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AN ACT relating to an income tax credit. 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) "Eligible taxpayer" means any taxpayer or entity that is levied a: 6
1. Firearm making tax; 7
2. Firearm special occupational tax; or 8
3. Firearm transfer tax; 9
(b) "Firearm making tax" means the tax imposed in accordance with 26 U.S.C. 10
sec. 5821, for the making of a firearm; 11
(c) "Firearm special occupational tax" means the tax imposed in accordance 12
with 26 U.S.C. sec. 5801 on an importer, manufacturer, or dealer of a 13
firearm; 14
(d) "Firearm transfer tax" means the tax imposed in accordance with 26 15
U.S.C. sec. 5811 for the transfer of a: 16
1. Firearm, or 17
2. Firearm classified as any other weapon under 26 U.S.C. sec. 5845(e). 18
(2) For taxable years beginning on or after January 1, 2026, but before January 1, 19
2030, there shall be allowed a refundable firearm federal taxes credit allowed 20
against the tax imposed under KRS 141.020 or 141.040 and 141.0401 with the 21
ordering of the credit as provided in KRS 141.0205. 22
(3) An eligible taxpayer may claim a firearm federal taxes credit in an amount equal 23
to the total amount of tax paid during the taxable year for a: 24
(a) Firearm making tax; 25
(b) Firearm special occupational tax; or 26
(c) Firearm transfer tax. 27 UNOFFICIAL COPY 25 RS BR 1028
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(4) An eligible taxpayer claiming the credit under this section shall submit, with their 1
return, verification of the firearm federal taxes paid during the taxable year for 2
which the credit is being claimed, and may include: 3
(a) Receipt of payment made to the Bureau of Alcohol, Tobacco, Firearms and 4
Explosives; 5
(b) Copy of the special tax stamp; or 6
(c) Any other documentation as may be required by the department. 7
(5) (a) In order for the General Assembly to evaluate the firearm federal taxes 8
credit, the department shall report to the Legislative Research Commission 9
and the Interim Joint Committee on Appropriations and Revenue on or 10
before November 1, 2027, and on or before each November 1 thereafter, as 11
long as the credit is claimed on a tax return, the following: 12
1. The number of returns, according to tax type, claiming the credit; 13
2. The total amount of credit claimed for each taxable year; 14
3. According to the address on the return, the number of returns and the 15
amount of credit claimed by county; and 16
4. a. In the case of all taxpayers other than corporations, based on 17
ranges of adjusted gross income of no larger than five thousand 18
dollars ($5,000) for the taxable year, the total amount of credit 19
claimed and the total number of returns claiming this credit for 20
each income range; and 21
b. In the case of all corporations, based on ranges of net income no 22
larger than fifty thousand dollar ($50,000) for the taxable year, 23
the total amount of credit claimed and the number of returns 24
claiming a credit for each net income range. 25
(b) The information required to be reported under this section shall not be 26
considered confidential taxpayer information and shall not be subject to 27 UNOFFICIAL COPY 25 RS BR 1028
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KRS Chapter 131 or any other provisions of the Kentucky Revised Statutes 1
prohibiting disclosure or reporting of information. 2
Section 2. KRS 141.0205 is amended to read as follows: 3
If a taxpayer is entitled to more than one (1) of the tax credits allowed against the tax 4
imposed by KRS 141.020, 141.040, and 141.0401, the priority of application and use of 5
the credits shall be determined as follows: 6
(1) The nonrefundable business incentive credits against the tax imposed by KRS 7
141.020 shall be taken in the following order: 8
(a) The limited liability entity tax credit permitted by KRS 141.0401; 9
(b) The economic development credits computed under KRS 141.347, 141.381, 10
141.384, 141.3841, 141.400, 141.403, 141.407, 141.415, 154.12-207, and 11
154.12-2088; 12
(c) The qualified farming operation credit permitted by KRS 141.412; 13
(d) The certified rehabilitation credit permitted by KRS 171.397(1)(a); 14
(e) The health insurance credit permitted by KRS 141.062; 15
(f) The tax paid to other states credit permitted by KRS 141.070; 16
(g) The credit for hiring the unemployed permitted by KRS 141.065; 17
(h) The recycling or composting equipment credit permitted by KRS 141.390; 18
(i) The [tax ]credit for cash contributions in investment funds permitted by KRS 19
154.20-263 in effect prior to July 15, 2002, and the credit permitted by KRS 20
154.20-258; 21
(j) The research facilities credit permitted by KRS 141.395; 22
(k) The employer High School Equivalency Diploma program incentive credit 23
permitted under KRS 151B.402; 24
(l) The voluntary environmental remediation credit permitted by KRS 141.418; 25
(m) The biodiesel and renewable diesel credit permitted by KRS 141.423; 26
(n) The clean coal incentive credit permitted by KRS 141.428; 27 UNOFFICIAL COPY 25 RS BR 1028
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(o) The ethanol credit permitted by KRS 141.4242; 1
(p) The cellulosic ethanol credit permitted by KRS 141.4244; 2
(q) The energy efficiency credits permitted by KRS 141.436; 3
(r) The railroad maintenance and improvement credit permitted by KRS 141.385; 4
(s) The Endow Kentucky credit permitted by KRS 141.438; 5
(t) The New Markets Development Program credit permitted by KRS 141.434; 6
(u) The distilled spirits credit permitted by KRS 141.389; 7
(v) The angel investor credit permitted by KRS 141.396; 8
(w) 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
(x) The inventory credit permitted by KRS 141.408; 11
(y) The renewable chemical production credit permitted by KRS 141.4231; and 12
(z) The qualified broadband investment [tax ]credit permitted by KRS 141.391; 13
(2) After the application of the nonrefundable credits in subsection (1) of this section, 14
the nonrefundable personal tax credits against the tax imposed by KRS 141.020 15
shall be taken in the following order: 16
(a) The individual credits permitted by KRS 141.020(3); 17
(b) The credit permitted by KRS 141.066; 18
(c) The tuition credit permitted by KRS 141.069; 19
(d) The household and dependent care credit permitted by KRS 141.067; 20
(e) The income gap credit permitted by KRS 141.066; and 21
(f) The Education Opportunity Account Program [tax ]credit permitted by KRS 22
141.522; 23
(3) After the application of the nonrefundable credits provided for in subsection (2) of 24
this section, the refundable credits against the tax imposed by KRS 141.020 shall be 25
taken in the following order: 26
(a) The individual withholding tax credit permitted by KRS 141.350; 27 UNOFFICIAL COPY 25 RS BR 1028
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(b) The individual estimated tax payment credit permitted by KRS 141.305; 1
(c) The certified rehabilitation credit permitted by KRS 171.3961, 171.3963, and 2
171.397(1)(b); 3
(d) The film industry [tax ]credit permitted by KRS 141.383 for applications 4
approved prior to April 27, 2018, or on or after January 1, 2022; 5
(e) The development area [tax ]credit permitted by KRS 141.398; 6
(f) The decontamination [tax ]credit permitted by KRS 141.419;[ and] 7
(g) The pass-through entity tax credit permitted by KRS 141.209; and 8
(h) The firearm federal taxes credit permitted by Section 1 of this Act; 9
(4) The nonrefundable credit permitted by KRS 141.0401 shall be applied against the 10
tax imposed by KRS 141.040; 11
(5) The following nonrefundable credits shall be applied against the sum of the tax 12
imposed by KRS 141.040 after subtracting the credit provided for in subsection (4) 13
of this section, and the tax imposed by KRS 141.0401 in the following order: 14
(a) The economic development credits computed under KRS 141.347, 141.381, 15
141.384, 141.3841, 141.400, 141.403, 141.407, 141.415, 154.12-207, and 16
154.12-2088; 17
(b) The qualified farming operation credit permitted by KRS 141.412; 18
(c) The certified rehabilitation credit permitted by KRS 171.397(1)(a); 19
(d) The health insurance credit permitted by KRS 141.062; 20
(e) The unemployment credit permitted by KRS 141.065; 21
(f) The recycling or composting equipment credit permitted by KRS 141.390; 22
(g) The coal conversion credit permitted by KRS 141.041; 23
(h) The enterprise zone credit permitted by KRS 154.45-090, for taxable periods 24
ending prior to January 1, 2008; 25
(i) The[ tax] credit for cash contributions to investment funds permitted by KRS 26
154.20-263 in effect prior to July 15, 2002, and the credit permitted by KRS 27 UNOFFICIAL COPY 25 RS BR 1028
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154.20-258; 1
(j) The research facilities credit permitted by KRS 141.395; 2
(k) The employer High School Equivalency Diploma program incentive credit 3
permitted by KRS 151B.402; 4
(l) The voluntary environmental remediation credit permitted by KRS 141.418; 5
(m) The biodiesel and renewable diesel credit permitted by KRS 141.423; 6
(n) The clean coal incentive credit permitted by KRS 141.428; 7
(o) The ethanol credit permitted by KRS 141.4242; 8
(p) The cellulosic ethanol credit permitted by KRS 141.4244; 9
(q) The energy efficiency credits permitted by KRS 141.436; 10
(r) The ENERGY STAR home or ENERGY STAR manufactured home credit 11
permitted by KRS 141.437; 12
(s) The railroad maintenance and improvement credit permitted by KRS 141.385; 13
(t) The railroad expansion credit permitted by KRS 141.386; 14
(u) The Endow Kentucky credit permitted by KRS 141.438; 15
(v) The New Markets Development Program credit permitted by KRS 141.434; 16
(w) The distilled spirits credit permitted by KRS 141.389; 17
(x) The film industry credit permitted by KRS 141.383 for applications approved 18
on or after April 27, 2018, but before January 1, 2022; 19
(y) The inventory credit permitted by KRS 141.408; 20
(z) The renewable chemical production [tax ]credit permitted by KRS 141.4231; 21
(aa) The Education Opportunity Account Program [tax ]credit permitted by KRS 22
141.522; and 23
(ab) The qualified broadband investment [tax ]credit permitted by KRS 141.391; 24
and 25
(6) After the application of the nonrefundable credits in subsection (5) of this section, 26
the refundable credits shall be taken in the following order: 27 UNOFFICIAL COPY 25 RS BR 1028
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(a) The corporation estimated tax payment credit permitted by KRS 141.044; 1
(b) The certified rehabilitation credit permitted by KRS 171.3961, 171.3963, and 2
171.397(1)(b); 3
(c) The film industry [tax ]credit permitted by KRS 141.383 for applications 4
approved prior to April 27, 2018, or on or after January 1, 2022; 5
(d) The decontamination[ tax] credit permitted by KRS 141.419;[ and] 6
(e) The pass-through entity tax credit permitted by KRS 141.209; and 7
(f) The firearm federal taxes credit permitted by Section 1 of this Act. 8
Section 3. KRS 131.190 is amended to read as follows: 9
(1) No present or former commissioner or employee of the department, present or 10
former member of a county board of assessment appeals, present or former property 11
valuation administrator or employee, present or former secretary or employee of the 12
Finance and Administration Cabinet, former secretary or employee of the Revenue 13
Cabinet, or any other person, shall intentionally and without authorization inspect 14
or divulge any information acquired by him or her of the affairs of any person, or 15
information regarding the tax schedules, returns, or reports required to be filed with 16
the department or other proper officer, or any information produced by a hearing or 17
investigation, insofar as the information may have to do with the affairs of the 18
person's business. 19
(2) The prohibition established by subsection (1) of this section shall not extend to: 20
(a) Information required in prosecutions for making false reports or returns of 21
property for taxation, or any other infraction of the tax laws; 22
(b) Any matter properly entered upon any assessment record, or in any way made 23
a matter of public record; 24
(c) Furnishing any taxpayer or his or her properly authorized agent with 25
information respecting his or her own return; 26
(d) Testimony provided by the commissioner or any employee of the department 27 UNOFFICIAL COPY 25 RS BR 1028
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in any court, or the introduction as evidence of returns or reports filed with the 1
department, in an action for violation of state or federal tax laws or in any 2
action challenging state or federal tax laws; 3
(e) Providing an owner of unmined coal, oil or gas reserves, and other mineral or 4
energy resources assessed under KRS 132.820, or owners of surface land 5
under which the unmined minerals lie, factual information about the owner's 6
property derived from third-party returns filed for that owner's property, under 7
the provisions of KRS 132.820, that is used to determine the owner's 8
assessment. This information shall be provided to the owner on a confidential 9
basis, and the owner shall be subject to the penalties provided in KRS 10
131.990(2). The third-party filer shall be given prior notice of any disclosure 11
of information to the owner that was provided by the third-party filer; 12
(f) Providing to a third-party purchaser pursuant to an order entered in a 13
foreclosure action filed in a court of competent jurisdiction, factual 14
information related to the owner or lessee of coal, oil, gas reserves, or any 15
other mineral resources assessed under KRS 132.820. The department may 16
promulgate an administrative regulation establishing a fee schedule for the 17
provision of the information described in this paragraph. Any fee imposed 18
shall not exceed the greater of the actual cost of providing the information or 19
ten dollars ($10); 20
(g) Providing information to a licensing agency, the Transportation Cabinet, or 21
the Kentucky Supreme Court under KRS 131.1817; 22
(h) Statistics of gasoline and special fuels gallonage reported to the department 23
under KRS 138.210 to 138.448; 24
(i) Providing any utility gross receipts license tax return information that is 25
necessary to administer the provisions of KRS 160.613 to 160.617 to 26
applicable school districts on a confidential basis; 27 UNOFFICIAL COPY 25 RS BR 1028
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(j) Providing documents, data, or other information to a third party pursuant to an 1
order issued by a court of competent jurisdiction; 2
(k) Publishing administrative writings on its official website in accordance with 3
KRS 131.020(1)(b); or 4
(l) Providing information to the Legislative Research Commission under: 5
1. KRS 139.519 for purposes of the sales and use tax refund on building 6
materials used for disaster recovery; 7
2. KRS 141.436 for purposes of the energy efficiency products credits; 8
3. KRS 141.437 for purposes of the ENERGY STAR home and the 9
ENERGY STAR manufactured home credits; 10
4. KRS 141.383 for purposes of the film industry incentives; 11
5. KRS 154.26-095 for purposes of the Kentucky industrial revitalization 12
credit[tax credits] and the job assessment fees; 13
6. KRS 141.068 for purposes of the Kentucky investment fund; 14
7. KRS 141.396 for purposes of the angel investor [tax ]credit; 15
8. KRS 141.389 for purposes of the distilled spirits credit; 16
9. KRS 141.408 for purposes of the inventory credit; 17
10. KRS 141.390 for purposes of the recycling and composting 18
credits[credit]; 19
11. KRS 141.3841 for purposes of the selling farmer [tax ]credit; 20
12. KRS 141.4231 for purposes of the renewable chemical production [tax 21
]credit; 22
13. KRS 141.524 for purposes of the Education Opportunity Account 23
Program [tax ]credit; 24
14. KRS 141.398 for purposes of the development area [tax ]credit; 25
15. KRS 139.516 for [the ]purposes of the sales and use tax exemptions 26
for[exemption on] the commercial mining of cryptocurrency; 27 UNOFFICIAL COPY 25 RS BR 1028
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16. KRS 141.419 for purposes of the decontamination [tax ]credit; 1
17. KRS 141.391 for purposes of the qualified broadband investment [tax 2
]credit;[ and] 3
18. KRS 139.499 for purposes of the sales and use tax 4
exemptions[exemption] for a qualified data center project; and 5
19. Section 1 of this Act for purposes of the firearm federal taxes credit. 6
(3) The commissioner shall make available any information for official use only and on 7
a confidential basis to the proper officer, agency, board or commission of this state, 8
any Kentucky county, any Kentucky city, any other state, or the federal 9
government, under reciprocal agreements whereby the department shall receive 10
similar or useful information in return. 11
(4) Access to and inspection of information received from the Internal Revenue Service 12
is for department use only, and is restricted to tax administration purposes. 13
Information received from the Internal Revenue Service shall not be made available 14
to any other agency of state government, or any county, city, or other state, and 15
shall not be inspected intentionally and without authorization by any present 16
secretary or employee of the Finance and Administration Cabinet, commissioner or 17
employee of the department, or any other person. 18
(5) Statistics of crude oil as reported to the department under the crude oil excise tax 19
requirements of KRS Chapter 137 and statistics of natural gas production as 20
reported to the department under the natural resources severance tax requirements 21
of KRS Chapter 143A may be made public by the department by release to the 22
Energy and Environment Cabinet, Department for Natural Resources. 23
(6) Notwithstanding any provision of law to the contrary, beginning with mine-map 24
submissions for the 1989 tax year, the department may make public or divulge only 25
those portions of mine maps submitted by taxpayers to the department pursuant to 26
KRS Chapter 132 for ad valorem tax purposes that depict the boundaries of mined-27 UNOFFICIAL COPY 25 RS BR 1028
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out parcel areas. These electronic maps shall not be relied upon to determine actual 1
boundaries of mined-out parcel areas. Property boundaries contained in mine maps 2
required under KRS Chapters 350 and 352 shall not be construed to constitute land 3
surveying or boundary surveys as defined by KRS 322.010 and any administrative 4
regulations promulgated thereto. 5