AN ACT relating to an apprenticeship tax credit.

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AN ACT relating to an apprenticeship 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) "Apprentice": 6
1. Has the same meaning as in KRS 343.010; and 7
2. Is an individual that is a resident of this state; 8
(b) "Apprenticeship program": 9
1. Has the same meaning as in KRS 343.010; and 10
2. Consists of not less than four thousand (4,000) hours over a two (2) 11
year period, and not more than ten thousand (10,000) hou rs over a 12
five (5) year period; 13
(c) "Enhanced incentive county" means a county in this state certified as such 14
by the Kentucky Economic Development Finance Authority pursuant to 15
KRS 154.32-050; and 16
(d) "Qualified employer" means any person that employees a n apprentice 17
under an apprenticeship program. 18
(2) For taxable years beginning on or after January 1, 2027, but before January 1, 19
2031, there shall be allowed a nonrefundable, nontransferable apprenticeship 20
credit against the tax imposed in KRS 141.020 or 1 41.040 and 141.0401, with the 21
ordering of the credit as provided in Section 2 of this Act. 22
(3) A qualified employer that maintains an apprenticeship program shall be allowed 23
a credit equal to the lesser of: 24
(a) Fifty percent (50%) of the wages paid to an apprentice; or 25
(b) One hundred percent (100%) of the expenses incurred in connection with 26
training and education of the apprentice, and includes: 27
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1. Educational programs; 1
2. Classroom expenses; 2
3. Training materials; and 3
4. Instructional costs. 4
(4) The credit is limited to: 5
(a) Two thousand dollars ($2,000) per apprentice; or 6
(b) Three thousand five hundred dollars ($3,500) per apprentice if the: 7
1. Apprentice is a resident of an enhanced incentive county; or 8
2. Qualified employer is located in an enhanced incentive county. 9
(5) If the apprentice is employed for a period less than the full taxable year, the credit 10
allowed in subsections (3) and (4) of this section is prorated based on the number 11
of days the apprentice was employed by the qualified employer for the taxable 12
year. 13
(6) Qualified employers seeking the credit under this section shall provide, at the 14
request of the department: 15
(a) Verification that the apprenticeship program is registered with the 16
Department of Workforce Development; 17
(b) The name and Social Security number of the apprentice; 18
(c) Verification of expenses incurred under subsection (3) of this section; 19
(d) Verification that either the: 20
1. Qualified employer; or 21
2. Apprentice; 22
is located in an enhanced incentive county if the credit is claimed based on 23
county location; and 24
(e) Any other information the department deems necessary. 25
(7) The department shall work cooperatively with the Department of Workforce 26
Development to determin e that the qualified employer and apprentice meet the 27
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requirements established in this section. 1
(8) (a) In order for the General Assembly to evaluate the effectiveness of this tax 2
credit, the department shall report to the Legislative Research Commission 3
and the Interim Joint Committee on Appropriations and Revenue on or 4
before November 1, 2028, and on or before each November 1 thereafter as 5
long as the credit is claimed on a return, the following: 6
1. The number of tax returns, by tax type, claiming the cre dit for each 7
taxable year; 8
2. The total amount of credits claimed for each taxable year; 9
3. The cumulative number of apprentices employed for each taxable 10
year; 11
4. The cumulative total of credit claimed by county, based on the work 12
location for the apprentice hired, for each taxable year; and 13
5. a. In the case of all taxpayers other than corporations, based on 14
ranges of adjusted gross income of no larger than five thousand 15
dollars ($5,000) for the taxable year, the total amount of credit 16
claimed and the to tal number of returns claiming this credit for 17
each income range; and 18
b. In the case of all corporations, based on ranges of net income no 19
larger than fifty thousand dollars ($50,000) for the taxable year, 20
the total amount of credit claimed and the number of returns 21
claiming a credit for each net income range. 22
(b) The information required to be reported under this section shall not be 23
considered confidential taxpayer information and shall not be subject to 24
KRS Chapter 131 or any other provisions of the Kent ucky Revised Statutes 25
prohibiting disclosure or reporting of information. 26
Section 2. KRS 141.0205 is amended to read as follows: 27
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If a taxpayer is entitled to more than one (1) of the tax credits allowed against the tax 1
imposed by KRS 141.020, 141.040, and 141.0401, the priority of application and use of 2
the credits shall be determined as follows: 3
(1) The nonrefundable business incentive credits against the tax imposed by KRS 4
141.020 shall be taken in the following order: 5
(a) The limited liability entity tax credit permitted by KRS 141.0401; 6
(b) The economic development credits computed under KRS 141.347, 141.381, 7
141.384, 141.3841, 141.400, 141.403, 141.407, 141.415, 154.12 -207, and 8
154.12-2088; 9
(c) The qualified farming operation credit permitted by KRS 141.412; 10
(d) The certified rehabilitation credit permitted by KRS 171.397(1)(a); 11
(e) The health insurance credit permitted by KRS 141.062; 12
(f) The tax paid to other states credit permitted by KRS 141.070; 13
(g) The credit for hiring the unemployed permitted by KRS 141.065; 14
(h) The recycling or composting equipment credit permitted by KRS 141.390; 15
(i) The[ tax] credit for cash contributions in investment funds pe rmitted by KRS 16
154.20-263 in effect prior to July 15, 2002, and the credit permitted by KRS 17
154.20-258; 18
(j) The research facilities credit permitted by KRS 141.395; 19
(k) The employer High School Equivalency Diploma program incentive credit 20
permitted under KRS 151B.402; 21
(l) The voluntary environmental remediation credit permitted by KRS 141.418; 22
(m) The biodiesel and renewable diesel credit permitted by KRS 141.423; 23
(n) The clean coal incentive credit permitted by KRS 141.428; 24
(o) The ethanol credit permitted by KRS 141.4242; 25
(p) The cellulosic ethanol credit permitted by KRS 141.4244; 26
(q) The energy efficiency credits permitted by KRS 141.436; 27
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(r) The railroad maintenance and improvement credit permitted by KRS 141.385; 1
(s) The Endow Kentucky credit permitted by KRS 141.438; 2
(t) The New Markets Development Program credit permitted by KRS 141.434; 3
(u) The distilled spirits credit permitted by KRS 141.389; 4
(v) The angel investor credit permitted by KRS 141.396; 5
(w) The film industry credit permitted by KRS 141.3 83 for applications approved 6
on or after April 27, 2018, but before January 1, 2022; 7
(x) The inventory credit permitted by KRS 141.408; 8
(y) The renewable chemical production credit permitted by KRS 141.4231;[ and] 9
(z) The qualified broadband investment [ ta x] credit permitted by KRS 141.391; 10
and 11
(aa) The apprenticeship credit permitted by Section 1 of this Act; 12
(2) After the application of the nonrefundable credits in subsection (1) of this section, 13
the nonrefundable personal tax credits against the tax impo sed by KRS 141.020 14
shall be taken in the following order: 15
(a) The individual credits permitted by KRS 141.020(3); 16
(b) The credit permitted by KRS 141.066; 17
(c) The tuition credit permitted by KRS 141.069; 18
(d) The household and dependent care credit permitted by KRS 141.067; 19
(e) The income gap credit permitted by KRS 141.066; and 20
(f) The Education Opportunity Account Program [ tax] credit permitted by KRS 21
141.522; 22
(3) After the application of the nonrefundable credits provided for in subsection (2) of 23
this section, the refundable credits against the tax imposed by KRS 141.020 shall be 24
taken in the following order: 25
(a) The individual withholding tax credit permitted by KRS 141.350; 26
(b) The individual estimated tax payment credit permitted by KRS 141.305; 27
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(c) The certified rehabilitation credit permitted by KRS 171.3961, 171.3963, and 1
171.397(1)(b); 2
(d) The film industry [ tax] credit permitted by KRS 141.383 for applications 3
approved prior to April 27, 2018, or on or after January 1, 2022; 4
(e) The development area[ tax] credit permitted by KRS 141.398; 5
(f) The decontamination[ tax] credit permitted by KRS 141.419; and 6
(g) The pass-through entity tax credit permitted by KRS 141.209; 7
(4) The nonrefundable credit permitted by KRS 141.0401 shall be applied against the 8
tax imposed by KRS 141.040; 9
(5) The following nonrefundable credits shall be applied against the sum of the tax 10
imposed by KRS 141.040 after subtracting the credit provided for in subsection (4) 11
of this section, and the tax imposed by KRS 141.0401 in the following order: 12
(a) The economic development credits computed under KRS 141.347, 141.381, 13
141.384, 141.3841, 141.400, 141.403, 141.407, 141.415, 154.12 -207, and 14
154.12-2088; 15
(b) The qualified farming operation credit permitted by KRS 141.412; 16
(c) The certified rehabilitation credit permitted by KRS 171.397(1)(a); 17
(d) The health insurance credit permitted by KRS 141.062; 18
(e) The unemployment credit permitted by KRS 141.065; 19
(f) The recycling or composting equipment credit permitted by KRS 141.390; 20
(g) The coal conversion credit permitted by KRS 141.041; 21
(h) The enterprise zone credit permitted by KRS 154.45 -090, for taxable periods 22
ending prior to January 1, 2008; 23
(i) The[ tax] credit for cash contributions to investment funds permitted by KRS 24
154.20-263 in effect prior to July 15, 2002, and the credit permitted by KRS 25
154.20-258; 26
(j) The research facilities credit permitted by KRS 141.395; 27
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(k) The employer High School Equivalency Dip loma program incentive credit 1
permitted by KRS 151B.402; 2
(l) The voluntary environmental remediation credit permitted by KRS 141.418; 3
(m) The biodiesel and renewable diesel credit permitted by KRS 141.423; 4
(n) The clean coal incentive credit permitted by KRS 141.428; 5
(o) The ethanol credit permitted by KRS 141.4242; 6
(p) The cellulosic ethanol credit permitted by KRS 141.4244; 7
(q) The energy efficiency credits permitted by KRS 141.436; 8
(r) The ENERGY STAR home or ENERGY STAR manufactured home credit 9
permitted by KRS 141.437; 10
(s) The railroad maintenance and improvement credit permitted by KRS 141.385; 11
(t) The railroad expansion credit permitted by KRS 141.386; 12
(u) The Endow Kentucky credit permitted by KRS 141.438; 13
(v) The New Markets Development Program credit permitted by KRS 141.434; 14
(w) The distilled spirits credit permitted by KRS 141.389; 15
(x) The film industry credit permitted by KRS 141.383 for applications a pproved 16
on or after April 27, 2018, but before January 1, 2022; 17
(y) The inventory credit permitted by KRS 141.408; 18
(z) The renewable chemical production[ tax] credit permitted by KRS 141.4231; 19
(aa) The Education Opportunity Account Program [ tax] credit permitted by KRS 20
141.522; and 21
(ab) The qualified broadband investment [ tax] credit permitted by KRS 141.391; 22
and 23
(6) After the application of the nonrefundable credits in subsection (5) of this section, 24
the refundable credits shall be taken in the following order: 25
(a) The corporation estimated tax payment credit permitted by KRS 141.044; 26
(b) The certified rehabilitation credit permitted by KRS 171.3961, 171.3963, and 27
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171.397(1)(b); 1
(c) The film industry [ tax] credit permitted by KRS 141.383 for applications 2
approved prior to April 27, 2018, or on or after January 1, 2022; 3
(d) The decontamination[ tax] credit permitted by KRS 141.419; and 4
(e) The pass-through entity tax credit permitted by KRS 141.209. 5
Section 3. KRS 131.190 is amended to read as follows: 6
(1) No present or former commissioner or employee of the department, present or 7
former member of a county board of assessment appeals, present or former property 8
valuation administrator or employee, present or former secretary or employee of the 9
Finance and Administration Cabinet, former secretary or employee of the Revenue 10
Cabinet, or any other person, shall intentionally and without authorization inspect 11
or divulge any information acquired by him or her of the affairs of any person, or 12
information regarding the tax schedules, returns, or reports required to be filed with 13
the department or other proper officer, or any information produced by a hearing or 14
investigation, insofar as the information may have to do with the affairs of the 15
person's business. 16
(2) The prohibition established by subsection (1) of this section shall not extend to: 17
(a) Information required in prosecutions for making false reports or returns of 18
property for taxation, or any other infraction of the tax laws; 19
(b) Any matter properly entered upon any assessment record, or in any way made 20
a matter of public record; 21
(c) Furnishing any taxpayer or his or her properly authorized agent with 22
information respecting his or her own return; 23
(d) Testimony provided by the commissioner or any employee of the department 24
in any court, or the introduction as evidence of returns or reports filed with the 25
department, in an action for violation of state or federal tax laws or in any 26
action challenging state or federal tax laws; 27
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(e) Providing an owner of unmined coal, oil or gas reserves, and other mineral or 1
energy resources assessed under KRS 132.820, or owners of surface land 2
under which the unmined minerals lie, factual information about the owner's 3
property derived from third-party returns filed for that owner's property, under 4
the provisions of KRS 132.820, that is used to determine the owner's 5
assessment. This information shall be provided to the owner on a confidential 6
basis, and the owner shall be subject to the penalties pr ovided in KRS 7
131.990(2). The third -party filer shall be given prior notice of any disclosure 8
of information to the owner that was provided by the third-party filer; 9
(f) Providing to a third -party purchaser pursuant to an order entered in a 10
foreclosure act ion filed in a court of competent jurisdiction, factual 11
information related to the owner or lessee of coal, oil, gas reserves, or any 12
other mineral resources assessed under KRS 132.820. The department may 13
promulgate an administrative regulation establishin g a fee schedule for the 14
provision of the information described in this paragraph. Any fee imposed 15
shall not exceed the greater of the actual cost of providing the information or 16
ten dollars ($10); 17
(g) Providing information to a licensing agency, the Trans portation Cabinet, or 18
the Kentucky Supreme Court under KRS 131.1817; 19
(h) Statistics of gasoline and special fuels gallonage reported to the department 20
under KRS 138.210 to 138.448; 21
(i) Providing any utility gross receipts license tax return information tha t is 22
necessary to administer the provisions of KRS 160.613 to 160.617 to 23
applicable school districts on a confidential basis; 24
(j) Providing documents, data, or other information to a third party pursuant to an 25
order issued by a court of competent jurisdiction; 26
(k) Publishing administrative writings on its official website in accordance with 27
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KRS 131.020(1)(b); or 1
(l) Providing information to the Legislative Research Commission under: 2
1. KRS 139.519 for purposes of the sales and use tax refund on building 3
materials used for disaster recovery; 4
2. KRS 141.436 for purposes of the energy efficiency products credits; 5
3. KRS 141.437 for purposes of the ENERGY STAR home and the 6
ENERGY STAR manufactured home credits; 7
4. KRS 141.383 for purposes of the film industry incentives; 8
5. KRS 154.26 -095 for purposes of the Kentucky industrial revitalization 9
credit and the job assessment fees; 10
6. KRS 141.068 for purposes of the Kentucky investment fund; 11
7. KRS 141.396 for purposes of the angel investor credit; 12
8. KRS 141.389 for purposes of the distilled spirits credit; 13
9. KRS 141.408 for purposes of the inventory credit; 14
10. KRS 141.390 for purposes of the recycling and composting credits; 15
11. KRS 141.3841 for purposes of the selling farmer credit; 16
12. KRS 141.4231 for purposes of the renewable chemical production 17
credit; 18
13. KRS 141.524 for purposes of the Education Opportunity Account 19
Program credit; 20
14. KRS 141.398 for purposes of the development area credit; 21
15. KRS 139.516 for purposes of the sales and use tax exemptions for the 22
commercial mining of cryptocurrency; 23
16. KRS 141.419 for purposes of the decontamination credit; 24
17. KRS 141.391 for purposes of the qualified broadband investment credit; 25
18. KRS 139.499 for purposes of the sales and use tax exemptions for a 26
qualified data center project;[ and] 27
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19. KRS 139.5325 for purposes of the sales and use tax incentive for a 1
qualifying attraction; and 2
20. Section 1 of this Act for purposes of the apprenticeship credit. 3
(3) The commissioner shall make available any information for official use only and on 4
a confidential basis to the proper officer, agency, board or commission of this state, 5
any Kentucky county, any Kentucky city, any other state, or the federa l 6
government, under reciprocal agreements whereby the department shall receive 7
similar or useful information in return. 8
(4) Access to and inspection of information received from the Internal Revenue Service 9
is for department use only, and is restricted to tax administration purposes. 10
Information received from the Internal Revenue Service shall not be made available 11
to any other agency of state government, or any county, city, or other state, and 12
shall not be inspected intentionally and without authorization by any present 13
secretary or employee of the Finance and Administration Cabinet, commissioner or 14
employee of the department, or any other person. 15
(5) Statistics of crude oil as reported to the department under the crude oil excise tax 16
requirements of KRS C hapter 137 and statistics of natural gas production as 17
reported to the department under the natural resources severance tax requirements 18
of KRS Chapter 143A may be made public by the department by release to the 19
Energy and Environment Cabinet, Department for Natural Resources. 20
(6) Notwithstanding any provision of law to the contrary, beginning with mine -map 21
submissions for the 1989 tax year, the department may make public or divulge only 22
those portions of mine maps submitted by taxpayers to the department p ursuant to 23
KRS Chapter 132 for ad valorem tax purposes that depict the boundaries of mined -24
out parcel areas. These electronic maps shall not be relied upon to determine actual 25
boundaries of mined -out parcel areas. Property boundaries contained in mine maps 26
required under KRS Chapters 350 and 352 shall not be construed to constitute land 27
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surveying or boundary surveys as defined by KRS 322.010 and any administrative 1
regulations promulgated thereto. 2