KRS 136.525: Apportionment of net capital for financial institutions with taxable

business activity within and without the Commonwealth.

(1) A financial institution whose business activity is taxable both within and without

this Commonwealth shall apportion its ne t capital pursuant to the provisions of this

section.

(2) Net capital shall be apportioned to this Commonwealth by multiplying total net

capital by the apportionment percentage. The apportionment percentage is

determined by adding together the financial in stitution's receipts factor as

determined under the provisions of KRS 136.530, property factor as determined

under the provisions of KRS 136.535, and payroll factor as determined under the

provisions of KRS 136.540 and dividing the sum by three (3). If one (1) of the

factors is missing, the two (2) remaining factors are added and the sum is divided by

two (2). If two (2) of the factors are missing, the remaining factor is the

apportionment percentage. A factor is missing if both its numerator and

denominator are zero (0), but it is not missing merely because the numerator is zero

(0).

(3) Each factor shall be calculated by the method of accounting used by the financial

institution for the taxable year.

(4) If the apportionment provisions of KRS 136.500 to 13 6.575 do not fairly represent

the extent of the financial institution's business activity in this Commonwealth, the

financial institution may petition for or the department may require, in respect to all

or any part of the financial institution's business activity, if reasonable:

(a) Separate accounting;

(b) The exclusion of any one (1) or more of the factors;

(c) The inclusion of one (1) or more additional factors which will fairly represent

the financial institution's business activity in this Commonwealth; or

(d) The employment of any other method to effectuate an equitable apportionment

of the financial institution's net capital.