar year, enter the

The annual cellulosic ethanol tax credit cap of $5,000,000 will

applicable year.

be increased by the unused cap of the ethanol tax credit if

the total approved applications for the cellulosic ethanol tax

Check the appropriate entity type. If taxed as an entity type

credit exceeds its $5,000,000 cap. The amount of credit cap

other than corporation, limited liability pass-through entity,

transferred to the cellulosic ethanol tax credit shall not exceed

general partnership or individual, check the “Other” box

the amount necessary for all applicants to receive the one

and list the entity type.

dollar ($1) per gallon credit provided by KRS 141.4244.

Federal Identification Number—For an individual, enter the

Part IV—Cellulosic Ethanol Credit Used by Taxpayer

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 E.

Testing—The regulation 103 KAR 15:120 provides that a

The credit amount cannot reduce the LLET below the $175

copy of the laboratory results for July 1 and December 31

minimum.

of each calendar year shall be attached to the application,

Schedule CELL, 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 the

Part II, Column F .

application shall result in the denial of the credit for gallons

of cellulosic ethanol back to the previous testing date of July

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

1 or December 31.

year on Form 740, 740–NP or 741.

Schedule Cell (Form 41a720cell) - Application And Credit Certificate Of Income Tax/llet Credit Cellulosic Ethanol Page 2

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