{"data":{"id":"us-ky/krs-136.540","jurisdiction":"us-ky","citation":"KRS 136.540","heading":"Calculation of payroll factor.","body":"(1) The payroll factor is a fraction the numerator of which is the total amount paid in\nthis Commonwealth during the taxable year by the financial institution for\ncompensation and the denominator of which is the total compensation paid both\nwithin and without this Commonwealth during the taxable year.\n(2) The compensation of any employee for services or activities which are not\nconnected with business activities and payments made to any independent\ncontractor or any other person not properly classifiable as an employee shall be\nexcluded from both the numerator and denominator of the factor.\n(3) Compensation is paid in this Commonwealth if any one of the following tests is\nmet:\n(a) The employee's services are performed entirely within this Commonwealth.\n(b) The e mployee's services are performed both within and without the\nCommonwealth, but the service performed without the Commonwealth is\nincidental to the employee's service within the Commonwealth. The term\n\"incidental\" means any service which is temporary or tra nsitory in nature, or\nwhich is rendered in connection with an isolated transaction.\n(c) If the employee's services are performed both within and without this\nCommonwealth, the employee's compensation will be attributed to this\nCommonwealth if:\n1. The emplo yee's principal base of operations is within this\nCommonwealth;\n2. There is no principal base of operations in any state in which some part\nof the services are performed, but the place from which the services are\ndirected or controlled is in this Commonwealth; or\n3. The principal base of operations and the place from which the services\nare directed or controlled are not in any state in which some part of the\nservice is performed but the employee's residence is in this\nCommonwealth.","path":["KRS Chapter 136"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=28573","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:50:27Z","sha256":"10693f09e856562c949980cc024a19c389032e6f4ea7f4e7d4a72c94bdff10f2","source_id":"us-ky","stale":false,"prev":"us-ky/krs-136.535","next":"us-ky/krs-136.545"},"notice":"GroundRules: Original legal text. Not legal advice."}