Form 51a109 - Application For Energy Direct Pay Authorization (Page 2 of 2) in pdf

GENERAL INFORMATION

This form should be submitted only by persons engaged in the business of manufacturing, processing, mining, or refining who

anticipate that the cost to them of energy or energy-producing fuel will exceed 3 percent of the cost of production. A Retail Sales

and Use Tax Permit must be obtained by all persons who obtain an Energy Direct Pay Authorization. If you require a Retail Sales

and Use Tax Permit and have not submitted a Kentucky Tax Registration Application, Revenue Form 10A100, submit that form

with this application. Mail completed application to: Sales and Use Tax Division, Kentucky Department of Revenue,

Frankfort, Kentucky 40620. If you choose to qualify for the UGRLT energy exemption, you must register for a UGRLT

number and you will be required to file monthly UGRLT returns electronically via KY E-Tax.

INSTRUCTIONS

Complete all information requested on the reverse side of this form. Attach a schedule showing the account classification and

amount (based on the last completed calendar or fiscal year) of all costs included in computing the cost of production except cost

for energy or energy-producing fuels. The following accounts or similar classifications should be included:

Direct Materials

Direct Labor Cost

Overhead Expenses:

Depreciation—Plant Equipment

Insurance—Plant Equipment

Taxes—Plant Equipment

Rent or Depreciation—Plant Building

Heat, Lights, and Water

Compensation Insurance

Indirect Materials

Indirect Labor

Miscellaneous Factory Expenses

Administrative Expenses Allocated to Cost of Production

Office Expenses Allocated to Cost of Production

IMPORTANT: The cost of production must be computed on the basis of plant facilities. The term “plant facilities” means all

permanent structures affixed to real property at one location. Therefore, if you operate more than one facility, an

application must be completed on each location for which you are seeking the Energy Direct Pay Authorization.

SPECIAL INSTRUCTIONS FOR COAL MINES AND QUARRIES

The following accounts must also be included in the cost of production: Rents, Royalties, Cost Depletion, Reclamation and

Severance Tax.

**(UGRLT Only)**

SPECIAL INSTRUCTIONS FOR PLANT FACILITIES UTILIZING

OTHER FUELS AS AN ENERGY SOURCE

When calculating the amount of energy or energy-producing fuels relative to the UGRLT energy exemption, note fuels

such as diesel fuel are not subject to the UGRLT, therefore they are excluded in the calculation of energy costs.

However, such fuel costs are included in the cost of production, as evidenced by the addition of Line 5 to Line 1 to

obtain the UGRLT cost of production on Line 7. If your allowable cost of energy exceeds the 3 percent cost of

production, you qualify for the energy exemption for the UGRLT.

IF YOUR APPLICATION IS APPROVED:

(1)

You will be permitted to purchase all energy or energy-producing fuel for the qualifying facility without payment of the sales

or use tax, and if applicable the UGRLT. You will be required to estimate the cost of such energy or energy-producing fuel

which does not exceed 3 percent of the cost of production, and remit the applicable tax on the estimated amount monthly to

the Department of Revenue.

(2)

A letter of authorization for each applicable exemption will be mailed to you. You must forward a copy of the letter to each

of your suppliers of energy or energy-producing fuels, and the letter must be maintained by the supplier to verify the

nontaxability.

(3)

You will be required to report the Estimated Monthly Cost of Energy or Energy-Producing Fuel Subject to Tax, as listed on

the reverse side of this form, each month on Line 23b of the Sales and Use Tax Return, and, if applicable, on Line 5b of your

UGRLT return to compute the total monthly tax due. An annual return must be filed within four months after the end of your

calendar or fiscal year reconciling the estimated cost of energy or energy-producing fuel subject to tax with the actual cost

subject to tax for the period. Any additional tax due must be paid with the annual return. If amounts were overpaid on the

monthly returns, a refund will be issued or credit may be taken on the estimate for the succeeding year.

Form 51a109 - Application For Energy Direct Pay Authorization Page 2

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