KRS 141.422, 141.4244, 141.4246, 141.4248, 141.425 and 103 KAR 15:120
The tax credit is $1 per cellulosic ethanol gallon produced. The tax credit cap for calendar years beginning after December 31, 2007 is $5,000,000. If the total approved credits exceed the tax credit cap, the credit must be prorated amongst the approved taxpayers. Proration shall be determined by dividing the credit for each separate taxpayer by total eligible credit for all taxpayers then multiplying by the tax credit cap amount. (Separate Taxpayer's Approved Credit /All Taxpayers' Approved Credits) x Tax Credit Cap
Applications must be filed by January 15 following the close of the preceding tax year. The Department of Revenue must notify taxpayers of the amount of their approved credit by April 15th following the close of the preceding calendar year. Also, please note:
- There is no carry forward provision.
- The cellulosic ethanol must be manufactured in Kentucky.
- The cellulosic ethanol must meet current American Society for Testing and Materials specification D4806
- The credit is a nonrefundable credit against taxes imposed by KRS 141.020, KRS 141.040 and/or KRS 141.0401.
Unused Ethanol and/or Cellulosic Ethanol Credit
Any unused tax credit cap balance may be transferred to the other credit to be used for that year. For example, only $2,000,000 of the $5,000,000 Cellulosic Ethanol Credit cap is approved, the remaining $3,000,000 balance can be transferred to the Ethanol tax credit cap.