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Schedule CELL

INSTRUCTIONS FOR SCHEDULE CELL

Page 2 of 2

(2017)

The cellulosic ethanol tax credit is applied against the individual income tax imposed by KRS 141.020 or the corporation income tax imposed

by KRS 141.040 and/or the limited liability entity tax (LLET) imposed by KRS 141.0401. The amount of tax credit claimed against the corporation

income tax and LLET can be different.

Purpose of Schedule—The application and credit certification

Part II—Cellulosic Ethanol Gallons Approved

schedule is used to report the number of gallons of cellulosic ethanol

produced in this state meeting the current ASTM standards. The

Line 1—This is the amount of cellulosic ethanol gallons approved

Department of Revenue will certify the amount of cellulosic ethanol

by the Department of Revenue for credit. If the approved credit

credit for each taxpayer. It is effective for cellulosic ethanol produced

exceeds the cellulosic ethanol tax credit cap, then the credit is

on or after January 1, 2008. The taxpayer is not entitled to the credit

determined by the department in Part III. It is a nonrefundable

for cellulosic ethanol produced in another state.

credit.

The credit rate is $1 per gallon with a total cap for all taxpayers

not to exceed $5,000,000 annually, except the cellulosic ethanol

A pass-through entity must include on each Schedule K-1 the

tax credit cap will be increased by the unused cap of the ethanol

partner’s, member’s, shareholder’s, or beneficiary’s pro rata share

tax credit. See Part III instructions for further explanation. There

of the approved credit. In addition, a pass-through entity must

is no carryforward for any unused credit.

notify the department electronically of all partners, members,

shareholders, or beneficiaries who may claim any amount of the

To ensure proper processing, fax or email Schedule CELL to the

approved credit. Failure to provide information to the department

Department of Revenue no later than January 15 following the close

in the following manner will constitute the forfeiture of available

of the preceding calendar year. Schedules postmarked or sent after

credits to all partners, members, shareholders, or beneficiaries

January 15 are void. Credit certification cannot be guaranteed for

in the pass-through entity.

schedules sent through regular mail.

Email address:

Fax number: 502–564–0058

KRC.WEBResponseEconomicDevelopmentCredits@ky.gov

The electronic mail must contain a separate attachment in plain

Email address:

KRC.WEBResponseEconomicDevelopmentCredits@ky.gov

format text or plain ASCII format that includes each partner’s,

member ’s, shareholder ’s, or beneficiary’s: (a) Name; (b)

The Department of Revenue will confirm receipt of the application. If

Address; (c) Telephone number; (d) Identification number; and

you do not receive confirmation within two weeks of submitting the

(e) Distributive share of the tax credit.

application, contact the Division of Corporation Tax at 502–564–8139.

The Department of Revenue will issue the credit certificate, listing

Part III—Cellulosic Ethanol Approved Credit Certificate

the amount of credit available, by April 15 following the close of

the preceding calendar year. Attach the credit certificate to the tax

The Department of Revenue determines the total approved credit.

return claiming the credit.

If it exceeds the cellulosic ethanol tax credit cap of $5,000,000, the

department will compute each taxpayer’s approved credit based

General Instructions—Check the appropriate entity type. If the entity

upon a fraction, the numerator (Line 1(a)) being the credit approved

type is not listed, check the “Other” box and list the entity type.

for the taxpayer and the denominator (Line 1(b)) being the total

credit approved for all taxpayers. The cellulosic ethanol tax credit

Federal Identification Number—For an individual, enter the

cap is multiplied by this fraction to determine each producer’s

Social Security number; for all other entities, enter the FEIN.

approved credit.

Testing—The regulation 103 KAR 15:120 provides that a copy of the

The annual cellulosic ethanol tax credit cap of $5,000,000 will be

laboratory results for July 1 and December 31 of each calendar year

increased by the unused cap of the ethanol tax credit if the total

must be attached to the application, Schedule CELL, submitted to

approved applications for the cellulosic ethanol tax credit exceeds

the Department of Revenue. Failure to provide proof of meeting

its $5,000,000 cap. The amount of credit cap transferred to the

the ASTM standard on July 1 and December 31 of each calendar

cellulosic ethanol tax credit shall not exceed the amount necessary

year with the application will result in the denial of the credit for

for all applicants to receive the one dollar ($1) per gallon credit per

gallons of cellulosic ethanol back to the previous testing date of

KRS 141.4244.

July 1 or December 31.

Part IV—Cellulosic Ethanol Credit Used by Taxpayer

Part I—Gallons Produced in Kentucky During the Calendar Year

Line 1—Enter the amount of credit claimed for the taxable year

Line 1—Enter the number of gallons of cellulosic ethanol produced

against the LLET on Schedule TCS, Part II, Column E. The credit

in this state for the calendar year.

amount cannot reduce the LLET below the $175 minimum.

Part II and Part III

Line 2—Enter the amount of credit claimed for the taxable year

against the corporation income tax on Schedule TCS, Part II, Column

These parts are completed by the Department of Revenue to

F .

determine the cellulosic ethanol credit for each taxpayer. Part III is

used if the total amount of approved credit for all cellulosic ethanol

Line 3—Enter the amount of credit claimed for the taxable year on

producers exceeds the annual cellulosic ethanol tax credit cap.

Form 740, 740–NP , or 741.

41A720CELL (19JUN17-DRAFT)

Form 41a720cell Draft - Schedule Cell - Application And Credit Certificate Of Income Tax/llet Credit Cellulosic Ethanol - 2017 Page 2

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