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Distilled Spirits Tax Credit – KRS 141.389

 

  • This is a nonrefundable and nontransferable credit that may be claimed by income taxpayers who pay Kentucky property tax on distilled spirits.

     
  • The credit amount is equal to:
  • 20 percent of the property tax assessed and timely paid for taxable years beginning on or after Jan. 1, 2015;
  • 40 percent of the property tax assessed and timely paid for taxable years beginning on or after Jan. 1, 2016;
  • 60 percent of the property tax assessed and timely paid for taxable years beginning on or after Jan. 1, 2017;
  • 80 percent of the property tax assessed and timely paid for taxable years beginning on or after Jan. 1, 2018; and
  • 100 percent of the property tax assessed and timely paid for taxable years beginning on or after Jan. 1, 2019.

     
  • The credit cannot be computed using delinquent taxes, interest, fees, or penalties paid to Kentucky.

     
  • The amount of credit is contingent on the costs associated with the following capital improvements at the premises of the distiller:
    • construction, replacement, or remodeling of warehouses or facilities;
    • purchases of barrels and pallets used for the storage and aging of distilled spirits in maturing warehouses;
    • acquisition, construction, or installation of equipment for the use in the manufacture, bottling, or shipment of distilled spirits;
    • addition or replacement of access roads or parking facilities; and
    • construction, replacement, or remodeling of facilities to market or promote tourism, including but not limited to a visitor's center.

       
  • There is a recapture provision of the capital improvement associated with the credit is sold or otherwise disposed of prior to the exhaustion of the useful life of the asset for Kentucky depreciation purposes.

     

    Use forms: Schedule DS and Schedule DS-R

The Kentucky Department of Revenue conducts work
under the authority of the Finance and Administration Cabinet.