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141.438 Endow Kentucky tax credit.

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Page 1 of 2 141.438 Endow Kentucky tax credit. (1) For taxable years beginning on or after January 1, 2011, there is hereby established the Endow Kentucky tax credit. (2) A taxpayer providing an endowment gift to a permanent endowment fund of a qualified community foundation, or county-specific component fund, or affiliate <br>community foundation, which has been certified under KRS 147A.325, and meeting <br>the requirements of subsection (7) of this section, may claim a credit against the <br>taxes imposed by KRS 141.020 or 141.040 and 141.0401. The ordering of the credit <br>shall be as provided in KRS 141.0205. (3) The credit shall be equal to twenty percent (20%) of the value of the endowment gift provided by the taxpayer, not to exceed ten thousand dollars (&#36;10,000). (4) The credit shall be nonrefundable, but any amount of credit that a taxpayer is not able to utilize during a particular taxable year may be carried forward for use in a <br>subsequent taxable year, for a period not to exceed five (5) years. (5) No tax credit claimed under this section may be sold or transferred. If the taxpayer is a pass-through entity not subject to tax under KRS 141.040, the amount of <br>approved credit shall be applied against the tax imposed by KRS 141.0401 at the <br>entity level, and shall also be distributed to each partner, member, or shareholder <br>based on the partner's, member's, or shareholder's distributive share of the income of <br>the pass-through entity. (6) The total amount of tax credit that may be awarded under this section shall be limited to five hundred thousand dollars (&#36;500,000) in each fiscal year. (7) A taxpayer pursuing a tax credit under this section shall: (a) File an application for preliminary authorization of the tax credit with the department; (b) After receiving preliminary authorization from the department, provide an endowment gift to a qualified community foundation, county-specific <br>component fund, or affiliate community foundation which has been certified <br>under KRS 147A.325 within thirty (30) days of the date of the notice of <br>authorization for the tax credit from the department; and (c) Within ten (10) days of making the gift, report to the department proof of the endowment gift. (8) (a) The department shall: 1. Create the application required to be filed by the taxpayer seeking <br>preliminary approval for the tax credit; and 2. Publish on its Web site the amount of total credit allocated to date, the <br>date the last processed application for preliminary approval was <br>received, and the remaining credit available. (b) 1. Upon receipt of an application for preliminary approval submitted under <br>subsection (7) of this section, the department shall review the <br>application and, if approved, the department shall issue a notice of <br>preliminary approval to the requesting taxpayer. Page 2 of 2 2. The notice of preliminary approval shall include the amount of credit, <br>shall notify the taxpayer that the proposed gift must be made within <br>thirty (30) days of the date reflected on the notice of authorization, and <br>that the taxpayer must notify the department that the gift has been made, <br>in the form and format determined by the department, within ten (10) <br>days of making the gift. 3. Upon preliminary approval of an application for credit, the department <br>shall reduce the outstanding available credit cap amount to reflect the <br>preliminary approved credit. (c) Upon timely receipt of notification from a taxpayer preliminarily approved for a credit that the investment has been timely made, the department shall verify the <br>information provided and, if the information is accurate, the department shall issue <br>a final tax credit letter to the taxpayer. (d) If a taxpayer fails to make the required investment or provide proof of the investment to the department within the time frames established by this subsection <br>and subsection (7) of this section, the department shall void the preliminary <br>approval and shall restore the allocated amounts to the tax credit cap. Effective: June 4, 2010 <br>History: Created 2010 (1st Extra. Sess.) Ky. Acts ch. 2, sec. 14, effective June 4, 2010.