KRS 141.396 — Nonrefundable angel investor tax credit against individual income tax -- Carry forward -- Transfer of credit -- Recapture of credit -- Data reporting requirements

(1) As used in this section:
(a) "Authority" has the same meaning as in KRS 154.20-230;
(b) "Qualified investor" has the same meaning as in KRS 154.20-230;
(c) "Qualified small business" has the same meaning as in KRS 154.20-230; and
(d) "Taxpayer" means an individual subject to the tax imposed by KRS 141.020,
who has either:
1. Received a credit from the authority pursuant to KRS 154.20-236; or
2. Received a credit through a valid transfer allowed under this section
from a qualified investor that was originally awarded the credit.
(2) For taxable years beginning on or after Janua ry 1, 2015, there is hereby created the
angel investor tax credit. The credit shall be nonrefundable, and shall apply against
the tax imposed by KRS 141.020. The ordering of the credit shall be as provided in
KRS 141.0205.
(3) A qualified investor may seek a credit by applying to the authority pursuant to KRS
154.20-236.
(4) The maximum amount of credit that may be claimed by a taxpayer in any taxable
year shall not exceed fifty percent (50%) of the total amount of credit awarded or
transferred to the taxpayer.
(5) Any amount of credit that a taxpayer is unable to utilize during a taxable year may
be carried forward for use in a succeeding taxable year for a period not to exceed
fifteen (15) years. Any amount of credit not used within fifteen (15) years shal l be
lost. No amount of credit may be carried back by any taxpayer.
(6) The credit shall not apply to any liability a taxpayer may have for interest, penalties,
past due taxes, or any other additions to the taxpayer's tax liability. The holder of
the credit shall assume any and all liabilities and responsibilities of the credit.
(7) A credit may be transferred by a qualified investor to any individual taxpayer. A
qualified investor making a transfer shall give written notice to the department and
shall provide any other information required by the department, in the manner
prescribed by the department. Any transferred credit shall be subject to the original
timeframes and requirements established by this section and KRS 154.20 -230 to
154.20-240 as if held by the qualified investor.
(8) To receive the credit, a taxpayer shall claim the credit on his or her return in the
manner prescribed by the department.
(9) The department shall recapture any portion, or the full amount, of a credit upon
notification from the authority that a recapture is required pursuant to KRS 154.20 -
240.
(10) In order for the General Assembly to evaluate the fulfillment of the purposes stated
in KRS 154.20 -232, the department and the Cabinet for Economic Development
shall work jointly to submit the following information to the Interim Joint
Committee on Appropriatio ns and Revenue on or before May 1, 2019, and each
May 1 thereafter, related to each taxable year that an angel investor credit is claimed
on a return:
(a) The number of qualified small businesses certified by the authority;
(b) The demographics of each qualified small business, including:
1. The net worth of the qualified small business;
2. The qualified activity the qualified small business is actively and
principally engaged in within the Commonwealth;
3. The number of employees of the qualified small business;
4. The location of the assets, operations, and employees of the qualified
small business; and
5. The aggregate amount of qualified investments received by the qualified
small business;
(c) A list detailing each qualified investor certified by the authority, the amount of
investment made by each qualified investor, the date each qualified
investment is made by the qualified investor, and the amount of tax credit
awarded each investor;
(d) By taxable year, the amount of tax credit claimed by each inves tor and the
amount of credit available to be claimed in future taxable years;
(e) The number of qualified small businesses that are active, inactive, or closed
that have received qualified investments;
(f) The number of qualified small businesses that have established a location in
the Commonwealth and the number that have expanded operations, the
number and location of each new job created, a description of each
development of new products and technologies in the Commonwealth, and the
field of operation fo r that growth, including knowledge -based, high-tech, or
research and development; and
(g) The total amount of tax credit awarded for each fiscal year.
(11) If either the department or the Cabinet for Economic Development does not
currently have the data to fulfill the reporting requirement of subsection (10) of this
section, the department and the cabinet shall work jointly to obtain the data in an
expedient manner to provide the report on or before the May 1, 2019, report date.