{"data":{"id":"us-ky/krs-143.010","jurisdiction":"us-ky","citation":"KRS 143.010","heading":"Definitions for chapter.","body":"As used in this chapter:\n(1) \"Department\" means the Department of Revenue;\n(2) \"Coal\" means and includes any material composed predominantly of hydrocarbons\nin a solid state;\n(3) \"Severed,\" \"severing,\" or \"severance\" means the physical removal of coal from the\nearth;\n(4) \"Ton\" means a short ton of 2,000 pounds. The number of tons shall be determined\nat the first point at which the coal is weighed;\n(5) (a) \"Taxpayer\" means and includes any individual, partnership, joint venture,\nassociation, or corporation engaged in severing and/or pro cessing coal in this\nstate. In instances where contracts, either oral or written, are entered into by\nwhich persons, organizations, or businesses are engaged to mine or process\nthe coal but do not obtain title to or do not have an economic interest therein ,\nthe party who owns the coal or has an economic interest shall be the taxpayer.\n(b) For purposes of this chapter, a taxpayer possesses an economic interest in coal\nwhere the taxpayer has acquired by investment any interest in coal and\nsecures, by any form of legal relationship, income derived from the severance\nor processing of coal, to which he must look for a return of his capital. A party\nwho has no capital investment in the coal or who only receives an arm's length\nroyalty shall not be considered as having an economic interest;\n(6) \"Gross value\" is defined as follows:\n(a) For coal severed and/or processed and sold during a reporting period, gross\nvalue shall be the amount received or receivable by the taxpayer;\n(b) For coal severed and/or processed, but  not sold during a reporting period,\ngross value shall be determined as follows:\n1. If the coal is to be sold under the terms of an existing contract, the\ncontract price shall be used in computing gross value; and\n2. If there is no existing contract, the fair market value for that grade and\nquality of coal shall be used in computing gross value;\n(c) In a transaction involving related parties, gross value shall be the amount\nreceived or receivable from the first noncont rolled sale by the related parties.\nIf coal is sold to a related party for consumption, gross value shall not be less\nthan the fair market value for coal of similar grade and quality;\n(d) In the absence of a sale, gross value shall be the fair market value  for coal of\nsimilar grade and quality;\n(e) If severed coal is purchased for the purpose of processing and resale, the gross\nvalue shall be the amount received or receivable during the reporting period\nreduced by the amount paid or payable to the registere d taxpayer actually\nsevering the coal;\n(f) If severed coal is purchased for the purpose of processing and consumption,\nthe gross value shall be the fair market value of processed coal of similar\ngrade and quality reduced by the amount paid or payable to th e registered\ntaxpayer actually severing the coal;\n(g) In all instances, the gross value shall not be reduced by any taxes, including\nthe tax levied by KRS 143.020, royalties, sales commissions, or any other\nexpense; and\n(h) In all instances, transportation  expense incurred in transporting coal shall not\nbe considered as gross income from the property;\n(7) \"Reporting period\" means the period for which each taxpayer shall compute his tax\nliability and remit the tax due to the department. The reporting period shall be\nmonthly. However, the department may, under certain conditions, authorize a\nquarterly reporting period;\n(8) \"Processing\" includes cleaning, breaking, sizing, dust allaying, treating to prevent\nfreezing, or loading or unloading for any purpose. \"Processing\" shall not include:\n(a) Acts performed by a final consumer who is not a related party to the person\nwho severed and/or processed the coal if such acts are performed only at the\nsite where the coal is consumed for purposes of generating electricity;\n(b) The act of unloading or loading for shipment coal that has not been severed,\ncleaned, broken, sized, or otherwise treated in Kentucky; or\n(c) The use of electromagnetic energy on coal to reduce moisture, ash, sulfur, or\nmercury in the coal;\n(9) \"Related party\" means two (2) or more persons, organizations, or businesses owned\nor controlled directly or indirectly by the same interest. Control shall exist if a\ncontract or lease, either written or oral, is entered into whereby one (1) party\nmines or proce sses coal owned or held by another party and the owner or\nlessor participates in the mining, processing, or marketing of the coal or\nreceives any value other than an arm's length passive royalty interest. In the\ncase of related parties, the department may apportion or allocate the receipts\nbetween or among the persons, organizations, or businesses if it determines\nthat the apportionment or allocation is necessary in order to more clearly\nreflect gross value;\n(10) (a) \"Transportation expense\" means:\n1. The amount paid by a taxpayer to a third party for transporting coal from\nthe mine mouth or pit to a processing plant, tipple, or loading dock; and\n2. The expense incurred by a taxpayer using his own facilities in\ntransporting coal from the mine mouth or pit to  a processing plant,\ntipple, or loading dock.\n(b) \"Transportation expense\" shall not include:\n1. The cost of acquisition, improvements, and maintenance of real\nproperty;\n2. The cost of acquisition and operating expenses of mining and nonmining\nloading or unloading facilities; or\n3. The cost of acquisition and operating expenses of equipment used to\nload or unload the coal at the mine, processing facility, and mining and\nnonmining loading facility;\n(11) \"Registered taxpayer\" means a taxpayer who holds a vali d coal tax certificate of\nregistration required under KRS 143.030(1) and the certificate of registration was\nvalid for the period in which his coal was sold;\n(12) \"Above-drainage\" means coal in a coal bed that outcrops at the surface within a\nmine permit area and that is accessed at the outcrop location;\n(13) \"Below-drainage\" means coal in a coal bed that does not outcrop at the surface\nwithin a mine permit area and that is accessed by mine slopes or other openings that\npenetrate the coal a minimum of thirt y (30) feet below the surface drainage level;\nand\n(14) \"Mining ratio\" means the amount of bank cubic yards of surface material that must\nbe removed before a ton of coal can be mined.","path":["KRS Chapter 143"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=42625","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:50:36Z","sha256":"4d29926340f7e87b4802187846536c7529f5ba907f4f08ad54a84ff1e49c59a1","source_id":"us-ky","stale":false,"prev":"us-ky/krs-142.408","next":"us-ky/krs-143.020"},"notice":"GroundRules: Original legal text. Not legal advice."}