The inventory tax credit is a nonrefundable and nontransferable credit that may be applied against income taxes imposed by KRS 141.020 (individual income tax) or KRS 141.040 (corporation income tax) and the limited liability entity tax (LLET) imposed by KRS 141.0401 for any taxpayer that, on or after January 1, 2018, timely pays ad valorem (tangible personal property) taxes on inventory to a taxing jurisdiction in Kentucky. If the taxpayer is a pass-through entity, such as a partnership, S-corporation, or limited liability company, the taxpayer may apply the credit against the LLET and pass the credit through to its members, partners, or shareholders in the same proportion as the distributive share of income or loss is passed through. The taxpayer reports the pass-through amounts on the Kentucky Schedule K-1. Any credit, which is passed through to the members, partners, or shareholders, may be used against individual income tax or corporation income tax and LLET. The credit is nontransferable and nonrefundable. Unused credit amounts cannot be carried forward to later tax years.