KRS § 141.418 — KY Code / Title XI / Chapter 141 / Section 141.418
141.418 Nonrefundable credit for voluntary environmental remediation
Status: in_force

141.418 Nonrefundable credit for voluntary environmental remediation.

(1) As used in this section:

(a) "Hazardous substances" shall have the meaning provided in KRS 224.1-400;

(b) "Pollutant or contaminant" shall have the meaning provided in KRS 224.1-

400;

(c) "Petroleum" and "petroleum products" shall have the meaning provided in

KRS 224.60-115;

(d) "Release" shall have the meaning as provided in either or both KRS 224.1-400

and 224.60-115;

(e) "Qualifying voluntary environmental remediation property" means real

property subject to the provisions of KRS 224.1-400, 224.1-405, or 224.60-

135 where the Energy and Environment Cabinet has made a determination

that:

1. All releases of hazardous substances, pollutants, contaminants,

petroleum, or petroleum products on the property occurred prior to the

property owner's acquisition of the property;

2. The property owner made all appropriate inquiry into previous

ownership and uses of the property in accordance with generally

accepted practices;

3. The property owner or a responsible party has provided all legally

required notices with respect to hazardous substances, pollutants,

contaminants, petroleum, or petroleum products found at the property;

4. The property owner is in compliance with all land use restrictions and

does not impede the effectiveness or integrity of any institutional

control;

5. The property owner complied with any information request or

administrative subpoena under KRS Chapter 224; and

6. The property owner is not affiliated with any person who is potentially

liable for the release of hazardous substances, pollutants, contaminants,

petroleum, or petroleum products on the property pursuant to KRS

224.1-400, 224.1-405, or 224.60-135, through:

a. Direct or indirect familial relationship;

b. Any contractual, corporate, or financial relationship, excluding

relationships created by instruments conveying or financing title or

by contracts for sale of goods or services; or

c. Reorganization of a business entity that was potentially liable;

(f) "Expenditures" means payment for work to characterize the extent of

contamination and to remediate the contamination at a qualifying voluntary

environmental remediation property; and

(g) "Taxpayer" means an individual subject to tax under KRS 141.020 or a

corporation subject to tax under KRS 141.040.

(2) (a) There shall be allowed a nonrefundable credit against the tax imposed under

KRS 141.020 or 141.040 for taxable years beginning after December 31,

2004, and against the tax imposed by KRS 141.0401 for taxable years

beginning after December 31, 2006, for taxpayer expenditures made at a

qualifying voluntary environmental remediation property in order to correct

the effect of a release of hazardous substances, pollutants, contaminants,

petroleum, or petroleum products on the property pursuant to KRS 224.1-400,

224.1-405, or 224.60-135, consistent with a corrective action plan approved

by the Energy and Environment Cabinet pursuant to KRS 224.1-400, 224.1-

405, or 224.60-135, and provided the cleanup was not financed through a

public grant program or the petroleum storage tank environmental assurance

fund.

(b) The credit allowed under paragraph (a) of this subsection shall be applied both

to the income tax imposed under KRS 141.020 or 141.040 and to the limited

liability entity tax imposed under KRS 141.0401, with the ordering of the

credits as provided in KRS 141.0205.

(3) The maximum total credit for each taxpayer shall not exceed one hundred fifty

thousand dollars ($150,000). For purposes of this section, an affiliated group of

taxpayers required to file a consolidated return under KRS 141.200 shall be treated

as one (1) taxpayer.

(4) A taxpayer claiming a credit under this section shall submit receipts to the Energy

and Environment Cabinet in proof of the expenditures claimed. The Energy and

Environment Cabinet shall verify the receipts. After the receipts are verified, the

Finance and Administration Cabinet shall notify the taxpayer of eligibility for the

credit.

(5) The credit may be first claimed on the income tax return of the taxpayer filed in the

taxable year during which the credit was certified. The amount of the allowable

credit for any taxable year shall be twenty-five percent (25%) of the maximum

credit approved. The credit may be carried forward for ten (10) successive taxable

years.

(6) If the taxpayer is a pass-through entity, the taxpayer shall apply the credit against

the limited liability entity tax imposed by KRS 141.0401, and shall also 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.