KRS 141.434 — New Markets Development Program tax credit

(1) There is hereby created a Kentucky New Markets Development Program tax credit.
(2) A person or entity that makes a qualified equity investment earns a vested right to
the tax credit created by subsection (1) of this section. The amount of the credit
shall be equal to thirty -nine percent (39%) of the purchase price of the qualified
equity investment made by the person or entity claiming the credit. The tax credit
may be utilized as follows:
(a) The holder of the qualified equity investment on a particular cr edit allowance
date of the qualified equity investment, whether it be the original purchaser or
subsequent holder of the qualified equity investment, may utilize a portion of
the tax credit against its tax liability for the taxable year that includes the
credit allowance date equal to the applicable percentage for the credit
allowance date multiplied by the purchase price paid for the qualified equity
investment;
(b) Any tax credit that a taxpayer may not utilize during a particular year may be
carried forward for use in any subsequent tax year; and
(c) An insurance company claiming a tax credit against the insurance premium
tax is not required to pay additional retaliatory tax levied pursuant to KRS
304.3-270.
(3) No tax credit claimed under this section ma y be sold or transferred. Tax credits that
a partnership, limited liability company, S corporation, or other pass -through entity
claims may be allocated to the partners, members, or shareholders of the entity for
their direct use in accordance with the pro visions of any agreement among the
partners, members, or shareholders.
(4) The total amount of tax credits that may be awarded by the department pursuant to
KRS 141.432 to 141.434 shall be limited to ten million dollars ($10,000,000) in
each fiscal year. Once the department has certified a cumulative amount of qualified
equity investments that can result in the utilization of this total amount of tax credits
in a fiscal year, the department may not certify any more qualified equity
investments. This limitat ion on qualified equity investments shall be based on
scheduled utilization of tax credits without regard to the potential for taxpayers to
carry forward tax credits to subsequent tax years.