Kentucky ~ Corporate, Personal Income Taxes: Emergency New Markets Credit Regulation Adopted

CCH Tax Day Report

The Kentucky Department of Revenue has adopted an emergency regulation to provide qualified community development entities procedures necessary when applying for and administering the New Markets Development Program tax credit. The credit may be claimed against liability for the Kentucky corporation income tax, the limited liability entity tax (LLET), and the personal income tax by investors in long-term debt securities issued by a qualified community development entity that provides financing to businesses in Kentucky low-income communities. The credit is equal to 39% of the purchase price of the equity investment and may be claimed by the investor over the course of seven years. The total amount of tax credits that may be awarded to all investors in each fiscal year is capped at $10 million each fiscal year. $5 million of the credit cap is available for allocation after June 30, 2016. The emergency regulation is necessary because qualified community development entities will begin applying for the $5 million in tax credits on July 15, 2016. A permanent regulation to replace the emergency regulation was also filed for public comment.

103 KAR 15:180E, Kentucky Department of Revenue, effective July 13, 2016

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