Ky business investment program

Kentucky Small Business Tax Credit KSBTC : An eligible small business is any business organized for profit with 50 or fewer full-time employees that is not an affiliate or subsidiary of a larger corporate structure. An eligible company may not apply until one year after both of the minimum requirements are met. The cash account may be pledged as collateral on behalf of the borrower and placed on deposit at the participating lending institution or designated insured depository financial institution.

Property tax exemption: Kentucky taxes all real property that is not specifically exempted by the state constitution and tangible personal property unless it has been exempted by the legislature.

Schedule KBI-T is used by the company which has entered into an agreement for a Kentucky Business Investment Program KBI project to maintain a record of approved costs, wage assessments, and tax credits, including local wage assessment credit claimed.

First and Last Year Prorations—Tax incentives are only available to be claimed during the term of the incentive agreement. Tax incentives claimed during the first and last years of an incentive agreement must be prorated accordingly. Separate period accounting is recommended, but a proration factor may be used if separate period accounting is not available. To determine the proration factor in the first year of the incentive agreement, divide the number of days from the activation date until the end of your taxable year by the total number of days in your taxable year.

Multiply the total income by the proration factor to determine the project income when separate period accounting is not available. To determine the proration factor in the last year of the incentive agreement, divide the number of days from the first day of your taxable year through the end of the incentive agreement term by the total number of days in your taxable year. If line 2 is greater than line 1, enter The amount of tax credit against each tax can be different; however, for tracking purposes, the maximum amount of credit used against either tax is the amount that is used for the tax year.

Thus, if any method other than separate accounting is used, a copy of the letter from the Department of Revenue approving the alternative method must be attached to this schedule. In the first and last years of each project, only calculate Kentucky gross receipts and gross profits received during the term of the incentive agreement.

If the corporation has operations other than the KBI project, it must attach schedules reflecting the computation of Kentucky gross profits and Kentucky gross receipts from the KBI project per KRS See form for computation.

A corporation with more than one economic development project must separately compute the tax credit derived from each project. A copy of the letter from the Department of Revenue approving the formula must be attached to this schedule.

Day Yr. Not applicable for general partnerships Pass—through entities should first complete Form PTE to determine net income loss , deductions, etc. A pass—through entity is subject to tax per KRS If the pass—through entity has operations other than the KBI project, a schedule must be attached reflecting the computation of the net income loss from the KBI project in accordance with the following instructions and enter on Line 1.

In the first and last years of each project, only calculate Kentucky taxable income received during the term of the incentive agreement. A copy of the letter from the Department of Revenue approving the percentage must be attached to the schedule. A copy of the letter from the Department of Revenue approving the alternative method must be attached to this schedule.

If the economic development project is an expansion to a previously existing facility, net income of the entire facility must reflect only the gross income, deductions, expenses, gains, and losses allowed under this chapter directly attributable to the facility and overhead expenses apportioned to the facility; and Kentucky gross receipts and Kentucky gross profits must reflect only Kentucky gross receipts and Kentucky gross profits directly attributable to the facility.

Net income, Kentucky gross receipts, and Kentucky gross profits of the entire facility attributable to the economic development project must be determined by apportioning the net income, Kentucky gross receipts, and Kentucky gross profits by a formula approved by the Department of Revenue. Line 2—Enter the net operating loss from the KBI project, if any, being carried forward from previous years. Note: Just as the income from a KBI project does not flow through to partners, members, or shareholders, neither do the losses.

If you would like to know more about the program, the attorneys at McBrayer are ready to answer your questions and assist you with the financing of your economic development project. James H. Frazier's practice focuses on real estate, bankruptcy, mergers and acquisitions and general corporate practice with special emphasis on mineral and energy law.

He can be reached at jfrazier mcbrayerfirm. X Code. Join us on LinkedIn.