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AN ACT relating to a tax credit for security modifications. 1
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 2
SECTION 1. A NEW SECTION OF KRS CHAPTER 141 IS CREATED TO 3
READ AS FOLLOWS: 4
(1) As used in this section: 5
(a) "Qualified security modification" means installation of new hardware or 6
upgrades to existing hardware on the exterior of a taxpayer's principal 7
place of residence or residential rental unit to make it safer for the 8
occupants; 9
(b) "Qualifying taxpayer" means an individual taxpayer or married taxpayers 10
with an individual or joint adjusted gross income of less than one hundred 11
fifty thousand dollars ($150,000) per taxable year; and 12
(c) "Small business" means any business entity organized for profit, including 13
a sole proprietorship, partnership, limited partnership, corporation, limited 14
liability company, joint venture, association, or cooperative, that has fifty 15
(50) or fewer employees working more than thirty-five (35) hours per week 16
in the Commonwealth. 17
(2) (a) For taxable periods beginning on or after January 1, 2023, but before 18
January 1, 2027, there is hereby created a nonrefundable credit against the 19
tax imposed under KRS 141.020 or 141.040 and 141.0401, with the ordering 20
of credits as provided in Section 2 of this Act. The credit shall apply if one 21
(1) or more of the items listed in paragraph (b) of this subsection is installed 22
during the taxable year in a dwelling unit or commercial property located in 23
the Commonwealth that is owned by the taxpayer and used by the taxpayer 24
as: 25
1. The taxpayer's principal place of residence; 26
2. A single-family or multifamily residential rental unit; or 27 UNOFFICIAL COPY 22 RS BR 2308
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3. A building that houses a small business. 1
(b) The tax credit shall equal one hundred percent (100%) of the installed costs 2
of a qualified security modification, including: 3
1. Windows; 4
2. Doors; 5
3. Door locks; 6
4. Security cameras; 7
5. Motion sensitive lighting; 8
6. Fences; and 9
7. Alarm systems. 10
(c) In no case shall the total tax credits provided in this subsection exceed five 11
thousand dollars ($5,000) per tax return in a single taxable year. 12
(d) The total aggregate of all tax credits shall not exceed ten million dollars 13
($10,000,000) and is allocated as follows: 14
1. Five million dollars ($5,000,000) shall be the maximum amount of 15
credits against the tax imposed under KRS 141.020; and 16
2. Five million dollars ($5,000,000) shall be the maximum amount of 17
credits against the tax imposed under KRS 141.040 and 141.0401. 18
(3) The tax credits provided under this section shall apply in the tax year in which 19
the installation of exterior security features is completed. If the credit cannot be 20
taken in full in the year in which the installation is completed, the tax credit may 21
be carried forward one (1) year. 22
(4) The department may request copies of invoices, purchase receipts, installation 23
contracts, or any other information that the department determines necessary to 24
verify credits taken. 25
(5) The department shall establish, by administrative regulation, the guidelines and 26
technical requirements for items that are eligible for the tax credits provided 27 UNOFFICIAL COPY 22 RS BR 2308
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under subsection (2) of this section. 1
(6) (a) The purpose of the security modifications tax credit is to provide incentives 2
to home owners to make security upgrades, increasing safety for 3
neighborhoods in the Commonwealth. 4
(b) In order for the General Assembly to evaluate the fulfillment of the purpose 5
stated in paragraph (a) of this subsection, the department shall provide the 6
following information on a cumulative basis for each taxable year to 7
provide a historical impact of the tax credit to the Commonwealth: 8
1. The cumulative amount of tax credits claimed by individuals for each 9
taxable year; 10
2. The cumulative number of returns that claimed the credit for each 11
taxable year; 12
3. Based on the mailing address of the return, the cumulative total 13
amount of credits claimed by county for each taxable year; and 14
4. Based on ranges of adjusted gross income of no larger than five 15
thousand dollars ($5,000), the cumulative amount of tax credits 16
claimed by individuals for each adjusted gross income range for each 17
taxable year. 18
(c) The report required by paragraph (b) of this subsection shall be submitted 19
to the Interim Joint Committee on Appropriations and Revenue beginning 20
no later than November 1, 2024, and no later than November 1 each year 21
thereafter, as long as the credit is claimed on any return processed by the 22
department. 23
Section 2. KRS 141.0205 is amended to read as follows: 24
If a taxpayer is entitled to more than one (1) of the tax credits allowed against the tax 25
imposed by KRS 141.020, 141.040, and 141.0401, the priority of application and use of 26
the credits shall be determined as follows: 27 UNOFFICIAL COPY 22 RS BR 2308
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(1) The nonrefundable business incentive credits against the tax imposed by KRS 1
141.020 shall be taken in the following order: 2
(a) The limited liability entity tax credit permitted by KRS 141.0401; 3
(b) The economic development credits computed under KRS 141.347, 141.381, 4
141.384, 141.3841, 141.400, 141.401, 141.403, 141.407, 141.415, 154.12-5
207, and 154.12-2088; 6
(c) The qualified farming operation credit permitted by KRS 141.412; 7
(d) The certified rehabilitation credit permitted by KRS 171.397(1)(a); 8
(e) The health insurance credit permitted by KRS 141.062; 9
(f) The tax paid to other states credit permitted by KRS 141.070; 10
(g) The credit for hiring the unemployed permitted by KRS 141.065; 11
(h) The recycling or composting equipment credit permitted by KRS 141.390; 12
(i) The tax credit for cash contributions in investment funds permitted by KRS 13
154.20-263 in effect prior to July 15, 2002, and the credit permitted by KRS 14
154.20-258; 15
(j) The research facilities credit permitted by KRS 141.395; 16
(k) The employer High School Equivalency Diploma program incentive credit 17
permitted under KRS 151B.402; 18
(l) The voluntary environmental remediation credit permitted by KRS 141.418; 19
(m) The biodiesel and renewable diesel credit permitted by KRS 141.423; 20
(n) The clean coal incentive credit permitted by KRS 141.428; 21
(o) The ethanol credit permitted by KRS 141.4242; 22
(p) The cellulosic ethanol credit permitted by KRS 141.4244; 23
(q) The energy efficiency credits permitted by KRS 141.436; 24
(r) The railroad maintenance and improvement credit permitted by KRS 141.385; 25
(s) The Endow Kentucky credit permitted by KRS 141.438; 26
(t) The New Markets Development Program credit permitted by KRS 141.434; 27 UNOFFICIAL COPY 22 RS BR 2308
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(u) The distilled spirits credit permitted by KRS 141.389; 1
(v) The angel investor credit permitted by KRS 141.396; 2
(w) The film industry credit permitted by KRS 141.383 for applications approved 3
on or after April 27, 2018, but before January 1, 2022; 4
(x) The inventory credit permitted by KRS 141.408;[ and] 5
(y) The renewable chemical production credit permitted by KRS 141.4231; and 6
(z) The security modifications tax credit permitted by Section 1 of this Act. 7
(2) After the application of the nonrefundable credits in subsection (1) of this section, 8
the nonrefundable personal tax credits against the tax imposed by KRS 141.020 9
shall be taken in the following order: 10
(a) The individual credits permitted by KRS 141.020(3); 11
(b) The credit permitted by KRS 141.066; 12
(c) The tuition credit permitted by KRS 141.069; 13
(d) The household and dependent care credit permitted by KRS 141.067; 14
(e) The income gap credit permitted by KRS 141.066; and 15
(f) The Education Opportunity Account Program tax credit permitted by KRS 16
141.522. 17
(3) After the application of the nonrefundable credits provided for in subsection (2) of 18
this section, the refundable credits against the tax imposed by KRS 141.020 shall be 19
taken in the following order: 20
(a) The individual withholding tax credit permitted by KRS 141.350; 21
(b) The individual estimated tax payment credit permitted by KRS 141.305; 22
(c) The certified rehabilitation credit permitted by KRS 171.3961, 171.3963, and 23
171.397(1)(b); 24
(d) The film industry tax credit permitted by KRS 141.383 for applications 25
approved prior to April 27, 2018, or on or after January 1, 2022; and 26
(e) The development area tax credit permitted by KRS 141.398. 27 UNOFFICIAL COPY 22 RS BR 2308
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(4) The nonrefundable credit permitted by KRS 141.0401 shall be applied against the 1
tax imposed by KRS 141.040. 2
(5) The following nonrefundable credits shall be applied against the sum of the tax 3
imposed by KRS 141.040 after subtracting the credit provided for in subsection (4) 4
of this section, and the tax imposed by KRS 141.0401 in the following order: 5
(a) The economic development credits computed under KRS 141.347, 141.381, 6
141.384, 141.3841, 141.400, 141.401, 141.403, 141.407, 141.415, 154.12-7
207, and 154.12-2088; 8
(b) The qualified farming operation credit permitted by KRS 141.412; 9
(c) The certified rehabilitation credit permitted by KRS 171.397(1)(a); 10
(d) The health insurance credit permitted by KRS 141.062; 11
(e) The unemployment credit permitted by KRS 141.065; 12
(f) The recycling or composting equipment credit permitted by KRS 141.390; 13
(g) The coal conversion credit permitted by KRS 141.041; 14
(h) The enterprise zone credit permitted by KRS 154.45-090, for taxable periods 15
ending prior to January 1, 2008; 16
(i) The tax credit for cash contributions to investment funds permitted by KRS 17
154.20-263 in effect prior to July 15, 2002, and the credit permitted by KRS 18
154.20-258; 19
(j) The research facilities credit permitted by KRS 141.395; 20
(k) The employer High School Equivalency Diploma program incentive credit 21
permitted by KRS 151B.402; 22
(l) The voluntary environmental remediation credit permitted by KRS 141.418; 23
(m) The biodiesel and renewable diesel credit permitted by KRS 141.423; 24
(n) The clean coal incentive credit permitted by KRS 141.428; 25
(o) The ethanol credit permitted by KRS 141.4242; 26
(p) The cellulosic ethanol credit permitted by KRS 141.4244; 27 UNOFFICIAL COPY 22 RS BR 2308
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(q) The energy efficiency credits permitted by KRS 141.436; 1
(r) The ENERGY STAR home or ENERGY STAR manufactured home credit 2
permitted by KRS 141.437; 3
(s) The railroad maintenance and improvement credit permitted by KRS 141.385; 4
(t) The railroad expansion credit permitted by KRS 141.386; 5
(u) The Endow Kentucky credit permitted by KRS 141.438; 6
(v) The New Markets Development Program credit permitted by KRS 141.434; 7
(w) The distilled spirits credit permitted by KRS 141.389; 8
(x) The film industry credit permitted by KRS 141.383 for applications approved 9
on or after April 27, 2018, but before January 1, 2022; 10
(y) The inventory credit permitted by KRS 141.408; 11
(z) The renewable chemical production tax credit permitted by KRS 141.4231;[ 12
and] 13
(aa) The Education Opportunity Account Program tax credit permitted by KRS 14
141.522; and 15
(ab) The security modifications tax credit permitted by Section 1 of this Act. 16
(6) After the application of the nonrefundable credits in subsection (5) of this section, 17
the refundable credits shall be taken in the following order: 18
(a) The corporation estimated tax payment credit permitted by KRS 141.044; 19
(b) The certified rehabilitation credit permitted by KRS 171.3961, 171.3963, and 20
171.397(1)(b); and 21
(c) The film industry tax credit permitted by KRS 141.383 for applications 22
approved prior to April 27, 2018, or on or after January 1, 2022. 23
Section 3. KRS 131.190 is amended to read as follows: 24
(1) No present or former commissioner or employee of the department, present or 25
former member of a county board of assessment appeals, present or former property 26
valuation administrator or employee, present or former secretary or employee of the 27 UNOFFICIAL COPY 22 RS BR 2308
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Finance and Administration Cabinet, former secretary or employee of the Revenue 1
Cabinet, or any other person, shall intentionally and without authorization inspect or 2
divulge any information acquired by him or her of the affairs of any person, or 3
information regarding the tax schedules, returns, or reports required to be filed with 4
the department or other proper officer, or any information produced by a hearing or 5
investigation, insofar as the information may have to do with the affairs of the 6
person's business. 7
(2) The prohibition established by subsection (1) of this section shall not extend to: 8
(a) Information required in prosecutions for making false reports or returns of 9
property for taxation, or any other infraction of the tax laws; 10
(b) Any matter properly entered upon any assessment record, or in any way made 11
a matter of public record; 12
(c) Furnishing any taxpayer or his or her properly authorized agent with 13
information respecting his or her own return; 14
(d) Testimony provided by the commissioner or any employee of the department 15
in any court, or the introduction as evidence of returns or reports filed with the 16
department, in an action for violation of state or federal tax laws or in any 17
action challenging state or federal tax laws; 18
(e) Providing an owner of unmined coal, oil or gas reserves, and other mineral or 19
energy resources assessed under KRS 132.820, or owners of surface land 20
under which the unmined minerals lie, factual information about the owner's 21
property derived from third-party returns filed for that owner's property, under 22
the provisions of KRS 132.820, that is used to determine the owner's 23
assessment. This information shall be provided to the owner on a confidential 24
basis, and the owner shall be subject to the penalties provided in KRS 25
131.990(2). The third-party filer shall be given prior notice of any disclosure 26
of information to the owner that was provided by the third-party filer; 27 UNOFFICIAL COPY 22 RS BR 2308
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(f) Providing to a third-party purchaser pursuant to an order entered in a 1
foreclosure action filed in a court of competent jurisdiction, factual 2
information related to the owner or lessee of coal, oil, gas reserves, or any 3
other mineral resources assessed under KRS 132.820. The department may 4
promulgate an administrative regulation establishing a fee schedule for the 5
provision of the information described in this paragraph. Any fee imposed 6
shall not exceed the greater of the actual cost of providing the information or 7
ten dollars ($10); 8
(g) Providing information to a licensing agency, the Transportation Cabinet, or 9
the Kentucky Supreme Court under KRS 131.1817; 10
(h) Statistics of gasoline and special fuels gallonage reported to the department 11
under KRS 138.210 to 138.448; 12
(i) Providing any utility gross receipts license tax return information that is 13
necessary to administer the provisions of KRS 160.613 to 160.617 to 14
applicable school districts on a confidential basis; 15
(j) Providing documents, data, or other information to a third party pursuant to an 16
order issued by a court of competent jurisdiction; or 17
(k) Providing information to the Legislative Research Commission under: 18
1. KRS 139.519 for purposes of the sales and use tax refund on building 19
materials used for disaster recovery; 20
2. KRS 141.436 for purposes of the energy efficiency products credits; 21
3. KRS 141.437 for purposes of the ENERGY STAR home and the 22
ENERGY STAR manufactured home credits; 23
4. KRS 141.383 for purposes of the film industry incentives; 24
5. KRS 154.26-095 for purposes of the Kentucky industrial revitalization 25
tax credits and the job assessment fees; 26
6. KRS 141.068 for purposes of the Kentucky investment fund; 27 UNOFFICIAL COPY 22 RS BR 2308
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7. KRS 141.396 for purposes of the angel investor tax credit; 1
8. KRS 141.389 for purposes of the distilled spirits credit; 2
9. KRS 141.408 for purposes of the inventory credit; 3
10. KRS 141.390 for purposes of the recycling and composting credit; 4
11. KRS 141.3841 for purposes of the selling farmer tax credit; 5
12. KRS 141.4231 for purposes of the renewable chemical production tax 6
credit; 7
13. KRS 141.524 for purposes of the Education Opportunity Account 8
Program tax credit; 9
14. KRS 141.398 for purposes of the development area tax credit;[ and] 10
15. KRS 139.516 for the purposes of the sales and use tax exemption on the 11
commercial mining of cryptocurrency; and 12
16. Section 1 of this Act for the purposes of the security modifications tax 13
credit. 14
(3) The commissioner shall make available any information for official use only and on 15
a confidential basis to the proper officer, agency, board or commission of this state, 16
any Kentucky county, any Kentucky city, any other state, or the federal government, 17
under reciprocal agreements whereby the department shall receive similar or useful 18
information in return. 19
(4) Access to and inspection of information received from the Internal Revenue Service 20
is for department use only, and is restricted to tax administration purposes. 21
Information received from the Internal Revenue Service shall not be made available 22
to any other agency of state government, or any county, city, or other state, and shall 23
not be inspected intentionally and without authorization by any present secretary or 24
employee of the Finance and Administration Cabinet, commissioner or employee of 25
the department, or any other person. 26
(5) Statistics of crude oil as reported to the department under the crude oil excise tax 27 UNOFFICIAL COPY 22 RS BR 2308
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requirements of KRS Chapter 137 and statistics of natural gas production as 1
reported to the department under the natural resources severance tax requirements 2
of KRS Chapter 143A may be made public by the department by release to the 3
Energy and Environment Cabinet, Department for Natural Resources. 4
(6) Notwithstanding any provision of law to the contrary, beginning with mine-map 5
submissions for the 1989 tax year, the department may make public or divulge only 6
those portions of mine maps submitted by taxpayers to the department pursuant to 7
KRS Chapter 132 for ad valorem tax purposes that depict the boundaries of mined-8
out parcel areas. These electronic maps shall not be relied upon to determine actual 9
boundaries of mined-out parcel areas. Property boundaries contained in mine maps 10
required under KRS Chapters 350 and 352 shall not be construed to constitute land 11
surveying or boundary surveys as defined by KRS 322.010 and any administrative 12
regulations promulgated thereto. 13