{"data":{"id":"us-ky/krs-67.753","jurisdiction":"us-ky","citation":"KRS 67.753","heading":"Apportionment of net profit or gross receipts of business entity to local tax","body":"district.\n(1) Except as provided in subsection (4) of this section, net profit or gross receipts shall\nbe apportioned as follows:\n(a) For business entities with both payroll and sales revenue in more than one (1)\ntax district, by multiplying the net profit or gross receipts by a fraction, the\nnumerator of which is the payroll factor, described in subsection (2) of this\nsection, plus the sales factor, described in subsection (3 ) of this section, and\nthe denominator of which is two (2); and\n(b) For business entities with sales revenue in more than one (1) tax district, by\nmultiplying the net profits or gross receipts by the sales factor as set forth in\nsubsection (3) of this section.\n(2) The payroll factor is a fraction, the numerator of which is the total amount paid or\npayable in the tax district during the tax period by the business entity for\ncompensation, and the denominator of which is the total compensation paid or\npayable by the business entity everywhere during the tax period. Compensation is\npaid or payable in the tax district based on the time the individual's service is\nperformed within the tax district.\n(3) The sales factor is a fraction, the numerator of which is the total sales revenue of the\nbusiness entity in the tax district during the tax period, and the denominator of\nwhich is the total sales revenue of the business entity everywhere during the tax\nperiod.\n(a) The sale, lease, or rental of tangible personal property is in the tax district if:\n1. The property is delivered or shipped to a purchaser, other than the\nUnited States government, or to the designee of the purchaser within the\ntax district regardless of the f.o.b. point or other conditions of the sale;\nor\n2. The property is shipped from an office, store, warehouse, factory, or\nother place of storage in the tax district and the purchaser is the United\nStates government.\n(b) Sales revenues, other than revenue from the sale, lease, or rental of tangible\npersonal property or the lease or rental of real property, are apportioned to the\ntax district based upon a fraction, the numerator of which is the time spent in\nperforming such income -producing activity within the tax district and the\ndenominator of which is the  total time spent performing that income -\nproducing activity.\n(c) Sales revenue from the lease or rental of real property is allocated to the tax\ndistrict where the property is located.\n(4) If the apportionment provisions of this section do not fairly repre sent the extent of\nthe business entity's activity in the tax district, the business entity may petition the\ntax district or the tax district may require, in respect to all or any part of the business\nentity's business activity, if reasonable:\n(a) Separate accounting;\n(b) The exclusion of any one (1) or more of the factors;\n(c) The inclusion of one (1) or more additional factors which will fairly represent\nthe business entity's business activity in the tax district; or\n(d) The employment of any other method to effectuate an equitable allocation and\napportionment of net profit or gross receipts.","path":["KRS Chapter 67"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=23782","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:49:26Z","sha256":"65898dcf45b3a47d05adb9d886f95e1f77ab8761ee4b5998f401dc392f688cd8","source_id":"us-ky","stale":false,"prev":"us-ky/krs-67.750","next":"us-ky/krs-67.755"},"notice":"GroundRules: Original legal text. Not legal advice."}