KRS § 141.438 — KY Code / Title XI / Chapter 141 / Section 141.438
141.438 Endow Kentucky tax credit
Status: in_force

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

community foundation, which has been certified under KRS 147A.325, and meeting

the requirements of subsection (7) of this section, may claim a credit against the

taxes imposed by KRS 141.020 or 141.040 and 141.0401. The ordering of the credit

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 ($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

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

approved credit shall be applied against the tax imposed by KRS 141.0401 at the

entity level, and shall also be distributed to each partner, member, or shareholder

based on the partner's, member's, or shareholder's distributive share of the income of

the pass-through entity.

(6) The total amount of tax credit that may be awarded under this section shall be

limited to:

(a) Five hundred thousand dollars ($500,000) in each fiscal year beginning on or

before July 1, 2015; and

(b) One million dollars ($1,000,000) in each fiscal year beginning on or after July

1, 2016.

(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

component fund, or affiliate community foundation which has been certified

under KRS 147A.325 within thirty (30) days of the date of the notice of

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

preliminary approval for the tax credit; and

2. Publish on its Web site the amount of total credit allocated to date, the

date the last processed application for preliminary approval was

received, and the remaining credit available.

(b) 1. Upon receipt of an application for preliminary approval submitted under

subsection (7) of this section, the department shall review the

application and, if approved, the department shall issue a notice of

preliminary approval to the requesting taxpayer.

2. The notice of preliminary approval shall include the amount of credit,

shall notify the taxpayer that the proposed gift must be made within

thirty (30) days of the date reflected on the notice of authorization, and

that the taxpayer must notify the department that the gift has been made,

in the form and format determined by the department, within ten (10)

days of making the gift.

3. Upon preliminary approval of an application for credit, the department

shall reduce the outstanding available credit cap amount to reflect the

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 information provided and, if the information is accurate, the department

shall issue 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 and subsection (7) of this section, the department shall void the

preliminary approval and shall restore the allocated amounts to the tax credit

cap.