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

41A720–CI (10–11)

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

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

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

Coal Severance Tax Account Number in Column B and the tons

the Department of Revenue to determine the approved tons of

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

coal purchased.

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

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

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

Kentucky Coal Severance Tax Account Number of the person

if the taxpayer is a wholly owned subsidiary that:

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

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

(a) (i) is an electric power company subject to tax under KRS

the Kentucky coal severance tax on coal purchased from a single

136.120; (ii) is an entity that owns or operates a coal–fired electric

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

generation plant; or (iii) is an alternative fuel facility as defined in

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

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

Kentucky Coal Severance Tax Account Number of the person subject

010 that has not been approved for incentives under Subchapter

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

27 of KRS Chapter 154;

coal purchased in Column C.

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

Part II—Qualifying Tons of Coal Purchased During the Current

141.040 or 141.0401; and

Calendar Year used to Generate Electricity

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

used: (i) for the purpose of generating electricity; or (ii) as feedstock

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

for an alternative fuel facility as defined in KRS 154.27–010 or a

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

gasification facility as defined in KRS 154.27–010.

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

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

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

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

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

coal severance tax on the qualifying coal is not the supplier

the tons of qualifying coal purchased during the base year from

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

the tons of qualifying coal purchased during the prior calendar

Coal Severance Tax Account Number of the person subject to the

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

coal severance tax and the tons of qualifying coal purchased in

tax imposed by KRS 143.020 which is purchased and used to

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

generate electricity or as a feedstock for an alternative fuel facility

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

or a gasification facility as defined in KRS 154.27–010. For entities

separate line for each person subject to the Kentucky coal severance

existing prior to July 14, 2000, the base year amount of qualifying

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

tons of coal is the qualifying tons of coal purchased in the calendar

Coal Severance Tax Account Number of the person subject to the

year 1999. For entities that come into existence after July 14, 2000,

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

the base year amount shall be equal to zero.

purchased in Column C.

Due Date of Schedule—The taxpayer must submit this schedule

Subsequent Year Applications—For applications submitted

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

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

for the prior calendar year.

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

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

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

which will be returned to the taxpayer with Column D completed

by the Department of Revenue with the Coal Incentive Tax Credit

Kentucky Department of Revenue

Certificate for the initial year.

Office of Property Valuation

Division of Minerals Taxation and GIS Services

Maintaining Records—The taxpayer must maintain records

Station 33

reflecting verification of the tons of coal purchased subject to

501 High Street, Fourth Floor

Kentucky coal severance tax imposed by KRS 143.020, including

Frankfort, Kentucky 40601-2103

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

SPECIFIC INSTRuCTIONS

Taxes to Which the Credit Applies—KRS 141.0405 provides that

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

General Information—The taxpayer must complete all information

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

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

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

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

remaining credit shall be applied against the taxes imposed by

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) used to Generate Electricity

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

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

Claiming Credit—Corporations and limited liability pass–through

another corporation that would qualify for a base year amount of

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

zero ($0.00).

taken against corporation income tax is also allowed against the

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.

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

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