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Kentucky Corporate Income Tax is based on the taxable net income of Kentucky business operations. The Kentucky taxable income of a multi-state corporation is determined by applying the state apportionment formula to the total corporation's income before federal income taxes. Kentucky's apportionment formula is computed from the proportions of the corporation's property, payrolls, and sales (destination basis) in Kentucky. The sales factor receives 50% weight in the formula and the property and payroll factors each receive 25%.
Rates:
First $50,000 - 4%
Next 50,000 - 5%
All Over 100,000 - 6%
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| State Corporate Income: The entity must choose the HIGHER of the actual tax rate or the Limited Liability Entity Tax (LLET) rate. The LLET maybe calculated using the LESSER of the two alternatives, which are $0.095/$100 of the ENTIRE gross receipts AMOUNT for companies meeting the $6,000,000 threshold or $0.75/$100 of the ENTIRE Kentucky gross profits AMOUNT for companies exceeding the $6,000,000 threshold. For gross receipts or gross profits under $3,000,000, no LLET is calculated. For gross receipts between $3,000,000 and $6,000,000, the Gross Receipts LLET is calculated as [(Gross Receipts X .00095) - ($2,850 X ($6,000,000 - Gross Receipts) ÷ $3,000,000)]. For gross profits between $3,000,000 and $6,000,000, the Gross Profits LLET is calculated as [(Gross Profits X .0075) - ($22,500 X ($6,000,000 - Gross Receipts) ÷ $3,000,000)].
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