AN ACT relating to a tax credit for Kentucky Educational Savings Plan Trust account contributions.

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AN ACT relating to a tax credit for Kentucky Educational Savings Plan Trust 1
account contributions. 2
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 3
SECTION 1. A NEW SECTION OF KRS CHAPTER 141 IS CREATED TO 4
READ AS FOLLOWS: 5
(1) As used in this section: 6
(a) "Contribution" means the amount contributed to a Kentucky Educational 7
Savings Plan Trust account to be used by a beneficiary as required by 26 8
U.S.C. sec. 529; 9
(b) "Kentucky Educational Savings Plan Trust account" or "savings plan trust 10
account" means the trust established pursuant to KRS 164A.310, to which 11
contributions are made and withdrawn by a beneficiary for qualified 12
educational expenses; and 13
(c) "Qualified educational expenses" has the same meaning as in KRS 14
164A.305. 15
(2) (a) For taxable years beginning on or after January 1, 2027, but before 16
January 1, 2031, the Kentucky Educational Savings Plan Trust account 17
contribution credit shall be availabl e for resident taxpayers making 18
contributions to a Kentucky Educational Savings Plan Trust account. 19
(b) The credit shall be nonrefundable, nontransferable, and allowed against the 20
tax imposed under KRS 141.020 with the ordering of the credit as provided 21
in Section 2 of this Act. 22
(c) The credit shall: 23
1. Be equal to the total contributions made to a savings plan trust 24
account for the taxable year; but 25
2. Not exceed nineteen thousand dollars ($19,000), per taxpayer, per 26
taxable year. 27
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(3) By November 1 of eac h year in which a Kentucky Education Savings Plan Trust 1
account contribution credit is claimed, the department shall report to the 2
Legislative Research Commission for referral to the Interim Joint Committee on 3
Appropriations and Revenue: 4
1. The number of r eturns claiming the Kentucky Education Savings Plan 5
Trust account contribution credit; 6
2. The total amount of credit claimed for each taxable year; 7
3. According to the address on the return, the number of returns and the 8
amount of credit claimed by county; and 9
4. Based on ranges of adjusted gross income of no larger than five thousand 10
dollars ($5,000) for the taxable year, the total amount of tax credit claimed 11
and the number of returns claiming a tax credit for each adjusted gross 12
income range. 13
Section 2. KRS 141.0205 is amended to read as follows: 14
If a taxpayer is entitled to more than one (1) of the tax credits allowed against the tax 15
imposed by KRS 141.020, 141.040, and 141.0401, the priority of application and use of 16
the credits shall be determined as follows: 17
(1) The nonrefundable business incentive credits against the tax imposed by KRS 18
141.020 shall be taken in the following order: 19
(a) The limited liability entity tax credit permitted by KRS 141.0401; 20
(b) The econo mic development credits computed under KRS 141.347, 141.381, 21
141.384, 141.3841, 141.400, 141.403, 141.407, 141.415, 154.12 -207, and 22
154.12-2088; 23
(c) The qualified farming operation credit permitted by KRS 141.412; 24
(d) The certified rehabilitation credit permitted by KRS 171.397(1)(a); 25
(e) The health insurance credit permitted by KRS 141.062; 26
(f) The tax paid to other states credit permitted by KRS 141.070; 27
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(g) The credit for hiring the unemployed permitted by KRS 141.065; 1
(h) The recycling or composting equipment credit permitted by KRS 141.390; 2
(i) The [tax ]credit for cash contributions in investment funds permitted by KRS 3
154.20-263 in effect prior to July 15, 2002, and the credit permitted by KRS 4
154.20-258; 5
(j) The research facilities credit permitted by KRS 141.395; 6
(k) The employer High School Equivalency Diploma program incentive credit 7
permitted under KRS 151B.402; 8
(l) The voluntary environmental remediation credit permitted by KRS 141.418; 9
(m) The biodiesel and renewable diesel credit permitted by KRS 141.423; 10
(n) The clean coal incentive credit permitted by KRS 141.428; 11
(o) The ethanol credit permitted by KRS 141.4242; 12
(p) The cellulosic ethanol credit permitted by KRS 141.4244; 13
(q) The energy efficiency credits permitted by KRS 141.436; 14
(r) The railroad maintenance and improvement credit permitted by KRS 141.385; 15
(s) The Endow Kentucky credit permitted by KRS 141.438; 16
(t) The New Markets Development Program credit permitted by KRS 141.434; 17
(u) The distilled spirits credit permitted by KRS 141.389; 18
(v) The angel investor credit permitted by KRS 141.396; 19
(w) The film industry credit permitted by KRS 141.383 for applicatio ns approved 20
on or after April 27, 2018, but before January 1, 2022; 21
(x) The inventory credit permitted by KRS 141.408; 22
(y) The renewable chemical production credit permitted by KRS 141.4231; and 23
(z) The qualified broadband investment [tax ]credit permitted by KRS 141.391; 24
(2) After the application of the nonrefundable credits in subsection (1) of this section, 25
the nonrefundable personal tax credits against the tax imposed by KRS 141.020 26
shall be taken in the following order: 27
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(a) The individual credits permitted by KRS 141.020(3); 1
(b) The credit permitted by KRS 141.066; 2
(c) The tuition credit permitted by KRS 141.069; 3
(d) The household and dependent care credit permitted by KRS 141.067; 4
(e) The income gap credit permitted by KRS 141.066;[ and] 5
(f) The Education Opportunity Account Program [tax ]credit permitted by KRS 6
141.522; and 7
(g) The Kentucky Educational Savings Plan Trust account contribution credit 8
permitted by Section 1 of this Act; 9
(3) After the application of the nonrefundable credits provided for i n subsection (2) of 10
this section, the refundable credits against the tax imposed by KRS 141.020 shall be 11
taken in the following order: 12
(a) The individual withholding tax credit permitted by KRS 141.350; 13
(b) The individual estimated tax payment credit permitted by KRS 141.305; 14
(c) The certified rehabilitation credit permitted by KRS 171.3961, 171.3963, and 15
171.397(1)(b); 16
(d) The film industry [tax ] credit permitted by KRS 141.383 for applications 17
approved prior to April 27, 2018, or on or after January 1, 2022; 18
(e) The development area [tax ]credit permitted by KRS 141.398; 19
(f) The decontamination [tax ]credit permitted by KRS 141.419; and 20
(g) The pass-through entity tax credit permitted by KRS 141.209; 21
(4) The nonrefundable credit permitted by KRS 141.0401 shall be applied against the 22
tax imposed by KRS 141.040; 23
(5) The following nonrefundable credits shall be applied against the sum of the tax 24
imposed by KRS 141.040 after subtracting the credit provided for in subsection (4) 25
of this section, and the tax imposed by KRS 141.0401 in the following order: 26
(a) The economic development credits computed under KRS 141.347, 141.381, 27
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141.384, 141.3841, 141.400, 141.403, 141.407, 141.415, 154.12 -207, and 1
154.12-2088; 2
(b) The qualified farming operation credit permitted by KRS 141.412; 3
(c) The certified rehabilitation credit permitted by KRS 171.397(1)(a); 4
(d) The health insurance credit permitted by KRS 141.062; 5
(e) The unemployment credit permitted by KRS 141.065; 6
(f) The recycling or composting equipment credit permitted by KRS 141.390; 7
(g) The coal conversion credit permitted by KRS 141.041; 8
(h) The enterprise zone credit permitted by KRS 154.45 -090, for taxabl e periods 9
ending prior to January 1, 2008; 10
(i) The [tax ]credit for cash contributions to investment funds permitted by KRS 11
154.20-263 in effect prior to July 15, 2002, and the credit permitted by KRS 12
154.20-258; 13
(j) The research facilities credit permitted by KRS 141.395; 14
(k) The employer High School Equivalency Diploma program incentive credit 15
permitted by KRS 151B.402; 16
(l) The voluntary environmental remediation credit permitted by KRS 141.418; 17
(m) The biodiesel and renewable diesel credit permitted by KRS 141.423; 18
(n) The clean coal incentive credit permitted by KRS 141.428; 19
(o) The ethanol credit permitted by KRS 141.4242; 20
(p) The cellulosic ethanol credit permitted by KRS 141.4244; 21
(q) The energy efficiency credits permitted by KRS 141.436; 22
(r) The ENE RGY STAR home or ENERGY STAR manufactured home credit 23
permitted by KRS 141.437; 24
(s) The railroad maintenance and improvement credit permitted by KRS 141.385; 25
(t) The railroad expansion credit permitted by KRS 141.386; 26
(u) The Endow Kentucky credit permitted by KRS 141.438; 27
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(v) The New Markets Development Program credit permitted by KRS 141.434; 1
(w) The distilled spirits credit permitted by KRS 141.389; 2
(x) 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
(y) The inventory credit permitted by KRS 141.408; 5
(z) The renewable chemical production [tax ]credit permitted by KRS 141.4231; 6
(aa) The Education Opportunity Account Program [tax ]credit permitted by KRS 7
141.522; and 8
(ab) The qualified broadband investment [tax ]credit permitted by KRS 141.391; 9
and 10
(6) After the application of the nonrefundable credits in subsection (5) of th is section, 11
the refundable credits shall be taken in the following order: 12
(a) The corporation estimated tax payment credit permitted by KRS 141.044; 13
(b) The certified rehabilitation credit permitted by KRS 171.3961, 171.3963, and 14
171.397(1)(b); 15
(c) The fil m industry [tax ] credit permitted by KRS 141.383 for applications 16
approved prior to April 27, 2018, or on or after January 1, 2022; 17
(d) The decontamination [tax ]credit permitted by KRS 141.419; and 18
(e) The pass-through entity tax credit permitted by KRS 141.209. 19
Section 3. KRS 131.190 is amended to read as follows: 20
(1) No present or former commissioner or employee of the department, present or 21
former member of a county board of assessment appeals, present or former property 22
valuation administrator or employee, present or former secretary or employee of the 23
Finance and Administration Cabinet, former secretary or employee of the Revenue 24
Cabinet, or any other person, shall intentionally and without authorization inspect 25
or divulge any information acquired by him or her of the affairs of any person, or 26
information regarding the tax schedules, returns, or reports required to be filed with 27
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the department or other proper officer, or any information produced by a hearing or 1
investigation, insofar as the information may have to do with the affairs of the 2
person's business. 3
(2) The prohibition established by subsection (1) of this section shall not extend to: 4
(a) Information required in prosecutions for making false reports or return s of 5
property for taxation, or any other infraction of the tax laws; 6
(b) Any matter properly entered upon any assessment record, or in any way made 7
a matter of public record; 8
(c) Furnishing any taxpayer or his or her properly authorized agent with 9
information respecting his or her own return; 10
(d) Testimony provided by the commissioner or any employee of the department 11
in any court, or the introduction as evidence of returns or reports filed with the 12
department, in an action for violation of state or federal tax laws or in any 13
action challenging state or federal tax laws; 14
(e) Providing an owner of unmined coal, oil or gas reserves, and other mineral or 15
energy resources assessed under KRS 132.820, or owners of surface land 16
under which the unmined minerals lie, factual information about the owner's 17
property derived from third-party returns filed for that owner's property, under 18
the provisions of KRS 132.820, that is used to determine the owner's 19
assessment. This information shall be provided to the owner on a co nfidential 20
basis, and the owner shall be subject to the penalties provided in KRS 21
131.990(2). The third -party filer shall be given prior notice of any disclosure 22
of information to the owner that was provided by the third-party filer; 23
(f) Providing to a thi rd-party purchaser pursuant to an order entered in a 24
foreclosure action filed in a court of competent jurisdiction, factual 25
information related to the owner or lessee of coal, oil, gas reserves, or any 26
other mineral resources assessed under KRS 132.820. Th e department may 27
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promulgate an administrative regulation establishing a fee schedule for the 1
provision of the information described in this paragraph. Any fee imposed 2
shall not exceed the greater of the actual cost of providing the information or 3
ten dollars ($10); 4
(g) Providing information to a licensing agency, the Transportation Cabinet, or 5
the Kentucky Supreme Court under KRS 131.1817; 6
(h) Statistics of gasoline and special fuels gallonage reported to the department 7
under KRS 138.210 to 138.448; 8
(i) Providing any utility gross receipts license tax return information that is 9
necessary to administer the provisions of KRS 160.613 to 160.617 to 10
applicable school districts on a confidential basis; 11
(j) Providing documents, data, or other information to a third party pursuant to an 12
order issued by a court of competent jurisdiction; 13
(k) Publishing administrative writings on its official website in accordance with 14
KRS 131.020(1)(b); or 15
(l) Providing information to the Legislative Research Commission under: 16
1. KRS 139.519 for purposes of the sales and use tax refund on building 17
materials used for disaster recovery; 18
2. KRS 141.436 for purposes of the energy efficiency products credits; 19
3. KRS 141.437 for purposes of the ENERGY STAR home and the 20
ENERGY STAR manufactured home credits; 21
4. KRS 141.383 for purposes of the film industry incentives; 22
5. KRS 154.26 -095 for purposes of the Kentucky industrial revitalization 23
credit and the job assessment fees; 24
6. KRS 141.068 for purposes of the Kentucky investment fund; 25
7. KRS 141.396 for purposes of the angel investor credit; 26
8. KRS 141.389 for purposes of the distilled spirits credit; 27
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9. KRS 141.408 for purposes of the inventory credit; 1
10. KRS 141.390 for purposes of the recycling and composting credits; 2
11. KRS 141.3841 for purposes of the selling farmer credit; 3
12. KRS 141.4231 for purposes of the renewable chemical production 4
credit; 5
13. KRS 141.524 for purposes of the Education Opportunity Accoun t 6
Program credit; 7
14. KRS 141.398 for purposes of the development area credit; 8
15. KRS 139.516 for purposes of the sales and use tax exemptions for the 9
commercial mining of cryptocurrency; 10
16. KRS 141.419 for purposes of the decontamination credit; 11
17. KRS 141.391 for purposes of the qualified broadband investment credit; 12
18. KRS 139.499 for purposes of the sales and use tax exemptions for a 13
qualified data center project;[ and] 14
19. KRS 139.5325 for purposes of the sales and use tax incentive for a 15
qualifying attraction; and 16
20. Section 1 of this Act for purposes of the Kentucky Educational 17
Savings Plan Trust account contribution credit. 18
(3) The commissioner shall make available any information for official use only and on 19
a confidential basis to the proper o fficer, agency, board or commission of this state, 20
any Kentucky county, any Kentucky city, any other state, or the federal 21
government, under reciprocal agreements whereby the department shall receive 22
similar or useful information in return. 23
(4) Access to and inspection of information received from the Internal Revenue Service 24
is for department use only, and is restricted to tax administration purposes. 25
Information received from the Internal Revenue Service shall not be made available 26
to any other agency of state government, or any county, city, or other state, and 27
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shall not be inspected intentionally and without authorization by any present 1
secretary or employee of the Finance and Administration Cabinet, commissioner or 2
employee of the department, or any other person. 3
(5) Statistics of crude oil as reported to the department under the crude oil excise tax 4
requirements of KRS Chapter 137 and statistics of natural gas production as 5
reported to the department under the natural resources severance tax requirement s 6
of KRS Chapter 143A may be made public by the department by release to the 7
Energy and Environment Cabinet, Department for Natural Resources. 8
(6) Notwithstanding any provision of law to the contrary, beginning with mine -map 9
submissions for the 1989 tax ye ar, the department may make public or divulge only 10
those portions of mine maps submitted by taxpayers to the department pursuant to 11
KRS Chapter 132 for ad valorem tax purposes that depict the boundaries of mined -12
out parcel areas. These electronic maps shal l not be relied upon to determine actual 13
boundaries of mined-out parcel areas. Property boundaries contained in mine maps 14
required under KRS Chapters 350 and 352 shall not be construed to constitute land 15
surveying or boundary surveys as defined by KRS 322. 010 and any administrative 16
regulations promulgated thereto. 17