{"data":{"id":"us-ky/krs-141.200","jurisdiction":"us-ky","citation":"KRS 141.200","heading":"Corporation returns -- Requirement of affiliated groups to file","body":"consolidated returns.\n(1) Subsections (2) to (7) of this section shall apply for taxable periods ending before\nJanuary 1, 2005, and election periods beginning prior to January 1, 2005.\n(2) As used in subsections (2) to (7) of this section, unless the context requires\notherwise:\n(a) \"Affiliated group\" means affiliated group as defined in Section 1504(a) of the\nInternal Revenue Code and related regulations;\n(b) \"Consolidated return\" m eans a Kentucky corporation income tax return filed\nby members of an affiliated group in accordance with this section. The\ndeterminations and computations required by this chapter shall be made in\naccordance with the provisions of Section 1502 of the Inter nal Revenue Code\nand related regulations, except as required by differences between this chapter\nand the Internal Revenue Code. Corporations exempt from taxation under\nKRS 141.040 shall not be included in the return;\n(c) \"Separate return\" means a Kentucky corporation income tax return in which\nonly the transactions and activities of a single corporation are considered in\nmaking all determinations and computations necessary to calculate taxable net\nincome, tax due, and credits allowed in accordance with the provisions of this\nchapter;\n(d) \"Corporation\" means \"corporation\" as defined in Section 7701(a)(3) of the\nInternal Revenue Code; and\n(e) \"Election period\" means the ninety -six (96) month period provided for in\nsubsection (4)(d) of this section.\n(3) Every corporation doing business in this state, except those exempt from taxation\nunder KRS 141.040, shall, for each taxable year, file a separate return unless the\ncorporation was, for any part of the taxable year, a member of an affiliated group\nelecting to fil e a consolidated return in accordance with subsection (4) of this\nsection.\n(4) (a) An affiliated group, whether or not filing a federal consolidated return, may\nelect to file a consolidated return which includes all members of the affiliated\ngroup.\n(b) An affiliated group electing to file a consolidated return under paragraph (a) of\nthis subsection shall be treated for all purposes as a single corporation under\nthe provisions of this chapter. All transactions between corporations included\nin the consolidated return shall be eliminated in computing net income and in\ndetermining the property, payroll, and sales factors in accordance with KRS\n141.901. The gross receipts received by a public service company that is a\nmember of an affiliated group shall be exclud ed from the calculation of the\nalternative minimum calculation under the provisions of KRS 141.040. For\npurposes of this paragraph, \"public service company\" has the same meaning as\nprovided in KRS 136.120.\n(c) Any election made in accordance with paragraph (a) of this subsection shall be\nmade on a form prescribed by the department and shall be submitted to the\ndepartment on or before the due date of the return including extensions for the\nfirst taxable year for which the election is made.\n(d) Notwithstanding subsections (9) to (15) of this section, any election to file a\nconsolidated return pursuant to paragraph (a) of this subsection shall be\nbinding on both the department and the affiliated group for a period beginning\nwith the first month of the first taxable year for which the election is made and\nending with the conclusion of the taxable year in which the ninety -sixth\nconsecutive calendar month expires.\n(e) For each taxable year for which an affiliated group has made an election in\naccordance with paragraph (a) of this subsection, the consolidated return shall\ninclude all corporations which are members of the affiliated group.\n(5) Each corporation included as  part of an affiliated group filing a consolidated return\nshall be jointly and severally liable for the income tax liability computed on the\nconsolidated return, except that any corporation which was not a member of the\naffiliated group for the entire taxa ble year shall be jointly and severally liable only\nfor that portion of the Kentucky consolidated income tax liability attributable to that\nportion of the year that the corporation was a member of the affiliated group.\n(6) Every corporation return or report required by this chapter shall be executed by one\n(1) of the following officers of the corporation: the president, vice president,\nsecretary, treasurer, assistant secretary, assistant treasurer, or chief accounting\nofficer. The Department of Revenue may require a further or supplemental report of\nfurther information and data necessary for computation of the tax.\n(7) In the case of a corporation doing business in this state that carries on transactions\nwith stockholders or with other corporations related b y stock ownership, by\ninterlocking directorates, or by some other method, the department shall require\ninformation necessary to make possible accurate assessment of the income derived\nby the corporation from sources within this state. To make possible such\nassessment, the department may require the corporation to file supplementary\nreturns showing information respecting the business of any or all individuals and\ncorporations related by one (1) or more of these methods to the corporation. The\ndepartment may require the return to show in detail the record of transactions\nbetween the corporation and any or all other related corporations or individuals.\n(8) Subsections (9) to (14) of this section shall apply for taxable years beginning on or\nafter January 1, 2005, but prior to January 1, 2019.\n(9) As used in subsections (9) to (14) of this section:\n(a) 1. For taxable years beginning after December 31, 2004, and before\nJanuary 1, 2007, \"affiliated group\" means one (1) or more chains of\nincludible corporations connected through stock ownership, membership\ninterest, or partnership interest with a common parent corporation which\nis an includible corporation if:\na. The common parent owns directly an ownership interest meeting\nthe requirements of subparagraph 2. of this  paragraph in at least\none (1) other includible corporation; and\nb. An ownership interest meeting the requirements of subparagraph\n2. of this paragraph in each of the includible corporations,\nexcluding the common parent, is owned directly by one (1) or\nmore of the other corporations.\n2. The ownership interest of any corporation meets the requirements of this\nparagraph if the ownership interest encompasses at least eighty percent\n(80%) of the voting power of all classes of ownership interests and has a\nvalue equal to at least eighty percent (80%) of the total value of all\nownership interests;\n(b) 1. For taxable years beginning after December 31, 2006, but prior to\nJanuary 1, 2019, \"affiliated group\" means one (1) or more chains of\nincludible corporations conn ected through stock ownership with a\ncommon parent corporation which is an includible corporation if:\na. The common parent owns directly stock meeting the requirements\nof subparagraph 2. of this paragraph in at least one (1) other\nincludible corporation; and\nb. Stock meeting the requirements of subparagraph 2. of this\nparagraph in each of the includible corporations, excluding the\ncommon parent, is owned directly by one (1) or more of the other\ncorporations.\n2. The stock of any corporation meets the require ments of this paragraph if\nthe stock encompasses at least eighty percent (80%) of the voting power\nof all classes of stock and has a value equal to at least eighty percent\n(80%) of the total value of all stock;\n(c) \"Common parent corporation\" means the mem ber of an affiliated group that\nmeets the ownership requirement of paragraph (a)1. or (b)1. of this\nsubsection;\n(d) \"Foreign corporation\" means a corporation that is organized under the laws of\na country other than the United States and is related to a mem ber of an\naffiliated group through stock ownership;\n(e) \"Includible corporation\" means any corporation that is doing business in this\nstate except:\n1. Corporations exempt from corporation income tax under KRS 141.040;\n2. Foreign corporations;\n3. Corporations with respect to which an election under Section 936 of the\nInternal Revenue Code is in effect for the taxable year;\n4. Real estate investment trusts as defined in Section 856 of the Internal\nRevenue Code;\n5. Regulated investment companies as defined in Section 851 of the\nInternal Revenue Code;\n6. A domestic international sales company as defined in Section 992(a)(1)\nof the Internal Revenue Code;\n7. Any corporation that realizes a net operating loss whose apportionment\nfraction under KRS 141.120 is de minimis;\n8. Any corporation for which the apportionment fraction under KRS\n141.120 is zero; and\n9. For taxable years beginning prior to January 1, 2006, and taxable years\nbeginning on or after January 1, 2007, an S corporation as defined in\nSection 1361(a) of the Internal Revenue Code;\n(f) \"Ownership interest\" means stock, a membership interest in a lim ited liability\ncompany, or a partnership interest in a limited partnership or limited liability\npartnership;\n(g) \"Consolidated return\" means a Kentucky corporation income tax return filed\nby members of an affiliated group in accordance with this section. T he\ndeterminations and computations required by this chapter shall be made in\naccordance with the provisions of the Internal Revenue Code and related\nregulations, except as required by differences between this chapter and the\nInternal Revenue Code;\n(h) \"Separate return\" means a Kentucky corporation income tax return in which\nonly the transactions and activities of a single corporation are considered in\nmaking all determinations and computations necessary to calculate taxable net\nincome, tax due, and credits allowed in accordance with the provisions of this\nchapter; and\n(i) \"Stock\" means stock in a corporation, or a membership interest in a limited\nliability company that has elected to be treated as a corporation for federal tax\npurposes.\n(10) Every corporation doing business in this state except those exempt from taxation\nunder KRS 141.040 shall, for each taxable year, file a separate return unless the\ncorporation was, for any part of the taxable year:\n(a) An includible corporation in an affiliated group;\n(b) A common parent corporation doing business in this state;\n(c) A qualified subchapter S Subsidiary that is included in the return filed by the\nSubchapter S parent corporation;\n(d) A qualified real estate investment trust subsidiary that is included in the return\nfiled by the real estate investment trust parent; or\n(e) A disregarded entity that is included in the return filed by its parent entity.\n(11) (a) An affiliated group, whether or not filing a federal consolidated return, shall\nfile a consolidated return which includes all includible corporations.\n(b) An affiliated group required to file a consolidated return under this subsection\nshall be treated for all purposes as a single corporation under the provisions of\nthis chapter. All transactions between cor porations included in the\nconsolidated return shall be eliminated in computing net income and in\ndetermining the property, payroll, and sales factors in accordance with KRS\n141.901 or the apportionment fraction in accordance with KRS 141.120.\n(c) For taxable years beginning on or after January 1, 2005, and before January 1,\n2019, includible corporations that have incurred a net operating loss shall not\ndeduct an amount that exceeds, in the aggregate, fifty percent (50%) of the\nincome realized by the remaining includible corporations that did not realize a\nnet operating loss. The portion of any net operating loss limited by the\napplication of this subsection shall be available for carryforward in accordance\nwith KRS 141.011. The department shall promulgate ad ministrative\nregulations to establish the manner and extent to which net operating losses\nattributable to tax periods ending prior to January 1, 2005, may offset income\nof affiliated groups.\n(d) The gross receipts received by a public service company that is a member of\nan affiliated group shall be excluded from the calculation of the alternative\nminimum calculation under KRS 141.040. For purposes of this paragraph,\n\"public service company\" has the same meaning as provided in KRS 136.120.\n(12) Each includib le corporation included as part of an affiliated group filing a\nconsolidated return shall be jointly and severally liable for the income tax liability\ncomputed on the consolidated return, except that any includible corporation which\nwas not a member of the  affiliated group for the entire taxable year shall be jointly\nand severally liable only for that portion of the Kentucky consolidated income tax\nliability attributable to that portion of the year that the corporation was a member of\nthe affiliated group.\n(13) Every corporation return or report required by this chapter shall be executed by one\n(1) of the following officers or management of the corporation: the president, vice\npresident, secretary, treasurer, assistant secretary, assistant treasurer, chief\naccounting officer, manager, member, or partner. The department may require a\nfurther or supplemental report of further information and data necessary for\ncomputation of the tax.\n(14) In the case of a corporation doing business in this state that carries on  transactions\nwith stockholders, members or partners, or with other corporations related by\nownership, by interlocking directorates, or by some other method, the department\nshall require that information necessary to make possible an accurate assessment of\nthe income derived by the corporation from sources within this state be provided.\nTo make possible this assessment, the department may require the corporation to\nfile supplementary returns showing information respecting the business of any or all\nindividuals and corporations related by one (1) or more of these methods to the\ncorporation. The department may require the return to show in detail the record of\ntransactions between the corporation and any or all other related corporations or\nindividuals.\n(15) This section shall not be construed to limit or otherwise impair the department's\nauthority under KRS 141.205.","path":["KRS Chapter 141"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=47387","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:50:34Z","sha256":"e9573a2be34b5a5e8bce73185542a9127e769b3ec0bfc07d5147b5749bb080a0","source_id":"us-ky","stale":false,"prev":"us-ky/krs-141.190","next":"us-ky/krs-141.201"},"notice":"GroundRules: Original legal text. Not legal advice."}