Kentucky Application and Credit Certificate of Income Tax / LLET Credit Railroad Expansion

Application and Credit Certificate of Income Tax / LLET Credit Railroad Expansion
Schedule RR-E
SCHEDULE

RR-E

APPLICATION AND CREDIT CERTIFICATE
OF INCOME TAX/LLET CREDIT
RAILROAD EXPANSION

Commonwealth of Kentucky
Department of Revenue

	 See instructions.
	 Attach to Form 720 or 720U.

			

Name of Entity

KRS 141.386 and 141.387

Federal Identification
Number

Kentucky Corporation/LLET
Account Number (if applicable)

__ __ __ __ __ __

__ __ __ __ __ __ __ __ __

Mailing Address

	 Entity:	
Corporation 	
			

Location Address

2023

Railway Company taxed under
KRS 136.120

Part I—Qualifications
1	
	
	
	
	

Yes

Were the “qualified expenditures” made by an entity that was not: (i) a corporation
that owns fossil energy resources subject to tax under KRS 143.020 or 143A.020 or
biomass resources and transports these using rail facilities; or (ii) a railway company
subject to tax per KRS 136.120 that serves a corporation that owns fossil energy
resources subject to tax per KRS 143.020 or 143A.020 or biomass resources?.............................

No

2	 Was a tax credit claimed per KRS 141.385 on the same“qualified expenditures”?......................... 	
3	 Was a tax credit claimed per KRS 141.385 or 141.386 by another taxpayer on the
	
same “qualified expenditures”?........................................................................................................
If you answered “yes” to any of the questions above, STOP; you do not qualify for this credit.
If you answered “no” to ALL of the questions above, go to Part II.
Part II—Computation of the Credit
1	 Enter the qualified expenditures paid or incurred by the corporation or
	 railway company for the calendar year.............................................................................................. 	1
2	 Enter 25% of line 1............................................................................................................................ 	2

00
00

I, the undersigned, declare under the penalties of perjury, that I have examined this application, including all accompanying schedules and statements,
and to the best of my knowledge and belief, it is true, correct, and complete.

	

Signature	

Title	Date

	

Contact Name (if different from signer)	

Email Address

	

Telephone Number	

Fax Number

Department of Revenue Use Only
Part III—Railroad Expansion Approved Credit Certificate
1	(a)	Requested credit for corporation or
		
railway company (numerator) ......................... (a) 	
	 (b)	 Total requested credit for all corporations
		
and railway companies (denominator) .......... (b)

(	 

(a)
(b)

    )

	
x  $1,000,000  =
Approved Credit

By:  ________________________________________ 	 Date:  _______________________
TAXPAYER USE ONLY
Part IV—Railroad Expansion Credit Used By Taxpayer
1 LLET Credit—Enter on Schedule TCS, Part II, Column E ........................................................... 	 1

00

2 Corporation Income Tax Credit—Enter on Schedule TCS, Part II, Column F ...........................	
No Carryforward Allowed

00

230317 41A720RR-E (10-23)	

2
Page 1 of 2

Schedule RR-E
(2023)

INSTRUCTIONS FOR SCHEDULE RR–E

Page 2 of 2

The railroad expansion credit per KRS 141.386 is a nonrefundable credit that can be applied against the corporation income tax imposed by
KRS 141.040 and the limited liability entity tax (LLET) imposed by KRS 141.0401. The tax credit must be used in the tax year of the qualified
expenditures which generated the tax credit and cannot be carried forward to a return for any other period. If a qualified expenditure qualifies
for both the railroad maintenance and improvement credit per KRS 141.385 and the railroad expansion tax credit per KRS 141.386, the taxpayer
must claim either the credit per KRS 141.385 or the credit per KRS 141.386, but not both.

Purpose of Schedule— This schedule is used to compute
the railroad expansion credit. An eligible taxpayer means: (i) a
corporation that owns fossil energy resources subject to tax under
KRS 143.020 or 143A.020 or biomass resources and transports
these resources using rail facilities; or (ii) a railway company subject
to tax under KRS 136.120 that serves a corporation that owns fossil
energy resources subject to tax under KRS 143.020 or 143A.020
or biomass resources.
Fossil energy resources means reserves of coal, oil shale, and
natural gas; and biomass resources means agriculture materials
that may be used for production of transportation fuels such as
biodiesel or ethanol or that may themselves be used as a fuel,
alone or in combination with a fossil fuel, for generation of electricity.
The railroad expansion tax credit is an amount equal to 25% of
the qualified expenditures paid or incurred by the corporation or
railway company during the tax year to expand or upgrade railroad
track, including roadbeds, bridges, and related track structures, to
accommodate the transport of fossil energy resources or biomass
resources.
The credit amount approved for a calendar year for all taxpayers
per KRS 141.386 is limited to $1,000,000. If the total amount
of approved credit exceeds $1,000,000, the department will
determine the amount of credit each corporation and railway
company receives by multiplying the $1,000,000 by a fraction,
the numerator of which is the amount of the approved credit for a
corporation or railway company and the denominator of which is
the total approved credit for all corporations and railway companies.
Each corporation or railway company eligible for the credit must file
a railroad expansion tax credit claim on this form by the fifteenth day
of the first month following the close of the preceding calendar year.
To ensure proper processing, fax or email Schedule RR-E to the
Department of Revenue no later than January 15 following the
close of the preceding calendar year. Credit certification cannot
be guaranteed for schedules sent through regular mail. Schedules
postmarked or sent after January 15 are void.
Fax number:
502–564–0058
Email address:
[email protected]

The Department of Revenue will confirm receipt of the application. If
you do not receive confirmation within two weeks of submitting the
application, contact the Division of Corporation Tax at 502– 564–8139
or via email at [email protected] .
The Department of Revenue will issue the credit certificate, listing
the amount of credit, by March 15 following the close of the
preceding calendar year. Attach the credit certificate (Schedule
RR–E) to the tax return claiming the credit.
41A720RR-E (10-23)	

General Instructions—Enter the name, mailing address, and
business location address in applicable boxes. Enter the Federal
Identification Number and Kentucky Corporation/LLET Account
Number in applicable boxes. Check the appropriate entity type.
This application must be signed and dated by an authorized
corporate officer (if filing Form 720 or 720U) or partner or member
(if filing Form PTE).
Part I—Qualifications
The tax credit per KRS 141.386 must be claimed in the tax year
that the qualified expenditures are paid or incurred by the eligible
taxpayer. You must be: (i) a corporation that owns fossil energy
resources subject to tax per KRS 143.020 or 143A.020 or biomass
resources and transports these resources using rail facilities; or
(ii) a railway company subject to tax per KRS 136.120 that serves
a corporation that owns fossil energy resources subject to tax per
KRS 143.020 or 143A.020 or biomass resources. If you have taken
the railroad maintenance and improvement tax credit per KRS
141.385 on the same qualified expenditures, you do not qualify for
this credit. If a tax credit was claimed per KRS 141.385 or 141.386
by another taxpayer on the same qualified expenditures, you do
not qualify for this credit.
Part II—Computation of the Credit
Line 1—Enter the “qualified expenditures” paid or incurred by the
corporation or railway company for the calendar year. Qualified
expenditures are expenditures paid or incurred to expand or
upgrade railroad track, including roadbeds, bridges, and related
track structures, to accommodate the transport of fossil energy
resources or biomass resources.
Line 2—Enter twenty–five percent (25%) of Line 1.
Part III—Railroad Expansion Approved Credit Certificate
The Department of Revenue determines each corporation’s or
railway company’s approved credit. If the total approved credit
for all corporations and railway companies exceeds the railroad
expansion tax credit cap of $1,000,000 for the calendar year, the
department will determine the amount of credit each corporation
or railway company receives by multiplying the $1,000,000 by a
fraction, the numerator (Line 1(a)) of which is the amount of the
requested credit by a corporation or railway company and the
denominator (Line 1(b)) of which is the total requested credit by
all corporations and railway companies.
Part IV—Railroad Expansion Credit Used By Taxpayer
Line 1—Enter the amount of the credit claimed for the taxable
year against the LLET on Schedule TCS, Part II, Column E. The
credit amount cannot reduce the LLET below the $175 minimum.
Line 2—Enter the amount of the credit claimed for the taxable
year against the corporation income tax on Schedule TCS, Part
II, Column F.
	
A pass-through entity must include on each Schedule K-1 the
partner’s or member’s pro rata share of the approved credit.