Qualifying Pipeline Credit
INCOME TAXPAYER-Effective for all taxable years commencing after Dec. 31, 2005 and before Jan. 1, 2011.
An income taxpayer that makes a qualified investment in a new qualifying pipeline shall be allowed a tax credit.
Qualifications
Before making a qualified investment, a taxpayer shall apply to the Secretary of Commerce to enter into an agreement for this tax credit. After receipt of the application the Secretary of Commerce may enter into an agreement with the applicant for a credit if it is determined that the taxpayer’s proposed investment satisfies the requirements.
Credit Amount
The credit is 10 percent of the taxpayer’s qualified investment on the first $250 million invested, and 5 percent of the taxpayer’s qualified investment that exceeds $250 million. The credit will be taken in ten equal, annual installments, beginning with the year in which the taxpayer placed into service the new qualifying pipeline.
Limitation of Credit
If the amount of the credit exceeds the taxpayer’s tax liability in any one taxable year, the remaining portion of the credit may be carried forward until the total amount of the credit is used, except that no such tax credit shall be carried over for deduction after the 14th taxable year after the taxable year in which the first annual installment is allowed.
Procedures to Claim the Credit
You may download Schedule K-77 to claim the qualifying pipeline credit. This schedule must be completed and submitted with the income tax return. You may also call the Department of Revenue voice mail system at 785-296-4937 to request Schedule K-77. You will be asked to give your name, address, phone number and form(s) you desire. Please allow two weeks for delivery of your forms.
Qualified Investment
Qualified investment means expenditures made in construction of a new qualifying pipeline for real and tangible personal property incorporated in and used as part of the pipeline.
New Qualifying Pipeline
New qualifying pipeline means a qualifying pipeline, construction of which begins after Dec. 31, 2005.
Qualiyfing Pipeline
Qualifying pipeline means a pipeline which is located in this state, is used primarily for transportation of crude oil or natural gas liquids and has a length of more than 190 miles in this state and to which refineries or natural gas liquid processing facilities in this state have access.