{"data":{"id":"us-ky/krs-141.402","jurisdiction":"us-ky","citation":"KRS 141.402","heading":"Taxing provisions governing approved companies under Subchapter 25 of","body":"KRS Chapter 154.\n(1) As used in this section, unless the context requires otherwise:\n(a) \"Approved company\" shall have the same meaning as set forth in KRS\n154.25-010;\n(b) \"Jobs retention project\" shall have the same meaning as set forth in KRS\n154.25-010;\n(c) \"Kentucky gross receipts\" means Kentucky gross receipts as defined in KRS\n141.0401;\n(d) \"Kentucky gross profits\" means Kentucky gross profits as defined in KRS\n141.0401; and\n(e) \"Tax credit\" means the tax credit allowed in KRS 154.25-030.\n(2) An approved company shall determine the income tax credit as provided in this\nsection.\n(3) An approved company which is an individual sole proprietorship subject to tax\nunder KRS 141.020 or a corporation or pass -through entity treated as a corporation\nfor federal income tax purposes subject to tax under KRS 141.040(1) shall:\n(a) 1. Compute the tax due at the applicable tax rates as provided by KRS\n141.020 or 141.040 on net income as d efined by KRS 141.010 or\ntaxable net income as defined by KRS 141.010, including income from\nthe jobs retention project;\n2. Compute the limited liability entity tax imposed under KRS 141.0401,\nincluding Kentucky gross profits or Kentucky gross receipts fro m the\njobs retention project; and\n3. Add the amounts computed under subparagraphs 1. and 2. of this\nparagraph and, if applicable, subtract the credit permitted by KRS\n141.0401(3) from that sum. The resulting amount shall be the net tax for\npurposes of this paragraph.\n(b) 1. Compute the tax due at the applicable tax rates as provided by KRS\n141.020 or 141.040 on net income as defined by KRS 141.010 or\ntaxable net income as defined by KRS 141.010, excluding net income\nattributable to the jobs retention project;\n2. Using the sam e method used under subparagraph 2. of paragraph (a) of\nthis subsection, compute the limited liability entity tax imposed under\nKRS 141.0401, excluding Kentucky gross profits or Kentucky gross\nreceipts from the jobs retention project; and\n3. Add the amount s computed under subparagraphs 1. and 2. of this\nparagraph and, if applicable, subtract the credit permitted by KRS\n141.0401(3) from that sum. The resulting amount shall be the net tax for\npurposes of this paragraph.\n(c) The tax credit shall be the amount by which the net tax computed under\nparagraph (a)3. of this subsection exceeds the tax computed under paragraph\n(b)3. of this subsection; however, the credit shall not exceed the limits set\nforth in KRS 154.25-030.\n(4) (a) Notwithstanding any other provisi ons of this chapter, an approved company\nwhich is a pass-through entity not subject to the tax imposed by KRS 141.040\nor trust not subject to the tax imposed by KRS 141.040 shall be subject to\nincome tax on the net income attributable to a jobs retention p roject at the\nrates provided in KRS 141.020(2).\n(b) The amount of the tax credit shall be determined as provided in subsection (3)\nof this section. Upon the annual election of the approved company, in lieu of\nthe tax credit, an amount shall be applied as an estimated tax payment equal to\nthe tax computed in this section. Any estimated tax payment made pursuant to\nthis paragraph shall be in satisfaction of the tax liability of the partners,\nmembers, shareholders, or beneficiaries of the pass-through entity or trust, and\nshall be paid on behalf of the partners, members, shareholders, or\nbeneficiaries.\n(c) The tax credit or estimated payment shall not exceed the limits set forth in\nKRS 154.25-030.\n(d) If the tax computed in this section exceeds the tax credit, the difference shall\nbe paid by the pass -through entity or trust at the times provided by KRS\n141.160 for filing the returns.\n(e) Any estimated tax payment made by the pass -through entity or trust in\nsatisfaction of the tax liability of partners, members, shareholders, or\nbeneficiaries shall not be treated as taxable income subject to Kentucky\nincome tax by the partner, member, shareholder, or beneficiary.\n(5) Notwithstanding any other provisions of this chapter, the net income subject to tax,\nthe tax credi t, and the estimated tax payment determined under subsection (4) of\nthis section shall be excluded in determining each partner's, member's,\nshareholder's, or beneficiary's distributive share of net income or credit of a pass -\nthrough entity or trust.\n(6) (a) Net income attributable to the project for the purposes of subsections (3), (4),\nand (5) of this section shall be determined under the separate accounting\nmethod reflecting only the gross income, deductions, expenses, gains, and\nlosses allowed under KRS Chapter 141 directly attributable to the facility and\noverhead expenses apportioned to the facility; and\n(b) Kentucky gross receipts or Kentucky gross profits attributable to the project\nfor purposes of subsection (3) of this section shall be determined un der the\nseparate accounting method reflecting only the Kentucky gross receipts or\nKentucky gross profits directly attributable to the facility.\n(7) If an approved company can show to the satisfaction of the Department of Revenue\nthat the nature of the oper ations and activities of the approved company are such\nthat it is not practical to use the separate accounting method to determine the net\nincome, Kentucky gross receipts, or Kentucky gross profits from the facility at\nwhich the jobs retention project is l ocated, the approved company shall determine\nnet income, Kentucky gross receipts, or Kentucky gross profits from the jobs\nretention project using an alternative method approved by the Department of\nRevenue.\n(8) The Department of Revenue may promulgate administrative regulations and require\nthe filing of forms designed by the Department of Revenue to reflect the intent of\nthis section and KRS 154.25-010 to 154.25-050 and the allowable income tax credit\nwhich an approved company may retain under this section and KRS 154.25-010 to\n154.25-050.","path":["KRS Chapter 141"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=49198","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:50:35Z","sha256":"870caf3c83f4191076d23687b4bff9953a26a8dbc0cff522d8c7db1e8111a0b1","source_id":"us-ky","stale":false,"prev":"us-ky/krs-141.401","next":"us-ky/krs-141.403"},"notice":"GroundRules: Original legal text. Not legal advice."}