As used in KRS § 67.750 to KRS § 67.790, unless the context requires otherwise:
(1) “Business entity” means each separate corporation, limited liability company, business development corporation, partnership, limited partnership, sole proprietorship, association, joint stock company, receivership, trust, professional service organization, or other legal entity through which business is conducted;
(2) “Compensation” means wages, salaries, commissions, or any other form of remuneration paid or payable by an employer for services performed by an employee, which are required to be reported for federal income tax purposes and adjusted as follows:
(a) Include any amounts contributed by an employee to any retirement, profit sharing, or deferred compensation plan, which are deferred for federal income tax purposes under a salary reduction agreement or similar arrangement, including but not limited to salary reduction arrangements under Section
401(a), 401(k), 402(e), 403(a), 403(b), 408, 414(h), or 457 of the Internal
Revenue Code; and
(b) Include any amounts contributed by an employee to any welfare benefit, fringe benefit, or other benefit plan made by salary reduction or other payment method which permits employees to elect to reduce federal taxable compensation under the Internal Revenue Code, including but not limited to Sections 125 and 132 of the Internal Revenue Code;
(3) “Fiscal year” means “fiscal year” as defined in Section 7701(a)(24) of the Internal
Revenue Code;
(4) “Employee” means any person who renders services to another person or business entity for compensation, including an officer of a corporation and any officer, employee, or elected official of the United States, a state, or any political subdivision of a state, or any agency or instrumentality of any one (1) or more of the above. A person classified as an independent contractor under the Internal Revenue Code shall not be considered an employee;
(5) “Employer” means “employer” as defined in Section 3401(d) of the Internal
Revenue Code;
(6) “Gross receipts” means all revenues or proceeds derived from the sale, lease, or rental of goods, services, or property by a business entity reduced by the following:
(a) Sales and excise taxes paid; and
(b) Returns and allowances;
(7) “Internal Revenue Code” means the Internal Revenue Code in effect on December
31, 2008, as amended;
(8) “Net profit” means gross income as defined in Section 61 of the Internal Revenue Code minus all the deductions from gross income allowed by Chapter 1 of the Internal Revenue Code, and adjusted as follows:
(a) Include any amount claimed as a deduction for state tax or local tax which is computed, in whole or in part, by reference to gross or net income and which
is paid or accrued to any state of the United States, local taxing authority in a state, the District of Columbia, the Commonwealth of Puerto Rico, any territory or possession of the United States, or any foreign country or political subdivision thereof;
(b) Include any amount claimed as a deduction that directly or indirectly is allocable to income which is either exempt from taxation or otherwise not taxed;
(c) Include any amount claimed as a net operating loss carryback or carryforward allowed under Section 172 of the Internal Revenue Code;
(d) Include any amount of income and expenses passed through separately as required by the Internal Revenue Code to an owner of a business entity that is a pass-through entity for federal tax purposes; and
(e) Exclude any amount of income that is exempt from state taxation by the Kentucky Constitution or the Constitution and statutory laws of the United States;
(9) “Sales revenue” means receipts from the sale, lease, or rental of goods, services, or property;
(10) “Tax district” means a city, county, urban-county, charter county, consolidated local government, school district, special taxing district, or any other statutorily created entity with the authority to levy net profits, gross receipts, or occupational license taxes;
(11) “Taxable gross receipts,” in case of a business entity having payroll or sales revenues both within and without a tax district, means gross receipts as defined in subsection (6) of this section, as apportioned under KRS § 67.753;
(12) “Taxable gross receipts,” in case of a business entity having payroll or sales revenue only in one (1) tax district, means gross receipts as defined in subsection (6) of this section;
(13) “Taxable net profit,” in case of a business entity having payroll or sales revenue only in one (1) tax district, means net profit as defined in subsection (8) of this section;
(14) “Taxable net profit,” in case of a business entity having payroll or sales revenue both within and without a tax district, means net profit as defined in subsection (8) of this section, as apportioned under KRS § 67.753; and
(15) “Taxable year” means the calendar year or fiscal year ending during the calendar year, upon the basis of which net income or gross receipts is computed.
Effective: June 27, 2019
History: Amended 2019 Ky. Acts ch. 44, sec. 6, effective June 27, 2019. — Amended
2014 Ky. Acts ch. 92, sec. 36, effective January 1, 2015. — Amended 2009 Ky. Acts ch. 49, sec. 1, effective June 25, 2009. — Amended 2007 Ky. Acts ch. 52, sec. 1, effective June 26, 2007. — Amended 2006 Ky. Acts ch. 149, sec. 197, effective July
12, 2006; and ch. 168, sec. 1, effective July 12, 2006. — Amended 2005 Ky. Acts ch.
153, sec. 1, effective June 20, 2005. — Amended 2004 Ky. Acts ch. 63, sec. 1, effective July 13, 2004. — Created 2003 Ky. Acts ch. 117, sec. 1, effective June 24,
2003.
Legislative Research Commission Note (6/26/2007). 2007 Ky. Acts ch. 52, sec. 3, provides that the amendments to KRS § 67.750 in 2007 Ky. Acts ch. 52, sec. 1, “shall apply to tax years beginning on or after January 1, 2007.”