KRS ch. 136 | Kentucky Revised Statutes, Chapter 136 — Corporation and Utility Taxes

Title XI — Revenue and Taxation

Includes enactments through the 2026 Regular Session.

The KRS database was last updated on 2026-08-30.

Title XI Revenue and Taxation

Chapter 136 Corporation and Utility Taxes

136.010 Definitions for chapter, except KRS 136.500 to 136.575.

As used in this chapter, except for KRS 136.500 to 136.575, unless the context requires otherwise:

(1) "Out-of-state business property" means all real and personal property having a taxable situs outside this state owned by a corporation for use in the active conduct of a trade or business;

(2) "Personal property" means every species and character of property, tangible and intangible, other than real property;

(3) "Real property":

(a) Means all lands within this state and improvements thereon; and

(b) Includes but is not limited to mains, pipes, pipelines, and conduits that are:

Authorized to be installed in, upon, or under any public or private street or place; and
Used or to be used for or in connection with the collection, transmission, distribution, conducting, sale, or furnishing of heat, steam, water, sewage, natural or manufactured gas, or electricity to or for the public; and

(4) "Tax exempt United States obligations" means all obligations of the United States exempt from taxation under 31 U.S.C. sec. 3124(a) or exempt under the United States Constitution or any federal statute including the obligations of any instrumentality or agency of the United States which are exempt from state or local taxation under the United States Constitution or any statute of the United States.

Effective: June 27, 2025

History: Amended 2025 Ky. Acts ch. 98, sec. 5, effective June 27, 2025. -- Amended 2024 Ky. Acts ch. 200, sec. 4, effective April 17, 2024. -- Amended 1996 Ky. Acts ch. 254, sec. 29, effective July 15, 1996. -- Amended 1992 Ky. Acts ch. 333, sec. 1, effective July 14, 1992. -- Amended 1984 Ky. Acts ch. 264, sec. 1, effective July 13, 1984. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 4022.

Legislative Research Commission Note (6/27/2025). 2025 Ky. Acts ch. 98, sec. 38, reads as follows: "A claim for refund or credit of a tax overpayment for any taxable period made by an amended return, tax refund application, or any other method on or after the effective date of this Act [June 27, 2025], and based on the amendments to subsection (3) of Section 4 of this Act [KRS 132.010] or subsection (3) of Section 5 of this Act [this section], shall not be recognized for any purpose."

Legislative Research Commission Note (6/27/2025). 2025 Ky. Acts ch. 98, sec. 39, provides that the amendments to this statute and KRS 132.010 in that Act shall apply retroactively to property assessed on or after December 31, 2022.

Legislative Research Commission Note (4/17/2024). Under the authority of KRS 7.136, the reviser of statutes has changed the internal numbering of this statute to place the definitions in alphabetical order. The words in the statute were not changed.

136.012 "Production credit association" defined.

As used in this chapter and in KRS 141.040 and unless a different meaning appears from the context, the term "production credit association" means a corporation organized and chartered pursuant to the provisions of section 20 of that Act of Congress known as the "Farm Credit Act of 1933," (Act June 16, 1933, ch. 98, sec. 20, 48 Stat. 259), as amended, engaged in business in the state of Kentucky, and not exempt by virtue of the laws of the United States from taxation by the state of Kentucky.

History: Created 1970 Ky. Acts ch. 14, sec. 1.

136.013 "Bank for cooperatives" defined.

As used in KRS 136.013 and 141.040 and unless a different meaning appears from the context, the term bank for cooperatives means a corporation organized and chartered pursuant to the provisions of Sections 2 and 3 of that Act of Congress known as the "Farm Credit Act of 1933", as amended, engaged in business in the State of Kentucky, and not exempt by virtue of the laws of the United States from taxation by the State of Kentucky.

History: Created 1972 Ky. Acts ch. 121, sec. 1.

136.020 Assessment of property of corporations.

The property of all corporations, except where otherwise provided by law, shall be assessed in the name of the corporation in the same manner as that of a natural person, except that, when legally called on, the chief officer shall report a full statement of the property of the corporation for taxation, and, for a failure, shall be subject to the penalties provided by law for a similar failure by a natural person in listing his property.

Effective: July 14, 1992

History: Amended 1992 Ky. Acts ch. 338, sec. 16, effective July 14, 1992. -- Amended 1986 Ky. Acts ch. 496, sec. 2, effective August 1, 1986. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. secs. 4085, 4091.

136.030 Repealed, 2006.

[Repealed]

136.040 Repealed, 1946.

[Repealed]

136.050 Time of payment of corporation, property, and franchise taxes -- Interest -

Penalties.

(1) Except where otherwise specially provided, all corporations required to make reports to the Department of Revenue shall pay all taxes due the state from them into the State Treasury at the same time as natural persons are required to pay taxes, and when delinquent shall pay the same rate of interest and penalties as natural persons who are delinquent.

(2) All state taxes assessed against any corporation under the provisions of KRS 136.120 to 136.200 shall be due and payable as provided in KRS 131.110. All county, city, school, and other taxes so assessed shall be due and payable thirty (30) days after notice of the amount of the tax is given by the collecting officer. The state, county, city, school, and other taxes found to be due on any protested assessment or portion thereof shall begin to bear legal interest on the sixty-first day after the Board of Tax Appeals acknowledges receipt of a protest of any assessment or enters an order to certify the unprotested portion of any assessment until paid, except that in no event shall interest begin to accrue prior to January 1 following April 30 of the year in which the report is due. Every corporation so assessed that fails to pay its taxes when due shall be deemed delinquent, a penalty of ten percent (10%) on the amount of the tax shall attach, and thereafter the tax shall bear interest at the tax interest rate as defined in KRS 131.010(6).

Effective: June 29, 2021

History: Amended 2021 Ky. Acts ch. 185, sec. 70, effective June 29, 2021. -- Amended 2017 Ky. Acts ch. 74, sec. 78, effective June 29, 2017. -- Amended 2005 Ky. Acts ch. 85, sec. 294, effective June 20, 2005. -- Amended 1992 Ky. Acts ch. 338, sec. 2, effective August 1, 1992. -- Amended 1990 Ky. Acts ch. 163, sec. 5, effective July 13, 1990; and repealed and reenacted ch. 476, Pt. V., sec. 351, effective July 13, 1990. -- Amended 1958 Ky. Acts ch. 69, sec. 2, effective June 19, 1958. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. secs. 4086, 4091, 4103.

Legislative Research Commission Note (7/13/90). The Act amending this section prevails over the repeal and reenactment in House Bill 940, Acts ch. 476, pursuant to Section 653(1) of Acts ch. 476.

136.060 Corporation organization tax.

(1) Every corporation incorporated under the laws of this state, having a capital stock divided into shares, shall pay into the State Treasury, at the time of incorporation, an organization tax based upon the number of shares authorized by the articles of incorporation, at the following rates: one cent ($0.01) for each share authorized up to and including twenty thousand (20,000) shares, one-half cent ($0.005) for each share in excess of twenty thousand (20,000) shares and up to and including two hundred thousand (200,000) shares, and one-fifth cent ($0.002) for each share in excess of two hundred thousand (200,000) shares.

(2) Upon the filing of an amendment to articles of incorporation changing the authorized number of shares, the tax that would be due upon the number of shares authorized by the articles of incorporation as so amended, at the rates set forth in subsection (1) of this section, shall be computed, and if the tax as so computed exceeds the amount of tax paid on the basis of the number of shares authorized by the articles prior to the amendment, the excess tax shall be paid at the time the amendment is filed.

(3) Every corporation that has not, prior to July 1, 1946, become liable for the payment of a Kentucky organization tax upon any or all of its capital stock, and that by amendment of its articles of incorporation changes its name, increases its powers, enlarges its scope, or prolongs its corporate life, shall, upon the filing of the amendment, pay the tax as provided in subsection (1) of this section upon its entire capital stock, or so much thereof as has not theretofore borne the tax.

(4) A consolidated or merged corporation formed under the laws of this state shall not be required to pay any organization tax on the number of shares of capital stock on which the organization tax has been paid by the constituent corporations prior to the consolidation or merger, but the organization tax shall be paid on any increase of the number of shares of capital stock of the consolidated corporation over the aggregate number of shares of the constituent corporations prior to the consolidation or merger. When a foreign corporation consolidates or merges with one (1) or more corporations of this state, the organization tax shall be paid on the number of shares of capital stock of the foreign corporation.

(5) No corporation subject to the tax imposed by this section shall have or exercise any corporate powers until the tax has been paid, and upon payment it shall file a statement thereof with the Secretary of State. No corporation required to pay a tax under any of the provisions of this section shall in any event pay a less sum therefor than ten dollars ($10).

Effective: July 13, 1990

History: Amended 1990 Ky. Acts ch. 187, sec. 1, effective July 13, 1990. -- Amended 1988 Ky. Acts ch. 84, sec. 1, effective July 15, 1988. -- Amended 1946 Ky. Acts ch. 141, sec. 13. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. secs. 556, 4225.

136.070 Repealed, 2018.

[Repealed]

136.0701 Repealed, 2018.

[Repealed]

136.0704 Repealed, 2018.

[Repealed]

136.071 Repealed, 2018.

[Repealed]

136.072 Repealed, 1966.

[Repealed]

136.073 Average net capital tax on open-end registered investment companies.

(1) Every open-end registered investment company organized under the laws of this state and registered under the Investment Company Act of 1940 shall on or before the fifteenth day of the fourth month following the close of each fiscal year, if the company operates on a fiscal year basis or calendar year, file a report on forms prescribed by the Department of Revenue and pay directly to the State Treasury a tax of two dollars and ten cents ($2.10) for each one thousand dollars ($1,000) of "average net capital" as computed under subsections (2) and (3) of this section.

(2) The term "net capital" as used in this section means capital stock, surplus, borrowed moneys or any other accounts representing capital of the company less the amount of such capital which by said company is invested in Kentucky municipal securities which are obligations issued by the State of Kentucky, its political subdivisions, and the districts, authorities, agencies and instrumentalities of the state and its political subdivisions, the interest on which is exempt from federal and Kentucky income tax.

(3) The term "average net capital" as used in this section means the average of the net capital of the company as shown on financial statements of the company as of the first and last days of the fiscal or calendar year of the company, whichever is applicable.

(4) The Department of Revenue shall examine and audit each report as soon as practicable after each report is received. Failure to make reports and pay taxes as provided in this section shall subject the company to the same penalties imposed for such failure on the part of other corporations.

Effective: June 20, 2005

History: Amended 2005 Ky. Acts ch. 85, sec. 297, effective June 20, 2005. -- Amended 1985 (1st Extra. Sess.) Ky. Acts ch. 6, Pt. II, sec. 4, effective July 29, 1985. -- Created 1980 Ky. Acts ch. 181, sec. 2, effective July 15, 1980.

Legislative Research Commission Note. 1985 Acts Ex. Sess., ch. 6, Part II, Section 5, directs that the provisions of this section shall apply to taxable years ending after 7/31/85.

136.074 Repealed, 1966.

[Repealed]

136.076 Auditing of returns -- Assessment of additional tax.

(1) As soon as practicable after each return is received, the department shall examine and audit it. If the amount of tax computed by the department is greater than the amount returned by the taxpayer, the additional tax shall be assessed and a notice of assessment mailed to the taxpayer by the department within four (4) years from the date the return was filed, except that in the case of a failure to file a return, or of a fraudulent return, the additional tax may be assessed at any time. The time provided in this section may be extended by agreement between the taxpayer and the department.

(2) For the purpose of subsection (1) of this section, a return filed before the last day prescribed by law for filing the return thereof shall be considered as filed on the last

day. For taxable years beginning after December 31, 1993, any extension of time granted for filing the return shall also be considered as extending the last day prescribed by law for filing the return.

Effective: June 20, 2005

History: Amended 2005 Ky. Acts ch. 85, sec. 298, effective June 20, 2005. -- Amended 1994 Ky. Acts ch. 106, sec. 1, effective July 15, 1994. -- Created 1962 Ky. Acts ch. 94, sec. 7.

136.078 Repealed, 2019.

[Repealed]

136.080 Repealed, 1966.

[Repealed]

136.090 Repealed, 2019.

[Repealed]

136.100 Repealed, 2019.

[Repealed]

136.110 Repealed, 1962.

[Repealed]

Public Service Corporations Public Service Corporations

136.115 Definitions for KRS 136.120 to 136.180.

(1) "Corporation" as used in KRS 136.120 through 136.180 means any corporation, company, association, partnership, or person performing any public service.

(2) "Operating property" as used in KRS 136.120 through 136.180 means both the operating tangible property and the franchise, and the payment of taxes on the assessment of operating property shall be deemed the payment of taxes on the operating tangible property and the franchise.

Effective: March 25, 1960

History: Created 1960 Ky. Acts ch. 186, Art. II, sec. 1, effective March 25, 1960.

136.120 Public service corporation property tax -- Exemptions -- Classification -- Assessment -- Certification.

(1) (a) The following public service companies shall pay a tax on their operating property to the state, and to the extent the operating property is subject to local taxation, shall pay a local tax to the county, incorporated city, and taxing district where its operating property is located:

Railway companies;
Sleeping car companies;
Chair car companies;
Dining car companies;
Gas companies;
Water companies;
Bridge companies;
Street railway companies;
Interurban electric railroad companies;
Express companies;
Electric light companies;
Electric power companies, including wind turbine and solar generating companies;
Commercial air carriers;
Air freight carriers;
Pipeline companies;
Privately owned regulated sewer companies;
Railroad car line companies, which means any company, other than a railroad company, which owns, uses, furnishes, leases, rents, or operates to, from, through, in, or across this state or any part thereof, any kind of railroad car including, but not limited to, flat, tank, refrigerator, passenger, or similar type car; and
Every other like company or business performing any public service.

(b) The following companies shall not be subject to the provisions of paragraph

(a) of this subsection:

Bus line companies;
Regular and irregular route common carrier trucking companies;
Taxicab companies;
Providers of communications service as defined in KRS 136.602;
Providers of multichannel video programming services as defined in KRS 136.602; and
A qualified air freight forwarder as defined in KRS 141.121.

(2) (a) The property of the taxpayers shall be classified as operating property, nonoperating tangible property, and nonoperating intangible property.

(b) Nonoperating intangible property within the taxing jurisdiction of the Commonwealth shall be taxable for state purposes only at the same rate as the intangible property of other taxpayers not performing public services.

(c) Operating property and nonoperating tangible property shall be subject to state and local taxes at the same rate as the tangible property of other taxpayers not performing public services.

(3) (a) The Department of Revenue shall:

Have sole power to value and assess all of the property of every corporation, company, association, partnership, or person performing any public service, including those enumerated above and all others to whom this section may apply, whether or not the operating property, nonoperating tangible property, or nonoperating intangible property has previously been assessed by the department;
Allocate the assessment as provided by KRS 136.170; and
Certify operating property subject to local taxation and nonoperating tangible property to the counties, cities, and taxing districts as provided in KRS 136.180.

(b) All of the property assessed by the department pursuant to this section shall be assessed as of December 31 each year for the following year's taxes, and the lien on the property shall attach as of the assessment date.

(c) In the case of a taxpayer whose business is predominantly nonpublic service and the public service business in which he is engaged is merely incidental to his principal business, the department shall in the exercise of its judgment and discretion determine, from evidence which it may have or obtain, what portion of the operating property is devoted to the public service business subject to assessment by the department under this section and shall require the remainder of the property not so engaged to be assessed by the local taxing authorities.

Effective: July 15, 2016

History: Amended 2016 Ky. Acts ch. 93, sec. 4, effective July 15, 2016. -- Amended 2013 Ky. Acts ch. 119, sec. 9, effective January 1, 2014. -- Amended 2012 Ky. Acts ch. 101, sec. 1, effective April 11, 2012. -- Amended 2006 Ky. Acts ch. 169, sec. 7, effective January 1, 2008. -- Amended 2005 Ky. Acts ch. 85, sec, 301, effective June 20, 2005; and 168, sec. 120, effective December 31, 2005. -- Amended 1991 1st Extra. Sess. Acts Ch. 12, Sec. 50, effective February 26, 1991. -- Amended 1990 Ky. Acts ch. 437, sec. 5, effective July 13, 1990; and ch. 476, Pt. V, sec. 352, effective July 13, 1990. -- Amended 1982 Ky. Acts ch. 264, sec. 12, effective January 1, 1984. -- Amended 1976 Ky. Acts ch. 169, sec. 1. -- Amended 1965 (1st Extra. Sess.) Ky. Acts ch. 2, sec. 2. -- Amended 1962 Ky. Acts ch. 29, sec. 6. -- Amended 1960 Ky. Acts ch. 186, Art. II, sec. 2. -- Amended 1942 Ky. Acts ch. 80, secs. 1 and 2. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. secs. 842a-3, 4077, 4082.

Legislative Research Commission Note (1/1/2014). 2013 Ky. Acts ch. 119, sec. 26, provides that the amendments to this statute in 2013 Ky. Acts ch. 119, sec. 9, shall apply to property assessed on or after January 1, 2014.

Legislative Research Commission Note (12/31/2005). 2005 Ky. Acts ch. 168, sec. 169, provides that Section 123 of this Act, relating to unit valuation, takes effect on December 31, 2005. This reference to the effective date in Section 169 of the Act should have been to Section 120 of the Act (KRS 136.120), which relates to unit valuation, rather than to Section 123 (KRS 91.200), which relates to city license taxes. This error occurred when several sections of HB 272 were renumbered during the preparation of a House Committee Substitute and the corresponding changes to sections of the bill setting out the effective dates were not made. This change has been made by the Statute Reviser under the authority of KRS 7.136.

Legislative Research Commission Note (7/14/00). 2000 Ky. Acts ch. 446 (Senate Bill 323), sec. 2, purports to amend this statute, and the General Assembly version of that bill was signed by both presiding officers and by the Governor. The Journals of the House of Representatives and Senate will reflect, however, that House Floor Amendment 1 was adopted by the House on March 27, 2000, but was not transmitted to the Senate for its concurrence when the bill was returned to that body. Thus, the bill signed did not pass both chambers of the General Assembly in the same form and did not become law. Ky. Const. secs. 46 and 88; see also Mason's Manual of Legislative Procedure sec. 737, at 508-509 (1989 ed.). Because the General Assembly's own official records establish this constitutional deficiency, the provisions of 2000 Ky. Acts ch. 446 have not been codified into the Kentucky Revised Statutes. See KRS 7.131(2).

Legislative Research Commission Note. (7/13/90) The Act amending this section prevails over the repeal and reenactment in House Bill 940, Acts Ch. 476, pursuant to Section 653(1) of Acts Ch. 476.

136.130 Reports of all public service corporations -- Extensions.

(1) Each corporation included in KRS 136.120(1) shall annually, between December 31, and April 30, following, make and deliver to the Department of Revenue a report in such form as the department may prescribe, showing such of the following facts as may be requested by the department: The name and principal place of business of the corporation; the kind of business engaged in; the amount of capital stock, preferred and common, and the number of shares of each; the amount of stock paid up; the par and fair cash value of the stock; the highest price at which the stock was sold at a bona fide sale within twelve (12) months next before December 31 of the year for which the report is required to be made; the amount of surplus funds and undivided profits; the total amount of indebtedness as principal; the cost and year acquired of all operating property owned, operated, or leased, including property under construction, property held for future use, and the depreciation attributable thereto as of December 31, the cost and year acquired of all nonoperating tangible property and the depreciation attributable thereto; the cost and market value as of December 31 of all intangible property; the value of all other assets; the operating and nonoperating revenues, the net utility operating income before and after depreciation and before and after income taxes, the net income from operations, the net income including income from investments, and income from all other sources for twelve (12) months next preceding December 31 of the year for which the report is required; the amount and kind of operating property in this state, and where situated in each county, city, and taxing district, assessed or liable to assessment in this state, and the fair cash value thereof, the length and description of all the lines operated, owned, or leased in this state and in each county, city, and taxing district; and such other facts as the department may require.

(2) The report shall cover the period of twelve (12) months ending December 31. The department may change the date of the reports to conform to any change in date established by federal regulations.

(3) If any corporation is in the hands or under the control of a receiver or other person, by order of a court, the receiver or other person shall make the reports required by this section and by KRS 136.140.

(4) All public service corporations included in KRS 136.120 shall file with the report required by subsection (1) of this section a copy of all reports to their stockholders and a complete copy of their report to the Kentucky regulating authority for the year ending December 31.

(5) The Department of Revenue may grant an extension of thirty (30) days to file the public service property tax return when, in its judgment, good cause exists. The department shall keep a record of every extension and the taxpayer shall attach a copy of the approved extension to his return when filed.

(6) A taxpayer may be granted a thirty (30) day extension for filing the public service company property tax return if it requests the extension before the due date of the return and includes with the extension request a report of any increases or decreases in property of fifty thousand dollars ($50,000) or more in any taxing district.

Effective: June 20, 2005

History: Amended 2005 Ky. Acts ch. 85, sec. 302, effective June 20, 2005. -- Amended 1990 Ky. Acts ch. 163, sec. 4, effective July 13, 1990. -- Amended 1986 Ky. Acts ch. 496, sec. 5, effective August 1, 1986. -- Amended 1960 Ky. Acts ch. 186, Art. II, sec. 3, effective March 25, 1960. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. secs. 4078, 4078a, 4079, 4089, 4096, 4097.

136.132 Report of vehicles owned or operated by public service corporations -- Vehicle assessment certified separately.

(1) Each corporation included in KRS 136.120(1) shall annually, when filing the report required by KRS 136.130, provide to the Department of Revenue a listing of all motor vehicles and trailers operated, owned, or leased by it which are subject to registration in Kentucky with the latest registration or certificate number issued to such motor vehicle or trailer and the make, model and year of each vehicle.

(2) The Department of Revenue shall, when valuing the property of corporations or companies assessable by it, value the vehicles at no less than the value used by the property valuation administrator.

(3) In certifying the assessment of property of public service companies subject to local taxation, the department shall separately certify the amount of the assessment representing the valuation of motor vehicles and trailers or an apportionment thereof.

Effective: June 20, 2005

History: Amended 2005 Ky. Acts ch. 85, sec. 303, effective June 20, 2005. -- Created 1978 Ky. Acts ch. 371, sec. 7, effective January 1, 1981.

136.140 Reports of interstate public service corporations.

(1) If a public service corporation, foreign or domestic, operates and conducts its business in other states as well as in this state, the report required by KRS 136.130 shall show the following additional facts: the cost and year acquired of the operating property operated, owned, or leased, including property under construction, property held for future use, and depreciation attributable thereto for the property in this state as of December 31; and such other facts as the department may require.

(2) All public service corporations included in KRS 136.120 shall file with the report required by KRS 136.130 and this section a copy of all reports to their stockholders and a complete copy of their report to the federal regulating agency if their operations are interstate.

Effective: June 20, 2005

History: Amended 2005 Ky. Acts ch. 85, sec. 304, effective June 20, 2005. -- Amended 2002 Ky. Acts ch. 89, sec. 8, effective July 15, 2002. -- Amended 1960 Ky. Acts ch. 186, Art. II, sec. 4, effective March 25, 1960. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. secs. 4079, 4096.

136.150 Ascertainment of facts on failure to report.

If any corporation fails to report as required by KRS 136.130 and 136.140 on or before April 30 of each year, or May 30 if the Department of Revenue has granted the corporation an extension, the Department of Revenue shall ascertain the required facts and values in such manner and by such means as it deems proper, at the cost of the corporation failing to make the report.

Effective: June 20, 2005

History: Amended 2005 Ky. Acts ch. 85, sec. 305, effective June 20, 2005. -- Amended 2002 Ky. Acts ch. 89, sec. 9, effective July 15, 2002. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. secs. 4090, 4097.

136.160 Valuation of property -- Determination.

(1) The Department of Revenue shall determine the fair cash value of the operating property of a domestic public service corporation as a unit. The fair cash value of the operating property shall be equalized.

(2) The Department of Revenue shall determine the fair cash value of the operating property of a foreign public service corporation or a domestic public service corporation with property or routes in Kentucky and outside Kentucky as a unit according to subsection (1). The fair cash value of the operating property everywhere valued as a unit shall be apportioned to Kentucky based on the average of the property factor and the business factor. The fair cash value of the operating property in Kentucky shall be equalized.

(a) The property factor shall fairly reflect the amount of operating property operated, owned, or leased in Kentucky compared to the total amount of operating property operated, owned, or leased everywhere. An allocable portion of the rolling stock, aircraft, and watercraft of a common carrier shall be included in the operating property, operated, owned, or leased in Kentucky. This factor may be a single factor or an average of several factors.

(b) The business factor shall fairly reflect the utilization of the operating property operated, owned, or leased in Kentucky compared to the utilization of the operating property operated, owned, or leased everywhere. This factor may be a single factor or an average of several factors.

(3) The nonoperating tangible and nonoperating intangible property of public service corporations whose operating property is valued according to either subsection (1) or (2) shall be valued by the Department of Revenue in the same manner and according to the same standards as if this property were valued by the property valuation administrator in the county where the property has a taxable situs.

Effective: June 20, 2005

History: Amended 2005 Ky. Acts ch. 85, sec. 306, effective June 20, 2005. -- Amended 1962 Ky. Acts ch. 29, sec. 7. -- Amended 1960 Ky. Acts ch. 186, Art. II, sec. 5. -- Amended 1954 Ky. Acts ch. 149, sec. 2. -- Amended 1942 Ky. Acts ch. 164, secs. 1 and 2. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. secs. 4079, 4080, 4081.

136.170 Apportionment of property valuation.

The Department of Revenue shall allocate the assessed value of the operating property in this state among the counties, cities, and other taxing districts. The location of operating property and the proportion which the length of line or route operated in such taxing district bears to the total length of lines or route operated in this state shall be considered in this allocation and such other reasonable evidence of value as the Department of Revenue may by regulations prescribe; provided, however, that the assessed value of nonoperating tangible property shall be allocated to the county, city, or other taxing district where the property is situated.

Effective: June 20, 2005

History: Amended 2005 Ky. Acts ch. 85, sec. 307, effective June 20, 2005. -- Amended 1960 Ky. Acts ch. 186, Art. II, sec. 6, effective March 25, 1960. -- Amended 1942 Ky. Acts ch. 164, secs. 1 and 2. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 4081.

136.180 Notice and certification of valuation -- Effect of appeal on payment of taxes -- Payment of fee by any district which has value certified by department.

(1) The Department of Revenue shall, immediately after fixing the assessed value of the operating property and other property of a public service corporation for taxation, notify the corporation of the valuation and the amount of assessment for state and local purposes. When the valuation has been finally determined, the department shall immediately certify, unless otherwise specified, to the county clerk of each county in which any of the operating property or nonoperating tangible property assessment of the corporation is liable to local taxation, the amount of property liable for county, city, or district tax.

(2) No appeal shall delay the collection or payment of taxes based upon the assessment in controversy. The taxpayer shall pay all state, county, and district taxes due on the valuation which the taxpayer claims as the true value as stated in the protest filed under KRS 131.110. When the valuation is finally determined upon appeal, the taxpayer shall be billed for any additional tax and interest at the tax interest rate as defined in KRS 131.010(6), from the date the tax would have become due if no appeal had been taken. The provisions of KRS 134.015(6) shall apply to the tax bill.

(3) The Department of Revenue shall compute annually a multiplier for use in establishing the local tax rate for the operating property of railroads or railway companies that operate solely within the Commonwealth. The applicable local tax rates on the operating property shall be adjusted by the multiplier. The multiplier shall be calculated by dividing the statewide locally taxable business tangible personal property by the total statewide business tangible personal property.

(4) The Department of Revenue shall annually calculate an aggregate local rate for each local taxing district to be used in determining local taxes to be collected for railroad carlines. The rate shall be the statewide tangible tax rate for each type of local taxing district multiplied by a fraction, the numerator of which is the commercial and industrial tangible property assessment subject to full local rates and the denominator of which is the total commercial and industrial tangible personal property assessment. Effective January 1, 1994, state and local taxes on railroad carline property shall become due sixty (60) days from the date of notice and shall be collected directly by the Department of Revenue. The local taxes collected by the Department of Revenue shall be distributed to each local taxing district levying a tax on railroad carlines based on the statewide average rate for each type of local taxing district. However, prior to distribution any fees owed to the Department of Revenue by any local taxing district under the provisions of subsection (5) of this section shall be deducted.

(5) The certification of valuation shall be filed by each county clerk in his office, and shall be certified by the county clerk to the proper collecting officer of the county, city, or taxing district for collection. Any district which has the value certified by the department shall pay an annual fee to the department which represents an allocation of department operating and overhead expenses incurred in generating the valuations. This fee shall be determined by the department and shall apply to valuations for tax periods beginning on or after December 31, 1981.

Effective: April 27, 2018

History: Amended 2018 Ky. Acts ch. 171, sec. 110, effective April 14, 2018; and ch. 207, sec. 110, effective April 27, 2018. -- Amended 2015 Ky. Acts ch. 67, sec. 4, effective June 24, 2015. -- Amended 2009 Ky. Acts ch. 10, sec. 47, effective January 1, 2010. -- Amended 2005 Ky. Acts ch. 85, sec. 308, effective June 20, 2005; and ch. 106, sec. 1, effective June 20, 2005. -- Amended 1998 Ky. Acts ch. 391, sec. 5, effective July 15, 1998. -- Amended 1994 Ky. Acts ch. 64, sec. 1, effective July 15, 1994. -- Amended 1990 Ky. Acts ch. 345, sec. 2, effective July 13, 1990; ch. 437, sec. 7, effective July 13, 1990; and ch. 476, Pt. V, sec. 353, effective July 13, 1990. - - Amended 1982 Ky. Acts ch. 388, sec. 6, effective July 15, 1982. -- Amended 1960 Ky. Acts ch. 186, Art. II, sec. 7, effective March 25, 1960. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. secs. 4083, 4084, 4102.

Legislative Research Commission Note (4/27/2018). This statute was amended by 2018 Ky. Acts chs. 171 and 207, which do not appear to be in conflict and have been codified together.

Legislative Research Commission Note (8/17/2006). In the final sentence of subsection (4) of this statute, a reference to "subsection (4) of this section" has been changed to read "subsection (6) of this section." Under the authority of KRS 7.136(1)(e) and (h), the Reviser of Statutes has made this change to correct an internal reference that should have been adjusted when subsections were renumbered in 1998 Ky. Acts ch. 391, sec. 5, and 2005 Ky. Acts ch. 106, sec. 1.

Legislative Research Commission Note (6/20/2005). 2005 Ky. Acts chs. 11, 85, 95, 97, 98, 99, 123, and 181 instruct the Reviser of Statutes to correct statutory references to agencies and officers whose names have been changed in 2005 legislation confirming the reorganization of the executive branch. Such a correction has been made in this section.

Legislative Research Commission Note (11/1/90). The two Acts amending this section prevail over the repeal and reenactment in House Bill 940, Acts Ch. 476, pursuant to Section 653(1) of Acts Ch. 476. The two amending Acts do not appear to be in conflict and have been compiled together. Under the authority of KRS 7.136(1), the Reviser of Statutes has divided the text of this section into the indicated subdivisions. The original 1990 codification of KRS 136.180 and its accompanying note dated July 13, 1990, are superseded and without effect.

Watercraft Operated for Commercial Purpose Watercraft Operated for Commercial Purpose

136.1801 Definitions for KRS 136.1801 to 136.1806.

As used in KRS 136.1801 to 136.1806:

(1) "Corporation" means any corporation, company, association, partnership, limited liability company, limited liability partnership, other business association, or person operating any watercraft for commercial purposes in the Commonwealth;

(2) "Watercraft" means any boat, towboat, pushboat, barge, or similar vessel. Watercraft shall not include:

(a) Floating equipment used in construction, including but not limited to dredges, pile drivers, and flats;

(b) Houseboats;

(d) Pleasure boats; or

(e) Commercial dining boats;

(3) "Department" means the Department of Revenue;

(4) "Operating" or "operated" means owned, leased, rented, or used;

(5) "Local taxing district" means a local taxing jurisdiction or district, including a county, city, charter county, school district, consolidated local government, urban- county government, and special taxing district, which has a navigable waterway within its borders; and

(6) "Navigable waterway" means and shall include the following:

(a) All of the Mississippi River within or bordering this state;

(b) All of the Ohio River within or bordering this state;

(d) The Green River beginning at Ohio River mile marker 784.4 and ending at Green River mile marker 108.9;

(e) The Tennessee River beginning at Ohio River mile marker 934.5 and ending at Tennessee River mile marker 62.4;

(f) The Cumberland River beginning at Ohio River mile marker 922.5 and ending at Cumberland River mile marker 74.7;

(g) The Big Sandy River beginning at Ohio River mile marker 317.2 and ending at Big Sandy River mile marker 14.2;

(h) The Licking River beginning at Ohio River mile marker 470.2 and ending at Licking River mile marker 7; and

(i) Any other waterway in this state utilized by a corporation for the transportation of watercraft during the previous calendar year.

Effective: June 25, 2009

History: Amended 2009 Ky. Acts ch. 52, sec. 1, effective June 25, 2009. -- Created 2006 Ky. Acts ch. 169, sec. 1, effective January 1, 2008.

136.1802 Watercraft assessment and taxation -- Allocation of tax receipts -- Value determination.

(1) Notwithstanding KRS 132.486, the watercraft of any corporation operating within this state, or partly within this state and partly within other states, shall be assessed by the department as of January 1 each year.

(2) The department shall have the sole power to value and assess all of the corporation's watercraft.

(3) The department shall bill and collect all ad valorem taxes on watercraft and shall divide, allocate, and distribute the tax receipts as provided in KRS 136.1804 to each local taxing district within this state.

(4) The value of the corporation's watercraft shall be apportioned to this state by multiplying the assessed value by a fraction, the numerator of which shall include:

(a) Ninety percent (90%) of the length of the corporation's Ohio River route that borders Kentucky;

(b) Fifty percent (50%) of the length of the Mississippi River route that borders Kentucky;

(d) One hundred percent (100%) of the length of all other navigable waterways within Kentucky; and the denominator of which shall include the length of all waterway routes traveled in all states by the corporation during the previous calendar year.

Effective: January 1, 2008

History: Created 2006 Ky. Acts ch. 169, sec. 2, effective January 1, 2008.

136.1803 Description of watercraft operated during previous calendar year to be filed with department.

On or before May 15, 2009, and each May 15 thereafter, each corporation operating watercraft within this state during the previous calendar year shall file on forms prescribed by the department, a detailed description of all watercraft it operated as of January 1 of the current year.

Effective: June 25, 2009

History: Amended 2009 Ky. Acts ch. 52, sec. 2, effective June 25, 2009. -- Created 2006 Ky. Acts ch. 169, sec. 3, effective January 1, 2008.

136.1804 Notification of assessed value of watercraft -- Protest -- Tax rates -- Distribution of tax receipts -- Administrative fee.

(1) The department shall notify the corporation of the assessed value of its watercraft each year, as soon as possible after rates set by local authorities are provided to the department. The corporation shall have sixty (60) days from the date of the department's notice of assessment to protest as provided by KRS 131.110.

(2) No appeal shall delay the collection or payment of taxes based upon the assessment in controversy. The corporation shall pay to the department all state and local taxing district taxes due on the undisputed value of its watercraft as stated in the protest filed under KRS 131.110. When the valuation is finally determined upon appeal, the corporation shall be billed for any additional tax and interest at the tax interest rate as defined in KRS 131.010(6) from the date the tax would have become due if the assessment had not been appealed. The provisions of KRS 134.015(6) shall apply to the tax bill.

(3) The state and local taxing district taxes on the watercraft are due sixty (60) days from the date of notice of assessment. The tangible property taxes on watercraft shall be collected in accordance with the provisions of KRS Chapter 134.

(4) The state rate of taxation on watercraft shall be forty-five cents ($0.45) upon each one hundred dollars ($100) of assessed value of the watercraft.

(5) The department shall annually calculate an aggregate local rate, which shall be imposed upon each one hundred dollars ($100) of assessed value of the watercraft.

(a) The aggregate local rate shall be the sum of each local personal property tax rate for each local taxing district multiplied by a fraction, the numerator of which shall be the length of the navigable waterways in the local taxing district and the denominator of which shall be the total of the length of all navigable waterways in this state. Both the numerator and the denominator shall be adjusted, if necessary, by paragraph (b) of this subsection.

(b) For purposes of computing the local property tax rate in paragraph (a) of this section, the length of the navigable waterways of the Green River shall be reduced by fifty percent (50%) and the length of the navigable waterways of the Kentucky River shall be reduced by seventy-five percent (75%).

(6) The watercraft taxes collected for local taxing districts by the department shall be distributed to each local taxing district based upon the local taxing district's fractional portion of the amount calculated in subsection (5) of this section.

(7) Prior to distribution of taxes to local taxing districts, the department shall retain an administrative fee of one percent (1%) of the amount due each district. The fee imposed by this subsection shall have no effect upon the discount provided to taxpayers pursuant to KRS 134.015.

Effective: April 27, 2018

History: Amended 2018 Ky. Acts ch. 171, sec. 111, effective April 14, 2018; and ch. 207, sec. 111, effective April 27, 2018. -- Amended 2009 Ky. Acts ch. 10, sec. 48, effective January 1, 2010; and ch. 52, sec. 3, effective June 25, 2009. -- Created 2006 Ky. Acts ch. 169, sec. 4, effective January 1, 2008.

Legislative Research Commission Note (4/27/2018). This statute was amended by 2018 Ky. Acts chs. 171 and 207, which do not appear to be in conflict and have been codified together.

136.1805 Base collections.

(1) As used in this section, "base collections" means actual collections received from property taxes assessed on watercraft for the 2007 calendar year. It shall not include collections for assessments for any other year.

(2) The department shall determine for each local taxing district the amount of base collections.

(3) If a local taxing district's base collections are greater than the taxes distributed to it under KRS 136.1804 for any year from 2008 to 2017, that local taxing district shall receive a distribution from the general fund equal to the difference.

Effective: January 1, 2008

History: Created 2006 Ky. Acts ch. 169, sec. 5, effective January 1, 2008.

136.1806 Taxes levied under KRS 136.1801 to 136.1806 not exclusive.

The taxes levied by KRS 136.1801 to 136.1806 are taxes on the watercraft only. The taxes levied by KRS 136.1801 to 136.1806 shall be in addition to any other taxes levied by state or local jurisdictions on any corporation.

Effective: January 1, 2008

History: Created 2006 Ky. Acts ch. 169, sec. 6, effective January 1, 2008.

136.181 Repealed, 2008.

[Repealed]

136.182 Repealed, 2008.

[Repealed]

136.183 Repealed, 2008.

[Repealed]

136.184 Repealed, 2008.

[Repealed]

136.185 Repealed, 1964.

[Repealed]

136.186 Repealed, 2005.

[Repealed]

136.187 Repealed, 2008.

[Repealed]

Vehicles of System Operating Route Partly Within State Vehicles of System Operating Route Partly Within State

136.1873 Application of section -- Taxation of vehicles of system whose route or operation is partly within this state.

The provisions of this section shall apply to assessments made prior to January 1, 2007.

(1) Notwithstanding the provisions of KRS 132.487, trucks, trailers, tractors, semitrailers, and buses of any person, corporation, partnership, or any other business association whose route or system is partly within this state and partly within another state or states, shall be assessed by the Department of Revenue for purposes of taxation as of January 1 each year.

(2) The proportion of miles operated in this state compared to the total miles operated everywhere shall be considered in fixing the value of the property for taxation. Other reasonable evidence shall be considered in fixing the value. However, pick-up and delivery vehicles operating from a terminal within this state or vehicles which do not leave this state in the normal course of business shall not be valued on an apportioned basis.

Effective: January 1, 2007

History: Amended 2006 Ky. Acts ch. 252, Pt. XV, sec. 3, effective January 1, 2007. -- Amended 2005 Ky. Acts ch. 85, sec. 314, effective June 20, 2005. -- Amended 1992 Ky. Acts ch. 391, sec. 6, effective July 14, 1992. -- Created 1990 Ky. Acts ch. 437, sec. 1, effective July 13, 1990.

136.1875 Information to be furnished by fleet owner.

On or before April 15, 1991, and prior to January 1, 2007, each person, corporation, partnership, or other business association owning or operating trucks, tractors, trailers, semitrailers, and buses whose route or system is partly within this state and partly within another state or states, shall on forms provided by the Department of Revenue provide the department with a detailed description of all its vehicles operating within this state along with the necessary mileage data to be used in apportioning the value on an annual basis.

Effective: January 1, 2007

History: Amended 2006 Ky. Acts ch. 252, Pt. XV, sec. 4, effective January 1, 2007. -- Amended 2005 Ky. Acts ch. 85, sec. 315, effective June 20, 2005. -- Amended 1992 Ky. Acts ch. 391, sec. 7, effective July 14, 1992. -- Created 1990 Ky. Acts ch. 437, sec. 2, effective July 13, 1990.

136.1877 Application of section -- Appeal from notice of tentative assessment -- Effect of appeal on payment of taxes -- Collection of state taxes -- Aggregate local rate to be set annually -- Distribution.

The provisions of this section shall apply to assessments made prior to January 1, 2007.

(1) The Department of Revenue shall immediately, after fixing the assessed value of the trucks, tractors, trailers, semitrailers, and buses, notify the taxpayer of the valuation determined. Any taxpayer who has been assessed by the department in the manner outlined in KRS 136.1873 shall have sixty (60) days from the date of the department's notice of the tentative assessment to protest as provided by KRS 131.110.

(3) The state and local taxes on the property are due sixty (60) days from the date of notice and shall be collected directly by the Department of Revenue.

(4) The Department of Revenue shall annually calculate an aggregate local rate to be used in determining the local taxes to be collected. The rate shall be the statewide average motor vehicle tax rate for each type of local taxing district multiplied by a fraction, the numerator of which is the commercial and industrial tangible personal property assessment subject to full local rates and the denominator of which is the total commercial and industrial tangible personal property assessment.

(5) The local taxes collected by the Department of Revenue shall be distributed to each local taxing district levying a tax on motor vehicles based on the statewide average rate for each type of local taxing district. However, prior to distribution any fees owed to the Department of Revenue by any local taxing district under the provisions of KRS 136.180(5) shall be deducted.

Effective: April 27, 2018

History: Amended 2018 Ky. Acts ch. 171, sec. 112, effective April 14, 2018; and ch. 207, sec. 112, effective April 27, 2018. -- Amended 2015 Ky. Acts ch. 67, sec. 5, effective June 24, 2015. -- Amended 2009 Ky. Acts ch. 10, sec. 49, effective January 1, 2010. -- Amended 2006 Ky. Acts ch. 252, Pt. XV, sec. 5, effective January 1, 2007. -- Amended 2005 Ky. Acts ch. 85, sec. 316, effective June 20, 2005; and ch. 106, sec. 5, effective June 20, 2005. -- Amended 1998 Ky. Acts ch. 391, sec. 4, effective July 15, 1998. -- Amended 1992 Ky. Acts ch. 391, sec. 8, effective July 14, 1992. -- Created 1990 Ky. Acts ch. 437, sec. 3, effective July 13, 1990.

Legislative Research Commission Note (4/27/2018). This statute was amended by 2018 Ky. Acts chs. 171 and 207, which do not appear to be in conflict and have been codified together.

136.188 Annual fee on trucks, tractors, and buses operating partly within and partly outside Kentucky -- Fee to replace ad valorem tax -- Determination of value and fee -- Collection and distribution -- Protest.

(1) Notwithstanding KRS 132.487, any truck, tractor, or bus which is operated on a route or as part of a system that is partly within and partly outside Kentucky shall be subject to an annual fee at the time the vehicle is registered with and the registration fee is paid to the Transportation Cabinet pursuant to KRS 186.020 and 186.050(3) and (13). The fee shall be imposed on the vehicle's owner or the owner's legal designee as of January 1 of each year. Such payment shall be made to the Transportation Cabinet either directly, in the case of a vehicle based in Kentucky, or indirectly, through the International Registration Plan, in the case of a vehicle based outside of Kentucky.

(2) The fee imposed by subsection (1) of this section replaces the state and local ad valorem property tax the Department of Revenue previously imposed and centrally collected against trucks, tractors, and buses operated on a route or as part of a system that is partly within and partly outside Kentucky. The fee imposed by subsection (1) of this section shall not be construed as a fee imposed upon the registration, operation, or use of the vehicles on public highways. The Department of Revenue shall use the following method for determining the rate for fixing the assessed value of the property and for determining the annual fee amount:

(a) The Department of Revenue shall determine the assessed value on an annual basis by multiplying the purchase price of the truck, tractor, or bus by a depreciation value expressed as a percentage of the original cost from an authoritative source that the Department of Revenue prescribes by promulgation of an administrative regulation;

(b) The Department of Revenue shall determine an aggregate state and local rate on an annual basis. The state rate shall be the weighted average commercial and industrial tangible personal property tax rate, and the local rate shall be determined using the method set forth in KRS 136.180(3) and (4);

(c) The Department of Revenue shall determine the amount subject to the annual fee by multiplying the total assessed value of all vehicles by an apportionment factor. The apportionment factor shall be determined as provided in KRS 186.050(13)(a); and

(d) The annual fee shall be determined by multiplying the amount subject to the annual fee by the rate determined in paragraph (b) of this subsection. The Department of Revenue shall provide the Transportation Cabinet with the information needed to collect the fee.

(3) The Transportation Cabinet shall forward the money it collects from the fee imposed by subsection (1) of this section to the Department of Revenue on a monthly basis. The Department of Revenue shall divide and distribute the money among the state, counties, cities, urban-counties, charter counties, consolidated local governments, school districts, and special taxing districts in the same manner as the Department of Revenue divided and distributed the state and local ad valorem property tax previously imposed and centrally collected.

(4) Pick-up and delivery vehicles operating from a terminal within this state and vehicles that do not leave the state in the normal course of business shall not be required to pay the fee imposed by subsection (1) of this section, but shall instead be subject to the ad valorem tax under KRS 132.487.

(5) Any person paying the fee imposed by subsection (1) of this section shall have sixty

(60) days from the date the person is notified of the fee amount to protest. The protest shall be filed with the Commonwealth of Kentucky, Department of Revenue, in accordance with the provisions of KRS 131.110. Notification by any state's or Canadian province's or territory's registration authority of the amount due shall satisfy the notification requirement of KRS 131.110(1).

(6) No protest or appeal shall delay the collection or payment of the fee imposed by subsection (1) of this section. The fee amount due as determined in subsection (2) of this section shall be paid at the time of registration. If the fee is not paid, the Commonwealth of Kentucky, Transportation Cabinet, shall not register the vehicle for which registration is sought. Persons registering vehicles in other states or Canada shall be subject to requirements of those registration authorities.

Effective: April 27, 2018

History: Amended 2018 Ky. Acts ch. 171, sec. 113, effective April 14, 2018; and ch. 207, sec. 113, effective April 27, 2018. -- Created 2006 Ky. Acts ch. 252, Pt. XV, sec. 2, effective January 1, 2007.

Legislative Research Commission Note (4/27/2018). This statute was amended by 2018 Ky. Acts chs. 171 and 207, which do not appear to be in conflict and have been codified together.

136.190 Boundary report of cities of the home rule class and taxing districts.

(1) The superintendent of schools in each district in which any individual, group of individuals or corporation, operates public utility or other franchise taxpaying property assessed under KRS 136.120 shall, on or before the first day of January, 1957, furnish to the county clerk of the county in which the district is situated, to each franchise taxpayer within the district, and to the Department of Revenue, the boundary of his school district. The superintendent of schools in each district in which any franchise-paying corporation, individual, or group of individuals operates shall, on or before the first day of January, 1958, and each year thereafter, furnish to the county clerk, to each franchise taxpayer within the district, and to the Department of Revenue, any changes made in the boundary of his school district during the immediately preceding twelve (12) months.

(2) The engineer of cities of the first class and the city clerk of cities of the home rule class shall notify the county clerk, each franchise taxpayer within the city, and the Department of Revenue of their boundaries in the same manner as required of the superintendent of schools in subsection (1) of this section.

(3) The responsible governing official or the chairman of the governing body of any taxing district other than the county, school district, or city shall notify the county clerk, each franchise taxpayer within the district, and the Department of Revenue of their boundaries in the same manner as required of the superintendent of schools in subsection (1) of this section.

Effective: January 1, 2015

History: Amended 2014 Ky. Acts ch. 92, sec. 218, effective January 1, 2015. -- Amended 2005 Ky. Acts ch. 85, sec. 317, effective June 20, 2005. -- Repealed and reenacted 1990 Ky. Acts ch. 476, Pt. V, sec. 354, effective July 13, 1990. -- Amended 1960 Ky. Acts ch. 186, Art. II, sec. 8, effective March 25, 1960. -- Amended 1956 Ky. Acts ch. 170, sec. 1. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. secs. 4099, 4399-16.

136.200 Allocation of railroad bridge assessment.

The assessment of railroad bridges spanning any river that constitutes a boundary of the state shall be allocated to the counties in which they are located, and the local tax derived therefrom shall be applied to each city, county, or taxing district in which the bridges are located.

Effective: July 13, 1990

History: Repealed and reenacted 1990 Ky. Acts ch. 476, Pt. V, sec. 355, effective July 13, 1990. -- Amended 1960 Ky. Acts ch. 186, Art. II, sec. 9, effective March 25, 1960. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 4102.

136.210 Repealed, 1960.

[Repealed]

136.220 Repealed, 1960.

[Repealed]

136.230 Repealed, 1966.

[Repealed]

136.240 Repealed, 1960.

[Repealed]

136.250 Repealed, 1966.

[Repealed]

136.260 Repealed, 1966.

[Repealed]

136.270 Repealed, 1966.

[Repealed]

136.275 Repealed, 1966.

[Repealed]

136.280 Repealed, 1966.

[Repealed]

Savings and Loans, Savings Banks, and Similar Institutions Savings and Loans, Savings Banks, and Similar Institutions

136.290 Report of savings and loan, savings bank, and similar institutions -- Value determination -- Notice.

(1) Every federally or state chartered savings and loan association, savings bank, and other similar institutions operating solely in Kentucky shall, during January of each year, file with the Department of Revenue a report containing such information and in such form as the department may require.

(2) The department shall fix the total value, as of January 1 of each year, of the capital of each financial institution included in subsection (1) of this section. Capital shall include certificates of deposit, savings accounts, demand deposits, undivided profits, surplus, and general reserves, excepting the share of borrowing members where the amount borrowed equals or exceeds the amount paid in by those members. For Agricultural Credit Associations chartered by the Farm Credit Administration, capital shall be computed by deducting the book value of the association's investment in any other wholly owned institution chartered by the Farm Credit Administration that is either subject to the tax imposed by KRS 136.300 or 136.310 or that is exempt from state taxation by federal law. The department shall immediately notify each institution of the value so fixed.

Effective: June 20, 2005

History: Amended 2005 Ky. Acts ch. 85, sec. 318, effective June 20, 2005. -- Amended 2004 Ky. Acts ch. 142, sec. 5, effective April 21, 2004. -- Amended 1990 Ky. Acts ch. 262, sec. 1, effective July 13, 1990. -- Amended 1972 Ky. Acts ch. 121, sec. 2. -- Amended 1970 Ky. Acts ch. 14, sec. 2. -- Amended 1966 Ky. Acts ch. 255, sec. 130. -- Amended 1960 Ky. Acts ch. 186, Art. 1, sec. 36. -- Amended 1949 (1st Extra. Sess.) Ky. Acts ch. 4, sec. 19. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 4019a-6.

136.291 Inapplicability of KRS 136.290, 136.300, and 136.310 after January 1, 2021 -- Savings and loan associations subject to corporation income tax and limited liability entity tax after January 1, 2021 -- Short-year returns.

(1) Beginning January 1, 2021, the savings and loan tax under KRS 136.290, 136.300, and 136.310 shall no longer apply to savings and loan associations.

(2) Beginning January 1, 2021, all savings and loan associations shall be subject to the corporation income tax under KRS 141.040 and the limited liability entity tax under KRS 141.0401. Notwithstanding KRS 141.040 and 141.0401, any savings and loan association operating on a fiscal year shall file a short-year corporation income and limited liability entity tax return and pay any tax due thereon for the period beginning January 1, 2021, through the end of the savings and loan association's normal fiscal year. The department may issue guidance regarding the filing of the short-year return.

Effective: June 27, 2019

History: Created 2019 Ky. Acts ch. 196, sec. 7, effective June 27, 2019.

136.300 Rate and payment of tax -- Exemption from other taxes -- Charging against dividends.

(1) By July 1 succeeding the filing of the report provided for in KRS 136.290, each financial institution included in subsection (1) of KRS 136.290 shall pay directly into the State Treasury a tax of one dollar ($1) for each one thousand dollars ($1,000) paid in on its capital stock as fixed in KRS 136.290. The individual shareholders shall not be required to list their shares for taxation for any purpose. Any financial institution included in subsection (1) of KRS 136.290 shall not be required to pay local taxes upon its capital stock, surplus, undivided profits, notes, mortgages, or other credits, and the tax provided by this section shall be in lieu of all taxes for state purposes on intangible property of the institution. Failure to make reports and pay taxes as provided in this section and in KRS 136.290 shall subject the institution to the same penalties imposed for such failure on the part of the other corporations.

(2) If a financial institution included in subsection (1) of KRS 136.290 so elects, it may deduct the taxes imposed in subsection (1) of this section from the dividends paid or credited to a nonborrowing shareholder.

Effective: July 13, 1990

History: Amended 1990 Ky. Acts ch. 262, sec. 2, effective July 13, 1990. -- Amended 1972 Ky. Acts ch. 121, sec. 3. -- Amended 1970 Ky. Acts ch. 14, sec. 3. -- Amended 1966 Ky. Acts ch. 255, sec. 131. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. secs. 4019a-7, 4019a-8.

136.310 Tax on and reports from foreign savings and loan associations, savings banks, and similar institutions.

(1) Every federally or state chartered savings and loan association, savings bank, and other similar institution authorized to transact business in this state, with property and payroll within and without this state, shall, during January of each year, file with the Department of Revenue a report containing information and in such form as the department may require.

(2) The Department of Revenue shall fix the fair cash value, as of January 1 of each year, of the capital attributable to Kentucky in each financial institution included in subsection (1) of this section. The methodology employed by the department shall be a three (3) step process as follows:

(a) 1. The total value of deposits maintained in Kentucky less any amounts where the amount borrowed by a member equals or exceeds the amount deposited by that member shall be determined.

The total value of deposits maintained in Kentucky shall be determined by the same method used for filing the summary of deposits report with the Federal Deposit Insurance Corporation;

(b) 1. The Kentucky apportioned value of capital shall be determined by including undivided profits, surplus, general reserves, and paid-up stock.

For Agricultural Credit Associations chartered by the Farm Credit Administration, capital shall be computed by deducting the book value of the association's investment in any other wholly owned institution chartered by the Farm Credit Administration that is either subject to the tax imposed by KRS 136.300 or this section or that is exempt from state taxation by federal law.
The Kentucky value of capital shall be determined by a fraction, the numerator of which is the receipts factor plus the outstanding loan balance factor plus the payroll factor, and the denominator of which is three (3); and

(c) 1. The values determined in steps (a) and (b) of this subsection shall be added together to determine total Kentucky capital and then reduced by the influence of ownership in tax-exempt United States obligations to determine Kentucky taxable capital.

The influence of tax-exempt United States obligations is to be determined from the reports of condition filed with the applicable supervisory agency as follows: the average amount of tax-exempt United States obligations for the calendar year, over the average amount of total assets for the calendar year multiplied by total Kentucky capital.
The department shall immediately notify each institution of the value so fixed.

(3) The receipts factor specified in subsection (2)(b) of this section is a fraction, the numerator of which is all receipts derived from loans and other sources negotiated through offices or derived from customers in Kentucky, and the denominator of which is total business receipts for the preceding calendar year.

(4) (a) The outstanding loan balance factor specified in subsection (2)(b) of this section is a fraction, the numerator of which is the average balance of outstanding loans negotiated from offices or made to customers in Kentucky, and the denominator of which is the average balance of all outstanding loans.

(b) 1. The average outstanding loan balance is determined by adding the outstanding loan balance at the beginning of the preceding calendar year to the outstanding loan balance at the end of the preceding calendar year and dividing by two (2).

If the yearly beginning balance and ending balance results in an inequitable factor, the average outstanding loan balance may be computed on a monthly average balance.

(5) The payroll factor specified in subsection (2)(b) of this section shall be determined for the preceding calendar year under KRS 141.901 and administrative regulations promulgated according to KRS Chapter 13A.

(6) (a) By July 1 succeeding the filing of the report as provided in subsection (1) of this section, each financial institution included in subsection (1) of this section shall pay directly into the State Treasury a tax of one dollar ($1) for each one thousand dollars ($1,000) paid in on its Kentucky taxable capital as fixed in subsection (2)(c) of this section.

(b) The institution shall not be required to pay local taxes upon its capital stock, surplus, undivided profits, notes, mortgages, or other credits, and the tax provided by this section shall be in lieu of all taxes for state purposes on intangible property of the institution, nor shall any depositor of the institution be required to list his deposits for taxation under KRS 132.020.

(c) Failure to make reports and pay taxes as provided in this section shall subject the institution to the same penalties imposed for such failure on the part of the other corporations.

(7) If a financial institution included in subsection (1) of this section selects, it may deduct taxes imposed in subsection (6) of this section from the dividends paid or credited to a nonborrowing shareholder.

(8) (a) Every Agricultural Credit Association chartered by the Farm Credit Administration being authorized to transact business in Kentucky but having no employees located within or without the state shall be subject to the same tax imposed pursuant to either KRS 136.300 or this section as that imposed upon its wholly owned Production Credit Association subsidiary.

(b) For purposes of computing Kentucky apportioned value of capital pursuant to subsection (2) of this section, those Agricultural Credit Associations subject to the tax imposed by this section shall utilize that Kentucky apportionment fraction computed and utilized by its wholly owned Production Credit Association subsidiary for the same report period.

Effective: April 27, 2018

History: Amended 2018 Ky. Acts ch. 171, sec. 73, effective April 14, 2018; and ch. 207, sec. 73, effective April 27, 2018. -- Amended 2015 Ky. Acts ch. 67, sec. 6, effective June 24, 2015. -- Amended 2005 Ky. Acts ch. 85, sec. 319, effective June 20, 2005. -- Amended 2004 Ky. Acts ch. 142, sec. 6, effective April 21, 2004. -- Amended 1990 Ky. Acts ch. 262, sec. 3, effective July 13, 1990. -- Amended 1986 Ky. Acts ch. 496, sec. 6, effective August 1, 1986. -- Amended 1966 Ky. Acts ch. 255, sec. 132. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 876d.

Legislative Research Commission Note (4/27/2018). This statute was amended by 2018 Ky. Acts chs. 171 and 207, which do not appear to be in conflict and have been codified together.

Insurance Companies and Other Miscellaneous Taxes Insurance Companies and Other Miscellaneous Taxes

136.320 Tax on taxable capital of domestic life insurance companies in lieu of other taxes -- State and local rates.

(1) Each life insurance company incorporated under the laws of and doing business in Kentucky shall value as of January 1 and report to the Department of Revenue by April 1 each year, on forms prescribed by the Department of Revenue, the following:

(a) The fair cash value of the company's intangible personal property, hereinafter referred to as "capital," consisting of all money in hand, shares of stock, notes, bonds, accounts, and other credits, exclusive of due and deferred premiums, whether secured by mortgage, pledge, or otherwise, or unsecured.

(b) The fair cash value of the company's intangible personal property exempt from taxation by law.

(c) The aggregate amount of the company's reserves, reduced by the amount of due and deferred premiums, maintained in accordance with the applicable provisions of KRS 304.6-040 and 304.6-130 to 304.6-180, on all outstanding policies and contracts supplementary thereto.

(d) Other information as may be required by the Department of Revenue to accurately determine the fair cash value of each company's "taxable capital" and "taxable reserves."

(2) Based on information supplied by each company and other information that may be available, the Department of Revenue shall value each company's "taxable capital" and "taxable reserves" as follows:

(a) "Taxable capital" shall be determined by deducting "taxable reserves" from "capital," less exempt intangible personal property.

(b) "Taxable reserves" shall be determined by multiplying the aggregate amount of reserves as computed in subsection (1)(c) of this section by the percentage determined by dividing "capital," less exempt intangible personal property, by "capital," including exempt intangible personal property.

(3) (a) An annual tax for state purposes shall be imposed against the fair cash value of "taxable capital" for calendar years beginning before 2000, at a rate of seventy cents ($0.70) on each one hundred dollars ($100).

(b) An annual tax for state purposes shall be imposed against every company making an election pursuant to KRS 136.335 to be taxed under this section, against the fair cash value of taxable capital for calendar years beginning in 2000 as follows:

For calendar year 2000, fifty-six cents ($0.56) on each one hundred dollars ($100);
For calendar year 2001, forty-two cents ($0.42) on each one hundred dollars ($100);
For calendar year 2002, twenty-eight cents ($0.28) on each one hundred dollars ($100);
For calendar year 2003, fourteen cents ($0.14) on each one hundred dollars ($100); and
For calendar year 2004 and each calendar year thereafter, one tenth of one cent ($0.001) on each one hundred dollars ($100).

(c) An annual tax for state purposes shall be imposed at a rate of one-tenth of one cent ($0.001) on each one hundred dollars ($100) of the fair cash value of "taxable reserves".

(d) Beginning in tax year 2004 an insurer may offset the tax liability imposed under this subsection against the tax liability imposed under subsection (4) of this section.

(4) For calendar year 2000, and each calendar year thereafter, every company subject to the tax imposed by subsection (3) of this section, and making an election pursuant to KRS 136.335 to be taxed under this section, shall pay the following rates of tax upon each one hundred dollars ($100) of premium receipts:

(a) For calendar year 2000, thirty-eight cents ($0.38);

(b) For calendar year 2001, seventy-two cents ($0.72);

(d) For calendar year 2003, one dollar and twenty-eight cents ($1.28); and

(e) For calendar year 2004 and each calendar year thereafter, one dollar and fifty cents ($1.50). Every company subject to the tax imposed by this subsection shall, by March 1 of each year, return to the Department of Revenue a statement under oath of all premium receipts on business done in this state during the preceding calendar year or since the last return was made. "Premium receipts" includes single premiums, premiums received for original insurance, premiums received for renewal, revival, or reinstatement of the policies, annual and periodical premiums, dividends applied for premiums and additions, and all other premium payments received on policies that have been written in this state, or on the lives of residents of this state, or out of this state on business done in this state, less returned premiums. No deduction shall be made for dividends on life insurance but dividends on accident and health insurance policies may be deducted.

(5) The taxes imposed under subsections (3) and (4) of this section shall be in lieu of all excise, license, occupational, or other taxes imposed by the state, county, city, or other taxing district, except as provided in subsections (6) and (7) of this section.

(6) The county in which the principal office of the company is located may impose a tax of fifteen cents ($0.15) on each one hundred dollars ($100) of "taxable capital."

(7) The city in which the principal office of the company is located may impose a tax of fifteen cents ($0.15) on each one hundred dollars ($100) of "taxable capital."

(8) The Department of Revenue shall by September 1 each year bill each company for the state taxes. It shall immediately certify to the county clerk of the county in which the principal office of the company is located the value of "taxable capital" subject to local taxation. The county clerk shall prepare and deliver a bill to the sheriff for collection of taxes collectible by the sheriff and shall certify the value to all other collecting officers of districts authorized to levy a tax.

(9) Each company's real and tangible personal property shall be subject to taxation at fair cash value by the state, county, school, and other taxing districts in which the property is located in the same manner and at the same rates as all other property of the same class.

(10) Taxes on property subject to taxation under this section shall be subject to the same discount and penalties as provided in KRS 134.015 and shall be collected in the same manner as taxes on property locally assessed, except that the state tax on the "taxable capital" and "taxable reserves" shall be collected directly by the Department of Revenue.

(11) Any taxpayer subject to taxation under this section may protest in the manner provided in KRS 131.110.

Effective: January 1, 2010

History: Amended 2009 Ky. Acts ch. 10, sec. 50, effective January 1, 2010. -- Amended 2005 Ky. Acts ch. 85, sec. 320, effective June 20, 2005. -- Amended 1998 Ky. Acts ch. 233, sec. 1, effective July 15, 1998. -- Repealed and reenacted 1990 Ky. Acts ch. 476, Pt. V, sec. 358, effective July 13, 1990. -- Amended 1978 Ky. Acts ch. 384, sec. 282, effective January 17, 1978. -- Amended 1976 Ky. Acts ch. 93, sec. 11, effective January 1, 1977. -- Amended 1972 Ky. Acts ch. 203, sec. 8. -- Amended 1966 Ky. Acts ch. 160, secs. 1 and 2. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 4237a-1.

136.330 Tax on premium receipts life insurance company -- Exception.

(1) Every life insurance company doing business in this state, other than fraternal assessment life insurance companies, shall, by March 1 of each year, return to the Department of Revenue a statement under oath of all premium receipts on business done in this state during the preceding calendar year or since the last return was

made. "Premium receipts" includes single premiums, annuity premiums, premiums received for original insurance, premiums received for renewal, revival or reinstatement of the policies, annual and periodical premiums, dividends applied for premiums and additions, and all other premium payments received on policies that have been written in this state, or on the lives of residents of this state, or out of this state on business done in this state, less returned premiums. No deduction shall be made for dividends on life insurance or annuity policies, but dividends on accident and health insurance policies may be deducted. Premium receipts shall not include annuity premiums or annuity dividends beginning in calendar year 2000.

(2) (a) An annual tax on premium receipts shall be imposed against every company making a return under this subsection for calendar years beginning before 2000 at a rate of two dollars ($2) upon each one hundred dollars ($100) of premium receipts.

(b) An annual tax on premium receipts shall be imposed against every company making an election pursuant to KRS 136.335 to be taxed under this section, and every company making a return under this section, for calendar years beginning in 2000 as follows:

For calendar year 2000, one dollar and ninety cents ($1.90) upon each one hundred dollars ($100) of premium receipts;
For calendar year 2001, one dollar and eighty cents ($1.80) upon each one hundred dollars ($100) of premium receipts;
For calendar year 2002, one dollar and seventy cents ($1.70) upon each one hundred dollars ($100) of premium receipts;
For calendar year 2003, one dollar and sixty cents ($1.60) upon each one hundred dollars ($100) of premium receipts; and
For calendar year 2004 and each calendar year thereafter, one dollar and fifty cents ($1.50) on each one hundred dollars ($100) of premium receipts.

(3) The health insurance contract or contracts for state employees as authorized by KRS 18A.225 shall not be subject to taxation under this section.

Effective: June 20, 2005

History: Amended 2005 Ky. Acts ch. 85, sec. 321, effective June 20, 2005. -- Amended 2001 Ky. Acts ch. 164, sec. 6, effective June 21, 2001. -- Amended 1998 Ky. Acts ch. 82, sec. 15, effective July 15, 1998; and ch. 233, sec. 2, effective July 15, 1998. -- Amended 1988 Ky. Acts ch. 5, sec. 9, effective July 15, 1988. -- Amended 1986 Ky. Acts ch. 496, sec. 7, effective August 1, 1986. -- Amended 1984 Ky. Acts ch. 23, sec. 5, effective July 13, 1984. -- Amended 1966 Ky. Acts ch. 187, Part IV, sec. 1. -- Amended 1962 Ky. Acts ch. 208, sec. 1. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 4226.

136.335 Irrevocable election of method of taxation for domestic life insurance companies -- Time of filing.

Beginning with calendar year 2000, every life insurance company incorporated under the laws of and doing business in Kentucky shall make an irrevocable election whether to be taxed under the provisions of KRS 136.320 or 136.330. For insurance companies incorporated under the laws of and doing business in Kentucky, prior to January 1, 2000, the election shall be filed with the commissioner of insurance and the commissioner of the Department of Revenue on or before January 1, 2000. For insurance companies applying for a certificate to do business in Kentucky as a domestic life insurance company, after January 1, 2000, the election shall be filed with the company's initial application for certificate of authority to do business in Kentucky.

Effective: July 15, 2010

History: Amended 2010 Ky. Acts ch. 24, sec. 100, effective July 15, 2010. -- Amended 2005 Ky. Acts ch. 85, sec. 322, effective June 20, 2005. -- Created 1998 Ky. Acts ch. 233, sec. 3, effective July 15, 1998.

136.340 Tax on amounts paid to stock insurance companies, other than life.

(1) Every stock insurance company, other than life, doing business in this state shall, on or before the first day of March of each year, return to the Department of Revenue a statement under oath of all amounts paid to the company or its representative, whether designated as premiums or otherwise, for insurance or services incident thereto, on property or risks in this state during the preceding calendar year or since the last returns were made, including amounts received for reinsurance on Kentucky risks from unauthorized companies, and shall at the same time pay a tax of two dollars ($2) upon each one hundred dollars ($100) of such amounts paid to the company, less amounts returned on canceled policies and policies not taken.

(2) The health insurance contract or contracts for state employees as authorized by KRS 18A.225 shall not be subject to taxation under this section.

Effective: June 20, 2005

History: Amended 2005 Ky. Acts ch. 85, sec. 323, effective June 20, 2005. -- Amended 2001 Ky. Acts ch. 164, sec. 7, effective June 21, 2001. -- Amended 1998 Ky. Acts ch. 82, sec. 16, effective July 15, 1998. -- Amended 1988 Ky. Acts ch. 5, sec. 10, effective July 15, 1988. -- Amended 1986 Ky. Acts ch. 496, sec. 8, effective August 1, 1986. -- Amended 1984 Ky. Acts ch. 23, sec. 3, effective July 13, 1984. -- Amended 1966 Ky. Acts ch. 187, Part IV, sec. 2. -- Amended 1950 Ky. Acts ch. 126, sec. 1. -- Amended 1942 Ky. Acts ch. 155, secs. 1 and 5. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 4229.

136.350 Tax on amounts to mutual companies, other than life and Lloyd's insurers.

(1) All mutual companies other than life doing business under this law shall pay to the Department of Revenue on or before the first day of March in each year, a tax of two percent (2%) of all amounts paid to the company or its representative, whether designated as premiums or otherwise, for insurance or services incident thereto, including amounts paid for membership or policy dues or fees, on property or risks in this state during the preceding calendar year, including amounts received for reinsurance on Kentucky risks from unauthorized companies.

(2) In addition to the foregoing tax, mutual insurance companies and Lloyd's insurers shall pay an annual tax as prescribed for stock insurance companies by KRS 136.360 and for like purposes.

(3) In computing premiums upon which tax is to be paid there shall be deducted, in both direct and reinsurance business, return premiums on canceled policies and policies not taken, and dividends paid or credited to policyholders.

(4) The provisions of this section shall not apply to domestic mutual companies, cooperative or assessment fire insurance companies.

(5) The health insurance contract or contracts for state employees as authorized by KRS 18A.225 and 18A.228 shall not be subject to taxation under this section.

Effective: June 20, 2005

History: Amended 2005 Ky. Acts ch. 85, sec. 324, effective June 20, 2005. -- Amended 2001 Ky. Acts ch. 164, sec. 8, effective June 21, 2001. -- Amended 1998 Ky. Acts ch. 82, sec. 17, effective July 15, 1998. -- Amended 1988 Ky. Acts ch. 5, sec. 11, effective July 15, 1988. -- Amended 1984 Ky. Acts ch. 23, sec. 4, effective July 13, 1984. -- Amended 1966 Ky. Acts ch. 187, Part IV, sec. 3. -- Amended 1954 Ky. Acts ch. 224, sec. 1. -- Amended 1950 Ky. Acts ch. 126, sec. 2. -- Amended 1942 Ky. Acts ch. 155, secs. 3 and 7. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 743a-23.

136.360 Tax on amounts paid to stock insurance, to defray cost of administering fire prevention and insurance laws.

Every stock insurer other than life doing business in this state shall pay to the Department of Revenue on or before the first day of March of each year, for the purpose of defraying the expenses authorized by KRS Chapter 227, and KRS Chapter 304, Subtitle 24, three- fourths of one percent (0.75%) of all amounts paid to such insurance company or its representative, whether such payments are designated as premiums or otherwise, during the previous calendar year for fire insurance and that portion of the premium reasonably allocable to insurance against the hazard of fire included in other coverages other than life and disability insurances. In computing such amounts there shall be deducted amounts refunded on policies canceled or not taken, and dividends paid or credited to policyholders. All amounts so collected shall be deposited in the general expenditure fund in the State Treasury.

Effective: June 20, 2005

History: Amended 2005 Ky. Acts ch. 85, sec. 325, effective June 20, 2005. -- Amended 1978 Ky. Acts ch. 384, sec. 26, effective June 17, 1978. -- Amended 1974 Ky. Acts ch. 210, sec. 1. -- Amended 1972 Ky. Acts ch. 203, sec. 9. -- Amended 1966 Ky. Acts ch. 187, Part IV, sec. 4. -- Amended 1954 Ky. Acts ch. 224, sec. 2. -- Amended 1942 Ky. Acts ch. 155, secs. 2 and 6. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 762b-5.

136.370 Tax on attorneys for exchange of reciprocal or interinsurance contracts -- Additional tax on premiums of stock insurers.

Each attorney, for the exchange of reciprocal or interinsurance contracts, under KRS Chapter 304, shall pay to the Department of Revenue on or before March 1 of each year a tax of two percent (2%) of the gross premiums or deposits collected from subscribers in this state during the preceding calendar year, less all amounts returned to subscribers or accredited to their account as savings. In addition, the attorney shall pay an annual premium tax of three-fourths of one percent (0.75%) of all amounts as prescribed for every stock insurer by and for the purposes specified in KRS 136.360.

Effective: June 20, 2005

History: Amended 2005 Ky. Acts ch. 85, sec. 326, effective June 20, 2005. -- Amended 1966 Ky. Acts ch. 187, Part IV, sec. 5. -- Amended 1954 Ky. Acts ch. 224, sec. 3. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 743m-11.

136.372 Declaration of estimated tax -- Payment -- Adjustments -- Penalties.

(1) Any company whose tax, as provided in KRS 136.320, 136.330, 136.340, 136.350, 136.370, or 304.3-270 was five thousand dollars ($5,000) or more in the previous year shall file a declaration of estimated tax.

(2) The tax due shall be paid in three (3) installments, one-third (1/3) on or before June 1, one-third (1/3) on or before October 1, and the remainder on or before the following March 1.

(3) (a) Any adjustments may be made on or before October 1.

(b) All adjustments shall be made on or before March 1.

(c) If any taxpayer uses the amount of the tax liability for the previous calendar year as the estimate for the declaration, no penalties or interest shall apply to any subsequent adjustments.

(4) All taxes not paid when due may be subject to:

(a) A penalty of five percent (5%) per month, but not more than twenty-five percent (25%) penalty shall be assessed on any one (1) report; and

(b) Interest at the tax interest rate as defined in KRS 131.010(6) from the date the report was due.

Effective: July 14, 2022

History: Created 2022 Ky. Acts ch. 212, sec. 44, effective July 14, 2022.

Legislative Research Commission Note (7/14/2022). In codification, a correction has been made to subsection (1) of this statute. 2022 House Bill 8, which created this statute, included a reference to KRS 342.445. However, it is clear that the reference to KRS 342.445 was erroneous, as that statute was repealed in 1988. Under the authority of KRS 7.136, the Reviser of Statutes has removed the reference to KRS 342.445.

136.373 Repealed, 1966

[Repealed]

136.374 Tax credit for eligible rehabilitation expenses. (Effective July 1, 2027)

For calendar years beginning on or after January 1, 2028, but before January 1, 2032, a taxpayer incurring eligible rehabilitation expenses shall be allowed a refundable, transferable credit against the taxes imposed by KRS 136.320, 136.330, 136.340, 136.350, 136.370, 136.390, or 304.3-270, with the ordering of the credit as provided in KRS 136.376.

Effective: July 1, 2027

History: Created 2026 Ky. Acts ch. 198, sec. 32, effective July 1, 2027.

136.376 Priority of application and use of credits against insurance taxes. (Effective July 1, 2027)

(1) For purposes of the credit permitted by KRS 154.20-195, if a taxpayer is entitled to more than one (1) of the tax credits allowed against the taxes imposed by KRS 136.320, 136.330, 136.340, 136.350, 136.370, 136.390, and 304.3-270, the priority of application and use of the credit shall be determined as follows:

(a) The nonrefundable credits shall be taken in the following order:

The Kentucky Investment Fund Act credit permitted by KRS 154.20- 258; and
The New Markets Development Program credit permitted by KRS 141.434; and

(b) After the application of the nonrefundable credits in paragraph (a) of this subsection, the refundable certified mixed-use rehabilitation credit permitted by KRS 136.374 shall be taken.

(2) A taxpayer claiming a credit against any of the insurance premiums taxes imposed by KRS 136.320, 136.330, 136.340, 136.350, 136.370, or 136.390 shall not be required to pay additional retaliatory tax imposed by KRS 304.3-270.

(3) The Department of Revenue shall include information about this credit in the report required under KRS 141.3821(5).

Effective: July 1, 2027

History: Created 2026 Ky. Acts ch. 198, sec. 33, effective July 1, 2027.

136.377 Repealed, 2019.

[Repealed]

136.380 Repealed, 1944.

[Repealed]

136.381 Reports and payments due notwithstanding dissolution or retirement.

In the event any insurer dissolves or retires from this state, either voluntarily or involuntarily, during any calendar year, the dissolution or retirement shall not defeat or excuse the filing of reports and assessment and collection of taxes imposed by KRS 136.330 to 136.395, 299.530, 304.4-030, and 342.450, with respect to premiums written or deposits held during that part of the calendar year prior to the dissolution or retirement from this state.

Effective: July 13, 1984

History: Amended 1984 Ky. Acts ch. 113, sec. 1, effective July 13, 1984. -- Reenacted 1972 Ky. Acts ch. 203, sec. 11. -- Amended 1968 Ky. Acts ch. 152, sec. 108. -- Amended 1966 Ky. Acts ch. 187, Part IV, sec. 6. -- Created 1964 Ky. Acts ch. 96, sec. 4.

136.390 Tax on insurance companies other than stock or mutual.

(1) All associations of underwriters authorized under KRS 304.3-040, 304.3-140, 304.28-010, 304.28-030, 304.28-040, and 304.28-050, and their representatives, shall make the same reports as are required of foreign stock insurance companies and their representatives transacting the same or similar kinds of insurance business in this state, and shall pay the same taxes as are required to be paid by such companies.

(2) All foreign mutual assessment companies, associations, individual firms, underwriters or Lloyd's, having resident members doing business in this state, who shall enter into contracts of insurance with each other or into agreements to indemnify each other against losses by fire, lightning, windstorm or other casualties for which there is no premium charged or collected at the time insurance is made, shall be deemed to be doing an insurance business in this state, and shall annually, by July 30, pay to the Department of Revenue a license tax of two dollars ($2) upon each one hundred dollars ($100) of assessments paid or collected in any one (1)

year. Each resident member shall be liable to the state for the license tax and all interest and penalties.

(3) No person shall fail or refuse to make a report giving all the data and information necessary to determine the amount of revenue due under subsection (2) of this section, or fail to make the report provided for in subsection (2) of this section, or fail to pay the tax due thereon.

Effective: June 20, 2005

History: Amended 2005 Ky. Acts ch. 85, sec. 327, effective June 20, 2005. -- Amended 1972 Ky. Acts ch. 203, sec. 12. -- Amended 1966 Ky. Acts ch. 187, Part IV, sec. 7. -- Amended 1958 Ky. Acts ch. 126, sec. 11. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. secs. 743s-10, 4236.

136.392 Premium surcharge.

(1) (a) Every domestic, foreign, or alien insurer, other than life and health insurers, which is either subject to or exempted from Kentucky premium taxes as levied pursuant to the provisions of either KRS 136.340, 136.350, 136.370, or 136.390, shall charge and collect a surcharge of one dollar and eighty cents ($1.80) upon each one hundred dollars ($100) of premium, assessments, or other charges, except for those municipal premium taxes, made by it for insurance coverage provided to its policyholders, on risk located in this state, whether the charges are designated as premiums, assessments, or otherwise. The premium surcharge shall be collected by the insurer from its policyholders at the same time and in the same manner that its premium or other charge for the insurance coverage is collected. The premium surcharge shall be disclosed to policyholders pursuant to administrative regulations promulgated by the commissioner of insurance. However, no insurer or its agent shall be entitled to any portion of any premium surcharge as a fee or commission for its collection. On or before the twentieth day of each month, each insurer shall report and remit to the Department of Revenue, on forms as it may require, all premium surcharge moneys collected by it during its preceding monthly accounting period less any moneys returned to policyholders as applicable to the unearned portion of the premium on policies terminated by either the insured or the insurer. Insurers with an annual liability of less than one thousand dollars ($1,000) for each of the previous two (2) calendar years may report and remit to the Department of Revenue all premium surcharge moneys collected on a calendar year basis on or before the twentieth day of January of the following calendar year. The funds derived from the premium surcharge shall be deposited in the State Treasury, and shall constitute a fund allocated for the uses and purposes of the Firefighters Foundation Program fund, KRS 95A.220 and 95A.262, and the Law Enforcement Foundation Program fund, KRS 15.430.

(b) Effective July 1, 2019, the surcharge rate in paragraph (a) of this subsection shall only be adjusted by an Act of the General Assembly, and the adjusted rate shall be applied beginning ninety (90) days after the effective date of the Act.

(2) Within five (5) days after the end of each month, all insurance premium surcharge proceeds deposited in the State Treasury as set forth in this section shall be paid by the State Treasurer into the Firefighters Foundation Program fund trust and agency account and the Law Enforcement Foundation Program fund trust and agency account. The amount paid into each account shall be proportionate to each fund's respective share of the total deposits, pursuant to KRS 42.190. Moneys deposited to the Law Enforcement Foundation Program fund trust and agency account shall not be disbursed, expended, encumbered, or transferred by any state official for uses and purposes other than those prescribed by KRS 15.410 to 15.500, except that beginning with fiscal year 1994-95, through June 30, 1999, moneys remaining in the account at the end of the fiscal year in excess of three million dollars ($3,000,000) shall lapse. On and after July 1, 1999, moneys in this account shall not lapse. Money deposited to the Firefighters Foundation Program fund trust and agency account shall not be disbursed, expended, encumbered, or transferred by any state official for uses and purposes other than those prescribed by KRS 95A.200 to 95A.300, except that beginning with fiscal year 1994-95, through June 30, 1999, moneys remaining in the account at the end of the fiscal year in excess of three million dollars ($3,000,000) shall lapse, but moneys in the revolving loan fund established in KRS 95A.262 shall not lapse. On and after July 1, 1999, moneys in this account shall not lapse.

(3) Insurance premium surcharge funds collected from the policyholders of any domestic mutual company, cooperative, or assessment fire insurance company shall be deposited in the State Treasury, and shall be paid monthly by the State Treasurer into the Firefighters Foundation Program fund trust and agency account as provided in KRS 95A.220 to 95A.262. However, insurance premium surcharge funds collected from policyholders of any mutual company, cooperative, or assessment fire insurance company which transfers its corporate domicile to this state from another state after July 15, 1994, shall continue to be paid into the Firefighters Foundation Program fund and the Law Enforcement Foundation Program fund as prescribed.

(4) No later than July 1 of each year, the Department of Insurance shall provide the Department of Revenue with a list of all Kentucky-licensed property and casualty insurers and the amount of premium volume collected by the insurer for the preceding calendar year as set forth on the annual statement of the insurer. No later than September 1 of each year, the Department of Revenue shall calculate an estimate of the premium surcharge due from each insurer subject to the insurance premium surcharge imposed pursuant to this section, based upon the surcharge rate imposed pursuant to this section and the amount of the premium volume for each insurer as reported by the Department of Insurance. The Department of Revenue shall compare the results of this estimate with the premium surcharge paid by each insurer during the preceding year and shall provide the Legislative Research Commission, the Kentucky Fire Commission, the Kentucky Law Enforcement Council, and the Department of Insurance with a report detailing its findings on a cumulative basis. In accordance with KRS 131.190, the Department of Revenue shall not identify or divulge the confidential tax information of any individual insurer in this report.

(5) The insurance premiums surcharge provided in this section shall not apply to premiums collected from the following:

(a) The federal government;

(b) Resident educational and charitable institutions qualifying under Section 501(c)(3) of the Internal Revenue Code;

(d) State government for coverage of real property; or

(e) Local governments for coverage of real property.

(6) Pursuant to the Non-Admitted and Reinsurance Reform Act of 2010, Title V, Subtitle B, of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. No. 111-203, the insurance premium surcharge on non-admitted insurance for multistate risks shall be exempt from the provisions of this section but shall be subject to the provisions of KRS 304.10-180.

Effective: July 15, 2020

History: Amended 2020 Ky. Acts ch. 67, sec. 17, effective July 15, 2020. -- Amended 2019 Ky. Acts ch. 140, sec. 1, effective June 27, 2019. -- Amended 2012 Ky. Acts ch. 80, sec. 1, effective July 12, 2012. -- Amended 2011 Ky. Acts ch. 48, sec. 3, effective June 8, 2011. -- Amended 2010 Ky. Acts ch. 24, sec. 101, effective July 15, 2010. -- Repealed and reenacted 2009 Ky. Acts ch. 86, sec. 1, effective March 24, 2009. -- Amended 2008 Ky. Acts ch. 132, sec. 1, effective April 24, 2008. -- Amended 2007 Ky. Acts ch. 85, sec. 160, effective June 26, 2007. -- Amended 2005 Ky. Acts ch. 85, sec. 328, effective June 20, 2005. -- Amended 2002 Ky. Acts ch. 110, sec. 1, effective July 15, 2002. -- Amended 1998 Ky. Acts ch. 244, sec. 9, effective July 15, 1998; and ch. 510, sec. 9, effective July 15, 1998. -- Amended 1994 Ky. Acts ch. 97, sec. 4, effective July 15, 1994. – Amended 1992 Ky. Acts ch. 338, sec. 17, effective July 14, 1992; and ch. 381, sec. 1, effective July 14, 1992. -- Amended 1990 Ky. Acts ch. 481, sec. 3, effective July 13, 1990. -- Amended 1986 Ky. Acts ch. 425, sec. 1, effective July 15, 1986. -- Amended 1984 Ky. Acts ch. 300, sec. 1, effective July 13, 1984; and ch. 332, sec. 16, effective July 13, 1984. -- Created 1982 Ky. Acts ch. 246, sec. 1, effective April 1, 1982. 2026-2028 Budget Reference. See State/Executive Branch Budget, 2026 Ky. Acts ch. 168, Pt. V, C, 1 at 2166.

Legislative Research Commission Note (6/8/2011). A reference in subsection (6) of this statute to "Pub. L. No. 111-517," the Non-Admitted and Reinsurance Reform Act of 2010, Title V, Subtitle B, of the Dodd-Frank Wall Street Reform and Consumer Protection Act, has been changed in codification to "Pub. L. No. 111-203" to correct a manifest clerical or typographical error under the authority of KRS 7.136(1).

Legislative Research Commission Note (6/8/2011). 2011 Ky. Acts ch. 48, sec. 5, provided that the provisions contained in Sections 2, 3, and 4 of that Act "shall take effect as provided in Article XIII of Section 1 of this Act, upon legislative enactment of the compact into law by two compacting states, provided the commission shall become effective for purposes of adopting rules, and creating the clearinghouse when there are a total of ten compacting states and contracting states or, alternatively, when there are compacting states and contracting states representing greater than 40 percent of the surplus lines insurance premium volume based on records of the percentage of surplus lines insurance." The Reviser of Statutes has determined that, as of April 8, 2011, two states had enacted the compact, thereby triggering the initial effective date of the compact. Since 2011 Ky. Acts ch. 48, did not contain an emergency clause, this section became effective June 8, 2011, the normal effective date for 2011 legislation.

Legislative Research Commission Note (3/24/2009). 2009 Ky. Acts ch. 86, sec. 17, provides that "The intent of the General Assembly in repealing and reenacting KRS 136.392, 138.195, 141.160, 160.6156, 160.6157, 160.6158, 131.183, 141.044, 141.235, 134.580, 393.060, and 157.621 in Sections 1 to 12 of this Act is to affirm the amendments made to these sections in 2008 Ky. Acts ch. 132. The provisions in Sections 1 to 12 of this Act shall apply retroactively to April 24, 2008."

Legislative Research Commission Note (3/24/2009). 2009 Ky. Acts ch. 86, sec. 18, provides "To the extent that any provision included in this Act is considered new language, the provisions of KRS 446.145 requiring such new language to be underlined are notwithstood."

136.395 Hospital, medical or dental service companies exempt from premium tax.

No tax shall be imposed upon or measured by the premiums paid to or received by a hospital service corporation, a medical service plan corporation, a dental service plan corporation, or a domestic mutual insurer against the risk or cost of medical and/or surgical care organized under KRS 304.24-010 to 304.24-440 and KRS 304.32-010 to 304.32-270.

History: Amended 1972 Ky. Acts ch. 203, sec. 13. -- Created 1964 Ky. Acts ch. 183, sec. 1.

136.400 Repealed, 1984.

[Repealed]

136.410 Tax on bail bondsmen fees.

Every bail bondsman doing business in this Commonwealth shall, on or before the first day of March of each year, return to the Department of Revenue a statement of all amounts paid to him or his representatives, as premiums for bail bonds written in the courts of this Commonwealth during the preceding calendar year, or since the last returns were made, and shall at the same time pay a tax of two dollars ($2) upon each one hundred dollars ($100) of such amounts paid to the bail bondsman or his representatives. Amounts received for reimbursement for expenses or court costs are not to be considered as premiums for the purposes of this section.

Effective: June 20, 2005

History: Amended 2005 Ky. Acts ch. 85, sec. 329, effective June 20, 2005. -- Amended 2004 Ky. Acts ch. 24, sec. 45, effective July 13, 2004. -- Amended 1986 Ky. Acts ch. 496, sec. 9, effective August 1, 1986. -- Created 1974 Ky. Acts ch. 337, sec. 1.

Bank Franchise and Local Deposit Tax Bank Franchise and Local Deposit Tax

136.500 Definitions for KRS 136.500 to 136.575.

As used in KRS 136.500 to 136.575, unless the context requires otherwise:

(1) "Billing address" means the location indicated in the books and records of the financial institution, on the first day of the taxable year or the date in the taxable year when the customer relationship began, as the address where any notice, statement, or bill relating to a customer's account is mailed;

(2) "Borrower located in this state" means a borrower, other than a credit card holder, that is engaged in a trade or business that maintains its commercial domicile in this state or a borrower that is not engaged in a trade or business;

(3) "Credit card holder located in this state" means a credit card holder whose billing address is in this state;

(4) "Department" means the Department of Revenue;

(5) "Commercial domicile" means:

(a) The location from which the trade or business is principally managed and directed; or

(b) The state of the United States or the District of Columbia from which the financial institution's trade or business in the United States is principally managed and directed, if a financial institution is organized under the laws of a foreign country, the Commonwealth of Puerto Rico, or any territory or possession of the United States. It shall be presumed, subject to rebuttal, that the location from which the financial institution's trade or business is principally managed and directed is the state of the United States or the District of Columbia to which the greatest number of employees are regularly connected or out of which they are working, irrespective of where the services of the employees are performed, as of the last day of the taxable year;

(6) "Compensation" means wages, salaries, commissions, and any other form of remuneration paid to employees for personal services that are included in the employee's gross income under the Internal Revenue Code. In the case of employees not subject to the Internal Revenue Code, the determination of whether the payments would constitute gross income to the employees under the Internal Revenue Code shall be made as though the employees were subject to the Internal Revenue Code;

(7) "Credit card" means credit, travel, or entertainment card;

(8) "Credit card issuer's reimbursement fee" means the fee a financial institution receives from a merchant's bank because one (1) of the persons to whom the financial institution has issued a credit card has charged merchandise or services to the credit card;

(9) "Employee" means, with respect to a particular financial institution, "employee" as defined in Section 3121(d) of the Internal Revenue Code;

(10) "Financial institution" means:

(a) A national bank organized as a body corporate and existing or in the process of organizing as a national bank association pursuant to the provisions of the National Bank Act, 12 U.S.C. secs. 21 et seq., in effect on December 31, 1997, exclusive of any amendments made subsequent to that date;

(b) Any bank or trust company incorporated or organized under the laws of any state, except a banker's bank organized under KRS 286.3-135;

(c) Any corporation organized under the provisions of 12 U.S.C. secs. 611 to 631, in effect on December 31, 1997, exclusive of any amendments made subsequent to that date, or any corporation organized after December 31, 1997, that meets the requirements of 12 U.S.C. secs. 611 to 631, in effect on December 31, 1997; or

(d) Any agency or branch of a foreign depository as defined in 12 U.S.C. sec. 3101, in effect on December 31, 1997, exclusive of any amendments made subsequent to that date, or any agency or branch of a foreign depository established after December 31, 1997, that meets the requirements of 12 U.S.C.

sec. 3101 in effect on December 31, 1997;

(11) "Gross rents" means the actual sum of money or other consideration payable for the use or possession of property.

(a) "Gross rents" includes but is not limited to:

Any amount payable for the use or possession of real property or tangible property, whether designated as a fixed sum of money or as a percentage of receipts, profits, or otherwise;
Any amount payable as additional rent or in lieu of rent, such as interest, taxes, insurance, repairs, or any other amount required to be paid by the terms of a lease or other arrangement; and
A proportionate part of the cost of any improvement to real property made by or on behalf of the financial institution which reverts to the owner or lessor upon termination of a lease or other arrangement. The amount to be included in gross rents is the amount of amortization or depreciation allowed in computing the taxable income base for the taxable year. However, where a building is erected on leased land by or on behalf of the financial institution, the value of the land is determined by multiplying the gross rent by eight (8) and the value of the building is determined in the same manner as if owned by the financial institution;

(b) The following are not included in the term "gross rents":

Reasonable amounts payable as separate charges for water and electric service furnished by the lessor;
Reasonable amounts payable as service charges for janitorial services furnished by the lessor;
Reasonable amounts payable for storage, if these amounts are payable for space not designated and not under the control of the financial institution; and
That portion of any rental payment which is applicable to the space subleased from the financial institution and not used by it;

(12) "Internal Revenue Code" means the Internal Revenue Code, Title 26 U.S.C., in effect on December 31, 2001, exclusive of any amendments made subsequent to that date;

(13) "Loan" means any extension of credit resulting from direct negotiations between the financial institution and its customer, and the purchase, in whole or in part, of the extension of credit from another. Loans include participations, syndications, and leases treated as loans for federal income tax purposes. Loans shall not include properties treated as loans under Section 595 of the Internal Revenue Code, futures or forward contracts, options, notional principal contracts such as swaps, credit card receivables, including purchased credit card relationships, noninterest-bearing balances due from depository institutions, cash items in the process of collection, federal funds sold, securities purchased under agreements to resell, assets held in a trading account, securities, interests in a real estate mortgage investment company, or other mortgage-backed or asset-backed security, and other similar items;

(14) "Loan secured by real property" means a loan or other obligation for which fifty percent (50%) or more of the aggregate value of the collateral used to secure the loan or other obligation, when valued at fair market value as of the time the original loan or obligation was incurred, was real property;

(15) "Merchant discount" means the fee or negotiated discount charged to a merchant by the financial institution for the privilege of participating in a program where a credit card is accepted in payment for merchandise or services sold to the card holder;

(16) "Person" means an individual, estate, trust, partnership, corporation, limited liability company, or any other business entity;

(17) "Principal base of operations" means:

(a) With respect to transportation property, the place from which the property is regularly directed or controlled; and

(b) With respect to an employee:

The place the employee regularly starts work and to which the employee customarily returns in order to receive instructions from his or her employer; or
If the place referred to in subparagraph 1. of this paragraph does not exist, the place the employee regularly communicates with customers or other persons; or
If the place referred to in subparagraph 2. of this paragraph does not exist, the place the employee regularly performs any other functions necessary to the exercise of the employee's trade or profession at some other point or points;

(18) "Real property owned" and "tangible personal property owned" mean real and tangible personal property, respectively, on which the financial institution may claim depreciation for federal income tax purposes, or property to which the financial institution holds legal title and on which no other person may claim depreciation for federal income tax purposes or could claim depreciation if subject to federal income tax. Real and tangible personal property do not include coin, currency, or property acquired in lieu of or pursuant to a foreclosure;

(19) "Regular place of business" means an office at which the financial institution carries on its business in a regular and systematic manner and which is continuously maintained, occupied, and used by employees of the financial institution;

(20) "State" means a state of the United States, the District of Columbia, the Commonwealth of Puerto Rico, any territory or possession of the United States, or any foreign country;

(21) "Syndication" means an extension of credit in which two (2) or more persons fund and each person is at risk only up to a specified percentage of the total extension of credit or up to a specified dollar amount;

(22) (a) "Taxable year" means calendar year 1996 through calendar year 2020 for purposes of the state bank franchise tax under KRS 136.505; and

(b) "Taxable year" means calendar year 1996 and every calendar year thereafter for purposes of the local government franchise tax under KRS 136.575;

(23) "Transportation property" means vehicles and vessels capable of moving under their own power, such as aircraft, trains, water vessels, and motor vehicles, as well as any equipment or containers attached to the property, such as rolling stock, barges, or trailers;

(24) "United States obligations" means all obligations of the United States exempt from taxation under 31 U.S.C. sec. 3124(a) or exempt under the United States Constitution or any federal statute, including the obligations of any instrumentality or agency of the United States that are exempt from state or local taxation under the United States Constitution or any statute of the United States; and

(25) "Kentucky obligations" means all obligations of the Commonwealth of Kentucky, its counties, municipalities, taxing districts, and school districts, exempt from taxation under the Kentucky Revised Statutes and the Constitution of Kentucky.

Effective: June 27, 2019

History: Amended 2019 Ky. Acts ch. 196, sec. 9, effective June 27, 2019. -- Amended 2005 Ky. Acts ch. 85, sec. 330, effective June 20, 2005. -- Amended 2002 Ky. Acts ch. 255, sec. 1, effective July 15, 2002. -- Amended 1998 Ky. Acts ch. 402, sec. 1, effective April 7, 1998. -- Created 1996 Ky. Acts ch. 254, sec. 2, effective July 15, 1996.

Legislative Research Commission Note (6/27/2019). This statute was amended in 2019 Ky. Acts ch. 151, sec. 15 (HB 354) and ch. 196, sec. 9 (HB 458). Although HB 354 was enacted, 2019 Ky. Acts ch. 196, sec. 16 (HB 458) repealed certain sections of that prior Act, including Section 15, and directed the Reviser of Statutes to not codify them. Therefore, the amendment to this statute in 2019 Ky. Acts ch. 151, sec. 15, was not codified.

Legislative Research Commission Note (7/12/2006). 2006 Ky. Acts ch. 247 instructs the Reviser of Statutes to adjust KRS references throughout the statutes to conform with the 2006 renumbering of the Financial Services Code, KRS Chapter 286. Such an adjustment has been made in this statute.

136.505 Franchise tax for financial institutions for taxable years prior to January 1, 2021.

Every financial institution regularly engaged in business in this Commonwealth at any time during the taxable year as determined under KRS 136.520 shall pay an annual state franchise tax for each taxable year or portion of a taxable year prior to January 1, 2021, to be measured by its net capital as determined in KRS 136.515 and, for financial institutions with business activity that is taxable both within and without this Commonwealth, apportioned under KRS 136.525.

Effective: June 27, 2019

History: Amended 2019 Ky. Acts ch. 196, sec. 10, effective June 27, 2019. -- Amended 2006 (1st Extra. Sess.) Ky. Acts ch. 2, sec. 13, effective June 28, 2006. -- Created 1996 Ky. Acts ch. 254, sec. 3, effective July 15, 1996.

Legislative Research Commission Note (6/27/2019). This statute was amended in 2019 Ky. Acts ch. 151, sec. 16 (HB 354) and ch. 196, sec. 10 (HB 458). Although HB 354 was enacted, 2019 Ky. Acts ch. 196, sec. 16 (HB 458) repealed certain sections of that prior Act, including Section 16, and directed the Reviser of Statutes to not codify them. Therefore, the amendment to this statute in 2019 Ky. Acts ch. 151, sec. 16, was not codified.

Legislative Research Commission Note (6/28/2006). 2006 (1st Extra Sess.) Ky. Acts ch. 2, sec. 73, provides that "unless a provision of this Act specifically applies to an earlier tax year, the provisions of this Act shall apply to taxable years beginning on or after January 1, 2007."

136.506 Inapplicability of KRS 136.505 after January 1, 2021 -- Financial institutions subject to corporation income tax, limited liability entity tax, and applicable local government franchise taxes after January 1, 2021 -- Short-year returns.

(1) Beginning January 1, 2021, the state bank franchise tax under KRS 136.505 shall no longer apply to financial institutions.

(2) Beginning January 1, 2021, all financial institutions shall be subject to the corporation income tax under KRS 141.040 and the limited liability entity tax under KRS 141.0401. Notwithstanding KRS 141.040 and 141.0401, any financial institution operating on a fiscal year basis shall file a short-year corporation income and limited liability entity tax return and pay any tax due thereon for the period beginning January 1, 2021, through the end of the financial institution's normal fiscal year. The department may issue guidance regarding the filing of the short-year return.

(3) Financial institutions shall be subject to all applicable local government franchise taxes imposed under KRS 136.575.

Effective: June 27, 2019

History: Created 2019 Ky. Acts ch. 196, sec. 8, effective June 27, 2019.

136.510 Rate of franchise tax -- Minimum tax.

(1) The franchise tax imposed by KRS 136.505 shall be at the rate of one and one-tenth percent (1.1%) of net capital as determined by KRS 136.515 after apportionment, if applicable, under KRS 136.525.

(2) Each financial institution regularly engaged in business in this Commonwealth shall pay a minimum tax of three hundred dollars ($300) per year.

Effective: July 15, 1996

History: Created 1996 Ky. Acts ch. 254, sec. 4, effective July 15, 1996.

136.515 Net capital determination -- Effect of changes in identity, form, or place of organization -- Effect of combination of financial institutions.

(1) Net capital shall be determined by adding the value determined under subsection (2) of this section for the current taxable and preceding four (4) calendar years and dividing the resulting sum by five (5). If a financial institution has not been in existence for a period of five (5) calendar years, net capital shall be determined by adding together the values determined under subsection (2) of this section for the number of calendar years the financial institution has been in existence and dividing the resulting sum by the number of years the financial institution has been in existence. For purposes of this section, a partial year shall be treated as a full year.

(2) (a) The value of net capital for each year for purposes of subsection (1) of this section shall be determined by:

Adding together the book value of:

a. Capital stock paid in;

b. Surplus;

c. Undivided profits and capital reserves;

d. Net unrealized holding gains or losses on available for sale securities; and

e. Cumulative foreign currency translation adjustments; and

Deducting from the total determined under subparagraph 1. of this subsection an amount equal to the same percentage of the total as the book value of United States obligations and Kentucky obligations bears to the book value of the total assets of the financial institution.

(b) For purposes of this subsection, net capital shall include equity related to investment in subsidiaries.

(c) For purposes of this subsection, except as provided in paragraphs (d) and (e) of this subsection, the foregoing book values and deductions for United States obligations and Kentucky obligations for each year shall be determined by the reports of condition for each quarter filed in accordance with the requirements of the Board of Governors of the Federal Reserve System, the Comptroller of the Currency, the Federal Deposit Insurance Corporation, or other applicable regulatory authority. Book values shall be calculated by averaging the quarterly book values as determined by the reports of condition.

(d) For any year in which a financial institution does not file four (4) quarterly reports of condition, book values and deductions for United States obligations and Kentucky obligations shall be determined by adding together the respective book values and deductions for United States obligations and Kentucky obligations as determined by each quarterly report of condition filed for the year and the respective book values and deductions for United States obligations and Kentucky obligations determined in accordance with generally accepted accounting principles as of the end of each of the remaining quarters and dividing the resulting sums by four (4).

(e) For any calendar year in which a financial institution ceases to be in existence for four (4) quarters, other than by combination with another financial institution, the book value for that year shall be determined by adding together the book values and deductions for United States obligations and Kentucky obligations for each quarter in which the financial institution was in existence and dividing the sums by four (4).

(f) In the case of a financial institution which does not file reports of condition, book values shall be determined in accordance with generally accepted accounting principles.

(3) For purposes of this section:

(a) A change in identity, form, or place of organization of one (1) financial institution shall be treated as if a single financial institution had been in existence prior to as well as after the change;

(b) The combination of two (2) or more financial institutions into one (1) shall be treated as if the constituent financial institutions had been a single financial institution in existence prior to as well as after the combination, and the book values and deductions for United States obligations and Kentucky obligations from the reports of condition of the constituent institutions shall be combined. A combination shall include any acquisition required to be accounted for by the surviving financial institution under the pooling of interest method in accordance with generally-accepted accounting principles or a statutory merger or consolidation; and

(c) 1. The combination of one (1) or more financial institutions and one (1) or more savings and loan associations taxable under KRS 136.300 into a single financial institution shall be treated for the taxable year in which the combination occurred as if the single financial institution had been in existence prior to as well as after the combination, and the book values and deductions for United States obligations and Kentucky obligations from the reports of condition of the financial institution and the reports to the federal regulatory agency which are the equivalent of reports of condition for a savings and loan association shall be combined.

The conversion of a savings and loan association taxable under KRS 136.300 into a financial institution shall be treated for the taxable year in which the conversion occurred as if the savings and loan association had been a financial institution prior to as well as after the conversion, and the book values and deductions for United States obligations and Kentucky obligations from the reports to the federal regulatory agency which are the equivalent of reports of condition for a savings and loan association shall be used.
The savings and loan association shall not be relieved of the responsibilities of filing and paying tax under KRS 136.300 for taxable years prior to the year of any combination or conversion.
Notwithstanding any other provision of KRS 136.500 to 136.575, the financial institution resulting from a combination with or conversion of a saving and loan association shall receive a credit on the bank franchise tax return equal to the amount of tax paid under KRS 136.300 for the assessment date occurring within the taxable year during which the combination or conversion takes place for bank franchise tax purposes.

Effective: April 7, 1998

History: Amended 1998 Ky. Acts ch. 402, sec. 2, effective April 7, 1998. -- Created 1996 Ky. Acts ch. 254, sec. 5, effective July 15, 1996.

136.520 Conditions constituting regularly engaging in business in the Commonwealth by financial institutions.

(1) A financial institution is presumed to be regularly engaging in business in this Commonwealth if during any taxable year it obtains or solicits business with twenty

(20) or more persons within this Commonwealth, or if receipts attributable to sources in this Commonwealth as would be determined pursuant to the provisions of KRS 136.530(2) equals or exceeds one hundred thousand dollars ($100,000). In determining whether a financial institution is regularly engaging in business in this Commonwealth, receipts from the following types of property, as well as those contacts with this Commonwealth reasonably and exclusively required to evaluate and complete the acquisition or disposition of the property, the servicing of the property or the income from it, the collection of income from the property, or the acquisition or liquidation of collateral relating to the property, shall be excluded:

(a) An interest in a real estate mortgage investment conduit, a real estate investment trust, or a regulated investment company;

(b) An interest in a loan-backed security representing ownership or participation in a pool of promissory notes or certificates of interest that provide for payments in relation to payments or reasonable projections of payments on the notes or certificates;

(c) An interest in a loan or other asset from which the interest is attributed to a consumer loan, a commercial loan, or a secured commercial loan, and in which the payment obligations were solicited and entered into by a person that is independent, and not acting on behalf of the owner;

(d) An interest in the right to service or collect income from a loan or other asset from which interest on the loan is attributed as a loan described in paragraph

(c) of this subsection, and in which the payment obligations were solicited and entered into by a person that is independent and not acting on behalf of the owner; and

(e) Any amounts held in an escrow or trust account with respect to property described in paragraphs (a) to (d) of this subsection.

(2) Subsection (1) of this section shall be interpreted to reach to the limits permitted by the United States Constitution.

Effective: July 15, 1996

History: Created 1996 Ky. Acts ch. 254, sec. 6, effective July 15, 1996.

136.525 Apportionment of net capital for financial institutions with taxable business activity within and without the Commonwealth.

(1) A financial institution whose business activity is taxable both within and without this Commonwealth shall apportion its net capital pursuant to the provisions of this section.

(2) Net capital shall be apportioned to this Commonwealth by multiplying total net capital by the apportionment percentage. The apportionment percentage is determined by adding together the financial institution's receipts factor as determined under the provisions of KRS 136.530, property factor as determined under the provisions of KRS 136.535, and payroll factor as determined under the provisions of KRS 136.540 and dividing the sum by three (3). If one (1) of the factors is missing, the two (2) remaining factors are added and the sum is divided by two (2). If two (2) of the factors are missing, the remaining factor is the apportionment percentage. A factor is missing if both its numerator and denominator are zero (0), but it is not missing merely because the numerator is zero (0).

(3) Each factor shall be calculated by the method of accounting used by the financial institution for the taxable year.

(4) If the apportionment provisions of KRS 136.500 to 136.575 do not fairly represent the extent of the financial institution's business activity in this Commonwealth, the financial institution may petition for or the department may require, in respect to all or any part of the financial institution's business activity, if reasonable:

(a) Separate accounting;

(b) The exclusion of any one (1) or more of the factors;

(c) The inclusion of one (1) or more additional factors which will fairly represent the financial institution's business activity in this Commonwealth; or

(d) The employment of any other method to effectuate an equitable apportionment of the financial institution's net capital.

Effective: June 20, 2005

History: Amended 2005 Ky. Acts ch. 85, sec. 331, effective June 20, 2005. -- Created 1996 Ky. Acts ch. 254, sec. 7, effective July 15, 1996.

136.530 Calculation of receipts factor.

(1) The receipts factor is a fraction, the numerator of which is the receipts of the financial institution in this Commonwealth during the taxable year as determined by subsection (2) of this section and the denominator of which is the receipts of the financial institution within and without this Commonwealth during the taxable year. Receipts shall include the following:

(a) Receipts from the lease or rental of real property owned by the financial institution;

(b) Receipts from the lease or rental of tangible personal property owned by the financial institution;

(d) Interest and fees or penalties in the nature of interest from loans not secured by real property;

(e) Net gains from the sale of loans. Net gains from the sale of loans includes income recorded under the coupon stripping rules of Section 1286 of the Internal Revenue Code;

(f) Interest and fees or penalties in the nature of interest from credit card receivables and receipts from fees charged to card holders, such as annual fees;

(g) Net gains, but not less than zero (0), from the sale of credit card receivables;

(h) All credit card issuer's reimbursement fees;

(i) Receipts from merchant discount. Receipts from merchant discount shall be computed net of any cardholder charge backs, but shall not be reduced by any interchange transaction fees or by any issuer's reimbursement fees paid to another for charges made by its card holders;

(j) Loan servicing fees derived from loans secured by real property;

(k) Loan servicing fees derived from loans not secured by real property;

(l) Interest, dividends, net gains, but not less than zero (0), and other income from investment assets and activities and from trading assets and activities. Investment assets and activities and trading assets and activities include but are not limited to investment securities, trading account assets, federal funds, securities purchased and sold under agreements to resell or repurchase, options, futures contracts, forward contracts, notional principal contracts such as swaps, equities, and foreign currency transactions. The receipts factor shall include the following amounts:

The amount by which interest from federal funds sold and securities purchased under resale agreements exceeds interest expense on federal funds purchased and securities sold under repurchase agreements; and
The amount by which interest, dividends, gains, and other income from trading assets and activities, including but not limited to assets and activities in the matched book, in the arbitrage book, and foreign currency transactions, exceed amounts paid in lieu of interest, amounts paid in lieu of dividends, and losses from these assets and activities;

(m) All receipts derived from sales that would be included in the factor established by KRS 141.901; and

(n) Receipts from services not otherwise specifically listed.

(2) A determination of whether receipts should be included in the numerator of the fraction shall be made as follows:

(a) Receipts from the lease or rental of real property owned by the financial institution shall be included in the numerator if the property is located within this Commonwealth or receipts from the sublease of real property if the property is located within this Commonwealth.

(b) 1. Except as described in subparagraph 2. of this paragraph, receipts from the lease or rental of tangible personal property owned by the financial institution shall be included in the numerator if the property is located within this Commonwealth when it is first placed in service by the lessee.

Receipts from the lease or rental of transportation property owned by the financial institution are included in the numerator of the receipts factor to the extent that the property is used in this Commonwealth. The extent an aircraft will be deemed to be used in this Commonwealth and the amount of receipts that is to be included in the numerator of this Commonwealth's receipts factor is determined by multiplying all the receipts from the lease or rental of the aircraft by a fraction, the numerator of which is the number of landings of the aircraft in this Commonwealth and the denominator of which is the total number of landings of the aircraft. If the extent of the use of any transportation property within this Commonwealth cannot be determined, then the property shall be deemed to be used wholly in the state in which the property has its principal base of operations. A motor vehicle shall be deemed to be used wholly in the state in which it is registered.

(c) 1. Interest and fees or penalties in the nature of interest from loans secured by real property shall be included in the numerator if the property is located within this Commonwealth. If the property is located both within this Commonwealth and one (1) or more other states, receipts shall be included if more than fifty percent (50%) of the fair market value of the real property is located within this Commonwealth. If more than fifty percent (50%) of the fair market value of the real property is not located within any one (1) state, then the receipts described in this subparagraph shall be included in the numerator if the borrower is located in this Commonwealth.

The determination of whether the real property securing a loan is located within this Commonwealth shall be made as of the time the original agreement was made, and any subsequent substitutions of collateral shall be disregarded.

(d) Interest and fees or penalties in the nature of interest from loans not secured by real property shall be included in the numerator if the borrower is located in this Commonwealth.

(e) Net gains from the sale of loans shall be included in the numerator as provided in subparagraphs 1. and 2. of this paragraph. Net gains from the sale of loans includes income recorded under the coupon stripping rules of Section 1286 of the Internal Revenue Code.

The amount of net gains, but not less than zero (0), from the sale of loans secured by real property included in the numerator is determined by multiplying net gains by a fraction the numerator of which is the amount included in the numerator of the receipts factor pursuant to paragraph (c) of this subsection and the denominator of which is the total amount of interest and fees or penalties in the nature of interest from loans secured by real property.
The amount of net gains, but not less than zero (0), from the sale of loans not secured by real property included in the numerator is determined by multiplying net gains by a fraction the numerator of which is the amount included in the numerator of the receipts factor pursuant to paragraph (d) of this subsection and the denominator of which is the total amount of interest and fees or penalties in the nature of interest from loans not secured by real property.

(f) Interest and fees or penalties in the nature of interest from credit card receivables and receipts from fees charged to card holders, such as annual fees, shall be included in the numerator if the billing address of the card holder is in this Commonwealth.

(g) Net gains, but not less than zero (0), from the sale of credit card receivables to be included in the numerator shall be determined by multiplying the amount established in paragraph (g) of subsection (1) of this section by a fraction the numerator of which is the amount included in the numerator of the receipts factor pursuant to paragraph (f) of this subsection and the denominator of which is the financial institution's total amount of interest and fees or penalties in the nature of interest from credit card receivables and fees charged to card holders.

(h) Credit card issuer's reimbursement fees to be included in the numerator shall be determined by multiplying the amount established in paragraph (h) of subsection (1) of this section by a fraction the numerator of which is the amount included in the numerator of the receipts factor pursuant to paragraph

(f) of this subsection and the denominator of which is the financial institution's total amount of interest and fees or penalties in the nature of interest from credit card receivables and fees charged to card holders.

(i) Receipts from merchant discount shall be included in the numerator if the commercial domicile of the merchant is in this Commonwealth. Receipts from merchant discount shall be computed net of any cardholder charge backs but shall not be reduced by any interchange transaction fees or by any issuer's reimbursement fees paid to another for charges made by its card holders.

(j) 1. a. Loan servicing fees derived from loans secured by real property to be included in the numerator shall be determined by multiplying the amount determined under paragraph (j) of subsection (1) of this section by a fraction the numerator of which is the amount included in the numerator of the receipts factor pursuant to paragraph (c) of this subsection and the denominator of which is the total amount of interest and fees or penalties in the nature of interest from loans secured by real property.

b. Loan servicing fees derived from loans not secured by real property to be included in the numerator shall be determined by multiplying the amount determined under paragraph (k) of subsection (1) of this section by a fraction the numerator of which is the amount included in the numerator of the receipts factor pursuant to paragraph (d) of this subsection and the denominator of which is the total amount of interest and fees or penalties in the nature of interest from loans not secured by real property.

In circumstances in which the financial institution receives loan servicing fees for servicing either the secured or the unsecured loans of another, the numerator of the receipts factor shall include the fees if the borrower is located in this Commonwealth.

(k) Receipts from services not otherwise apportioned under this section shall be included in the numerator if the service is performed in this Commonwealth. If the service is performed both within and without this Commonwealth, the numerator of the receipts factor includes receipts from services not otherwise apportioned under this section, if a greater proportion of the income- producing activity is performed in this Commonwealth based on cost of performance.

(l) 1. The numerator of the receipts factor includes interest, dividends, net gains, but not less than zero (0), and other income from investment assets and activities and from trading assets and activities described in paragraph (l) of subsection (1) of this section that are attributable to this Commonwealth.

a. The amount of interest, dividends, net gains, but not less than zero (0), and other income from investment assets and activities in the investment account to be attributed to this Commonwealth and included in the numerator is determined by multiplying all income from the assets and activities by a fraction the numerator of which is the average value of the assets that are properly assigned to a regular place of business of the financial institution within this Commonwealth and the denominator of which is the average value of all the assets.

b. The amount of interest from federal funds sold and purchased and from securities purchased under resale agreements and securities sold under repurchase agreements attributable to this Commonwealth and included in the numerator is determined by multiplying the amount described in subparagraph 1. of paragraph

(l) of subsection (1) of this section from funds and securities by a fraction the numerator of which is the average value of federal funds sold and securities purchased under agreements to resell which are properly assigned to a regular place of business of the financial institution within this Commonwealth and the denominator of which is the average value of all funds and securities.

c. The amount of interest, dividends, gains, and other income from trading assets and activities, including but not limited to assets and activities in the matched book, in the arbitrage book, and foreign currency transactions, but excluding amounts described in subdivisions a. and b. of this subparagraph, attributable to this Commonwealth and included in the numerator is determined by multiplying the amount described in subparagraph 2. of paragraph

(l) of subsection (1) of this section by a fraction the numerator of which is the average value of trading assets which are properly assigned to a regular place of business of the financial institution within this Commonwealth and the denominator of which is the average value of all assets.

d. For purposes of this subparagraph, average value shall be determined using the rules for determining the average value of tangible personal property set forth in KRS 136.535(3) and (4).

In lieu of using the method set forth in subparagraph 1. of this paragraph, the financial institution may elect, or the department may require in order to fairly represent the business activity of the financial institution in this Commonwealth, the use of the method set forth in this subparagraph.

a. The amount of interest, dividends, net gains, but not less than zero (0), and other income from investment assets and activities in the investment account to be attributed to this Commonwealth and included in the numerator is determined by multiplying all income from assets and activities by a fraction the numerator of which is the gross income from assets and activities which are properly assigned to a regular place of business of the financial institution within this Commonwealth and the denominator of which is the gross income from all assets and activities.

(l) of subsection (1) of this section from funds and securities by a fraction the numerator of which is the gross income from funds and securities which are properly assigned to a regular place of business of the financial institution within this Commonwealth and the denominator of which is the gross income from all funds and securities.

c. The amount of interest, dividends, gains, and other income from trading assets and activities, including but not limited to assets and activities in the matched book, in the arbitrage book and foreign currency transactions, but excluding amounts described in subdivisions a. and b. of this subparagraph, attributable to this Commonwealth and included in the numerator is determined by multiplying the amount described in subparagraph 2. of paragraph

(l) of subsection (1) of this section by a fraction the numerator of which is the gross income from trading assets and activities which are properly assigned to a regular place of business of the financial institution within this Commonwealth and the denominator of which is the gross income from all assets and activities.

If the financial institution elects or is required by the department to use the method set forth in subparagraph 2. of this paragraph, it shall use this method on all subsequent returns unless the financial institution receives prior permission from the department to use, or the department requires, a different method.
The financial institution shall have the burden of proving that an investment asset or activity or trading asset or activity was properly assigned to a regular place of business outside this Commonwealth by demonstrating that the day-to-day decisions regarding the asset or activity occurred at a regular place of business outside this Commonwealth. Where the day-to-day decisions regarding an investment asset or activity or trading asset or activity occur at more than one (1) regular place of business and one (1) regular place of business is in this Commonwealth and one (1) regular place of business is outside this Commonwealth, the asset or activity shall be considered to be located at the regular place of business of the financial institution where the investment or trading policies or guidelines with respect to the asset or activity are established. Unless the financial institution demonstrates to the contrary, the policies and guidelines shall be presumed to be established at the commercial domicile of the financial institution.

(m) The numerator of the receipts factor includes all other receipts derived from sales as determined in KRS 141.901.

(n) 1. All receipts that would be assigned under this section to a state in which the financial institution is not taxable shall be included in the numerator of the receipts factor, if the financial institution's commercial domicile is in this Commonwealth.

For purposes of subparagraph 1. of this paragraph, "taxable" means either:

a. That a financial institution is subject in another state to a net income tax, a franchise tax measured by net income, a franchise tax for the privilege of doing business, a corporate stock tax including a bank shares tax, a single business tax, an earned surplus tax, or any tax which is imposed upon or measured by net income; or

b. That another state has statutory authority to subject the financial institution to any of the taxes in subdivision a. of this subparagraph, whether in fact the state does or does not impose the tax.

Effective: April 27, 2018

History: Amended 2018 Ky. Acts ch. 171, sec. 74, effective April 14, 2018; and ch. 207, sec. 74, effective April 27, 2018. -- Amended 2005 Ky. Acts ch. 85, sec. 332, effective June 20, 2005; and ch. 168, sec. 33, effective March 18, 2005. -- Created 1996 Ky. Acts ch. 254, sec. 8, effective July 15, 1996.

Legislative Research Commission Note (4/27/2018). This statute was amended by 2018 Ky. Acts chs. 171 and 207, which do not appear to be in conflict and have been codified together.

Legislative Research Commission Note (3/18/2005). 2005 Ky. Acts ch. 168, sec. 165, provides that this section shall apply to tax years beginning on or after January 1, 2005.

Legislative Research Commission Note (7/15/96). In codifying subsections (1)(m) and (2)(m) of this statute, references to Section 28 of 1996 Ky. Acts ch. 254 (KRS 134.380) have been shown instead as references to Section 31 of that Act (KRS 136.070). Without changing these references or the text of the material referred to, House Floor Amendment 1 to House Bill 416 (which became Acts ch. 254) added three new sections to the bill and changed the numbering of the original Section 28 (KRS 136.070) to Section 31 but did not make the necessary corresponding adjustment to these internal references. This action has been taken under KRS 7.136(1)(h).

136.535 Calculation of property factor.

(1) As used in this section:

(a) "Administration" means the process of managing an account. The process includes bookkeeping, collecting the payments, corresponding with the customer, reporting to management regarding the status of the agreement and proceeding against the borrower or the security interest if the borrower is in default. The activity is located at the regular place of business that oversees this activity;

(b) "Approval" means the procedure whereby employees or the board of directors of the financial institution make the final determination whether to enter into the agreement. The activity is located at the regular place of business which the financial institution's employees making the final determination are regularly connected with or working out of, regardless of where the services of the employees were actually performed. If the board of directors makes the final determination, the activity is located at the commercial domicile of the financial institution;

(c) "Investigation" means the procedure whereby employees of the financial institution determine the credit worthiness of the customer as well as the degree of risk involved in making a particular agreement. The activity is located at the regular place of business which the financial institution's employees making the investigation are regularly connected with or working out of, regardless of where the services of the employees were actually performed;

(d) "Negotiation" means the procedure whereby employees of the financial institution and its customer determine the terms of the agreement, including the amount, duration, interest rate, frequency of repayment, currency denomination, and security required. The activity is located at the regular place of business which the financial institution's employees are regularly connected with or out of, regardless of where the services of the employees were actually performed;

(e) "Participation" means an extension of credit in which an undivided ownership interest is held on a pro rata basis in a single loan or pool of loans and related collateral. In a loan participation, the credit originator initially makes the loan and then subsequently resells all or a portion of it to other lenders. The participation may or may not be known to the borrower; and

(f) "Solicitation" occurs when:

An employee of the financial institution initiates contact with the customer. The activity is located at the regular place of business which the financial institution's employee making the contact is regularly connected with or working out of, regardless of where the services of the employee were actually performed; or
The customer initiates the contact with the financial institution. If the customer's initial contact was not at a regular place of business of the financial institution, the regular place of business, if any, where the solicitation occurred is determined by the facts in each case.

(2) The property factor is a fraction, the numerator of which is the average value of real property and tangible personal property rented to the financial institution that is located or used within this Commonwealth during the taxable year, the average value of the financial institution's real and tangible personal property owned that is located or used within this Commonwealth during the taxable year, and the average value of the financial institution's loans and credit card receivables that are located within this Commonwealth during the taxable year, and the denominator of which is the average value of all such property located or used within and without this Commonwealth during the taxable year. Average value of property is determined under subsection (4) of this section.

(3) (a) The value of real property and tangible personal property owned by the financial institution is the original cost or other basis of property for federal income tax purposes without regard to depletion, depreciation, or amortization.

(b) Loans are valued at their outstanding principal balance, without regard to any reserve for bad debts. If a loan is charged off in whole or in part for federal income tax purposes, the portion of the loan charged off is not outstanding. A specifically-allocated reserve established pursuant to regulatory or financial accounting guidelines which is treated as charged off for federal income tax purposes shall be treated as charged off for purposes of this section.

(c) Credit card receivables are valued at their outstanding principal balance, without regard to any reserve for bad debts. If a credit card receivable is charged off in whole or in part for federal income tax purposes, the portion of the receivable charged off is not outstanding.

(4) The average value of property owned by the financial institution is computed on an annual basis by adding the value of the property on the first day of the taxable year and the value on the last day of the taxable year and dividing the sum by two (2). If averaging on this basis does not properly reflect average value, the department may require averaging on a more frequent basis. The financial institution may request permission from the department to average on a more frequent basis. When averaging on a more frequent basis is authorized by the department, the same method of valuation shall be used consistently by the financial institution with respect to property within and without this Commonwealth and on all subsequent returns unless the financial institution receives prior permission from the department or the department requires a different method of determining average value.

(5) (a) The average value of real property and tangible personal property that the financial institution has rented from another and which is not treated as property owned by the financial institution for federal income tax purposes shall be determined annually by multiplying the gross rents payable during the taxable year by eight (8).

(b) Where the use of the general method described in this subsection results in inaccurate valuations of rented property, any other method which properly reflects the value may be adopted by the department or by the financial institution when approved in writing by the department. Once approved, the alternative method of valuation shall be used on all subsequent returns unless the financial institution receives prior approval from the department or the department requires a different method of valuation.

(6) (a) Except as described in paragraph (b) of this subsection, real property and tangible personal property owned by or rented to the financial institution is considered to be located within this Commonwealth if it is physically located, situated, or used within this Commonwealth.

(b) Transportation property is included in the numerator of the property factor to the extent that the property is used in this Commonwealth. The extent to which an aircraft shall be deemed to be used in this Commonwealth and the amount of value that is to be included in the numerator of this Commonwealth's property factor is determined by multiplying the average value of the aircraft by a fraction the numerator of which is the number of landings of the aircraft in this Commonwealth and the denominator of which is the total number of landings of the aircraft everywhere. If the extent of the use of any transportation property within this Commonwealth cannot be determined, then the property shall be deemed to be used wholly in the state in which the property has its principal base of operations. A motor vehicle shall be deemed to be used wholly in the state in which it is registered.

(7) (a) 1. A loan is considered to be located within this Commonwealth if it is properly assigned to a regular place of business of the financial institution within this Commonwealth.

A loan is properly assigned to the regular place of business with which it has a preponderance of substantive contacts. A loan assigned by the financial institution to a regular place of business without the Commonwealth shall be presumed to have been properly assigned if:

a. The financial institution has assigned, in the regular course of its business, the loan on its records to a regular place of business consistent with federal or state regulatory requirements;

b. The assignment on its records is based upon substantive contacts of the loan to the regular place of business; and

c. The financial institution uses the records reflecting assignment of loans for the filing of all state and local tax returns for which an assignment of loans to a regular place of business is required.

The presumption of proper assignment of a loan provided in subparagraph 2. of this paragraph may be rebutted upon a showing by the department, supported by a preponderance of the evidence, that the preponderance of substantive contacts regarding the loan did not occur at the regular place of business to which it was assigned on the financial institution's records. When the presumption has been rebutted, the loan shall then be located within this Commonwealth if the financial institution had a regular place of business within this Commonwealth at the time the loan was made and the financial institution fails to show, by a preponderance of the evidence, that the preponderance of substantive contacts regarding the loan occurred outside this Commonwealth.

(b) For financial institutions with commercial domicile in this Commonwealth as defined in KRS 136.500, it shall be presumed, subject to rebuttal by the financial institution on a showing supported by the preponderance of evidence, that the preponderance of substantive contacts regarding the loan occurred within this Commonwealth.

(c) To determine the state in which the preponderance of substantive contacts relating to a loan have occurred, the facts and circumstances regarding the loan at issue shall be reviewed on a case-by-case basis, and consideration shall be given to activities such as the solicitation, investigation, negotiation, approval, and administration of the loan as defined in subsection (1) of this section.

(8) Credit card receivables shall be treated as loans and shall be subject to the provisions of subsection (7) of this section.

(9) A loan that has been properly assigned to a state shall, absent any change of material fact, remain assigned to that state for the length of the original term of the

loan. Thereafter, the loan may be properly assigned to another state if that loan has a preponderance of substantive contacts to a regular place of business there.

Effective: June 20, 2005

History: Amended 2005 Ky. Acts ch. 85, sec. 333, effective June 20, 2005. -- Created 1996 Ky. Acts ch. 254, sec. 9, effective July 15, 1996.

136.540 Calculation of payroll factor.

(1) The payroll factor is a fraction the numerator of which is the total amount paid in this Commonwealth during the taxable year by the financial institution for compensation and the denominator of which is the total compensation paid both within and without this Commonwealth during the taxable year.

(2) The compensation of any employee for services or activities which are not connected with business activities and payments made to any independent contractor or any other person not properly classifiable as an employee shall be excluded from both the numerator and denominator of the factor.

(3) Compensation is paid in this Commonwealth if any one of the following tests is met:

(a) The employee's services are performed entirely within this Commonwealth.

(b) The employee's services are performed both within and without the Commonwealth, but the service performed without the Commonwealth is incidental to the employee's service within the Commonwealth. The term "incidental" means any service which is temporary or transitory in nature, or which is rendered in connection with an isolated transaction.

(c) If the employee's services are performed both within and without this Commonwealth, the employee's compensation will be attributed to this Commonwealth if:

The employee's principal base of operations is within this Commonwealth;
There is no principal base of operations in any state in which some part of the services are performed, but the place from which the services are directed or controlled is in this Commonwealth; or
The principal base of operations and the place from which the services are directed or controlled are not in any state in which some part of the service is performed but the employee's residence is in this Commonwealth.

Effective: July 15, 1996

History: Created 1996 Ky. Acts ch. 254, sec. 10, effective July 15, 1996.

136.545 Tax returns -- Extension of time for filing.

(1) On or before the March 15 following each taxable year, a return for the preceding taxable year shall be filed with the department in the form and manner prescribed by the department, together with payment of any tax due.

(2) A return shall be filed by each financial institution.

(3) The return shall show the amount of taxes for the period covered by the return and other information necessary for the proper administration of KRS 136.500 to 136.575.

(4) The department shall, upon written request received on or prior to the due date of the return and tax, grant an automatic extension of up to ninety (90) days for the filing of returns. An extension of time to file a return does not extend the payment of tax due, which shall be estimated by the financial institution and paid on or before the date specified in subsection (1) of this section.

(5) If the time for filing a return is extended, the financial institution shall pay, as part of the tax, an amount equal to the tax interest rate as defined in KRS 131.010(6) on the tax shown due on the return but not previously paid, from the time the tax was due until the return is actually filed with the department.

Effective: June 20, 2005

History: Amended 2005 Ky. Acts ch. 85, sec. 334, effective June 20, 2005. -- Created 1996 Ky. Acts ch. 254, sec. 11, effective July 15, 1996.

136.550 Examination and audit of tax returns -- Assessment of excess.

(1) As soon as practicable after each return is received, the department shall examine and audit it. If the amount of tax computed by the department is greater than the amount returned by the financial institution, the excess shall be assessed by the department within four (4) years from the date prescribed by law for the filing of a return including an extension of time for filing, except as provided in this subsection. A notice of the assessment shall be mailed to the financial institution.

(a) In the case of a failure to file a return or of a fraudulent return, the excess may be assessed at any time.

(b) In the case of a return wherein a financial institution understates its net capital or omits from net capital an amount properly includible therein or both, which understatement or omission or both is in excess of twenty-five percent (25%) of the amount of net capital stated in the return, the excess may be assessed at any time within six (6) years after the return was filed.

(2) For the purpose of subsection (1) of this section, a return filed before the last day prescribed by law for the filing shall be considered as filed on the last day. The times provided for in subsection (1) of this section may be extended by agreement between the financial institution and the department.

Effective: June 20, 2005

History: Amended 2005 Ky. Acts ch. 85, sec. 335, effective June 20, 2005. -- Created 1996 Ky. Acts ch. 254, sec. 12, effective July 15, 1996.

136.555 Refunds or credits for overpayment of tax.

(1) Refunds or credits for overpayments of the tax imposed by KRS 136.505 shall be obtained in accordance with KRS 134.580.

(2) Refund or credits for overpayments of the tax imposed by KRS 136.575 shall be obtained in accordance with KRS 134.590.

Effective: June 24, 2015

History: Amended 2015 Ky. Acts ch. 67, sec. 7, effective June 24, 2015. -- Created 1996 Ky. Acts ch. 254, sec. 13, effective July 15, 1996.

136.560 Recordkeeping procedures and retention.

(1) Every financial institution shall keep records, receipts, invoices, and other pertinent papers in the form as the department may require.

(2) Every financial institution that files the returns required under KRS 136.545 shall keep records for not less than six (6) years from the making of records unless the department in writing authorizes their destruction at an earlier date.

Effective: June 20, 2005

History: Amended 2005 Ky. Acts ch. 85, sec. 336, effective June 20, 2005. -- Created 1996 Ky. Acts ch. 254, sec. 14, effective July 15, 1996.

136.565 Liability of corporate officers for taxes.

Notwithstanding any other provisions of KRS 136.500 to 136.575, the president, vice president, secretary, treasurer, or any other person holding any equivalent corporate office of any financial institution subject to the provisions of KRS 136.500 to 136.575 shall be personally and individually liable jointly and severally, for the taxes under KRS 136.500 to 136.575 in the event that the financial institution is unable to make payment. Neither the corporate dissolution or withdrawal of the financial institution from the Commonwealth nor the cessation of holding any corporate office shall discharge the liability imposed by this section. The personal and individual liability shall apply to each and every person holding a corporate office at the time the taxes become or became due. No person will be personally and individually liable pursuant to this section if that person did not have authority in the management of the business or financial affairs of the financial institution at the time the taxes imposed by KRS 136.500 to 136.575 become or became due. "Taxes" as used in this section includes interest accrued at the rate provided by KRS 131.010(6) and all applicable penalties and fees imposed under the provisions of KRS 136.500 to 136.575 and KRS 131.180, 131.440, and 131.990.

Effective: July 15, 1996

History: Created 1996 Ky. Acts ch. 254, sec. 15, effective July 15, 1996.

136.570 Penalties -- Limitation on administrative or court proceedings by delinquent financial institutions.

(1) Penalties shall be assessed in accordance with KRS 131.180.

(2) Any financial institution subject to the annual franchise tax imposed by KRS 136.505 that fails to file a return as required by KRS 136.545 or that fails to pay the tax as listed on the return shall not maintain an action, suit, or proceeding in any court or before any agency in this Commonwealth or enforce in any way any obligation of any debts until the return is filed and the tax listed on the return is paid.

Effective: July 15, 1996

History: Created 1996 Ky. Acts ch. 254, sec. 16, effective July 15, 1996.

136.575 Local government franchise taxes -- Filing of report of deposits -- Tax rate.

(1) As used in this section:

(a) "Deposits" means all demand and time deposits, excluding deposits of the United States government, state and political subdivisions, other financial institutions, public libraries, educational institutions, religious institutions, charitable institutions, and certified and officers' checks; and

(b) "Financial institution" means:

A national bank organized as a body corporate and existing or in the process of organizing as a national bank association pursuant to the provisions of the National Bank Act, 12 U.S.C. secs. 21 et seq., in effect on December 31, 1997, exclusive of any amendments made subsequent to that date;
Any bank or trust company incorporated or organized under the laws of any state, except a banker's bank organized under KRS 286.3-135;
Any corporation organized under the provisions of 12 U.S.C. secs. 611 to 631, in effect on December 31, 1997, exclusive of any amendments made subsequent to that date, or any corporation organized after December 31, 1997, that meets the requirements of 12 U.S.C. secs. 611 to 631, in effect on December 31, 1997; or
Any agency or branch of a foreign depository as defined in 12 U.S.C.

sec. 3101, in effect on December 31, 1997, exclusive of any amendments made subsequent to that date, or any agency or branch of a foreign depository established after December 31, 1997, that meets the requirements of 12 U.S.C. sec. 3101 in effect on December 31, 1997.

(2) Counties, cities, and urban-county governments may impose a franchise tax on financial institutions measured by the deposits in the institutions located within the jurisdiction of the county, city, or urban-county government at a rate not to exceed twenty-five thousandths of one percent (0.025%) of the deposits if imposed by counties and cities and at a rate not to exceed fifty thousandths of one percent (0.050%) of the deposits if imposed by urban-county governments. The amount and location of deposits in the financial institutions shall be determined by the method used for filing the summary of deposits report with the Federal Deposit Insurance Corporation. The accounting method used to allocate deposits for completion of the summary of deposits shall be the same as has been utilized in prior periods. Any deviation from prior accounting methods may only be adopted with the permission of the department.

(3) By August 15, 1997, and annually thereafter, each financial institution shall file with the department, on a form prescribed by the department, a report of all deposits located within this Commonwealth as of the preceding June 30, along with a copy of the most recent summary of deposits filed with the Federal Deposit Insurance Corporation. The department shall review the report and certify to the local jurisdictions that have enacted the franchise tax by October 1 of each year the amount of deposits within the jurisdiction and amount of the tax due. The local taxing authority shall issue bills to the financial institution by December 1 and require payment, with a two percent (2%) discount by December 31, or without discount by January 31 of the next year.

(4) The local jurisdiction shall notify the department of the tax rate imposed upon the enactment of the tax. The local jurisdiction shall also notify the department of any subsequent rate changes.

(5) The tax allowed by this section shall be in lieu of all city, county, and local taxes, except the real estate transfer tax levied in KRS Chapter 142, real property and tangible personal property taxes levied in KRS Chapter 132, and taxes upon users of utility services.

Effective: June 27, 2019

History: Amended 2019 Ky. Acts ch. 196, sec. 11, effective June 27, 2019. -- Amended 2005 Ky. Acts ch. 85, sec. 337, effective June 20, 2005. -- Created 1996 Ky. Acts ch. 254, sec. 17, effective July 15, 1996.

Multichannel Video Programming and Communications Services Tax Multichannel Video Programming and Communications Services Tax

136.600 Purpose of KRS 136.600 to 136.660 and 132.825.

The General Assembly hereby finds that the enactment of the tax and distribution system created by KRS 132.825 and 136.600 to 136.660:

(1) Addresses an important state interest in providing a fair, efficient, and uniform method for taxing communications services sold in this Commonwealth;

(2) Overcomes limitations placed upon the taxation of communications service by federal legislation that has resulted in inequities and unfairness among providers and consumers of similar services in the Commonwealth;

(3) Simplifies an existing system that includes a myriad of levies, fees, and rates imposed at all levels of government, making it easier for communications providers to understand and comply with the provisions of the law;

(4) Provides enough flexibility to address future changes brought about by industry deregulation, convergence of service offerings, and continued technological advances in communications; and

(5) Enhances administrative efficiency for communications service providers, the state, and local governments by drastically reducing the number of returns that must be filed and processed on an annual basis.

Effective: January 1, 2006

History: Created 2005 Ky. Acts ch. 168, sec. 88, effective January 1, 2006.

136.602 Definitions for KRS 136.600 to 136.660.

As used in KRS 136.600 to 136.660:

(1) "Cable service" means the provision of video, audio, or other programming service to purchasers, and the purchaser interaction, if any, required for the selection or use of the video or other programming service, regardless of whether the programming is transmitted over facilities owned or operated by the provider or by one (1) or more other communications service providers. Included in this definition are basic, extended, and premium service, pay-per-view service, digital or other music services, and other similar services;

(2) "Communications service" means the provision, transmission, conveyance, or routing, for consideration, of voice, data, video, or any other information signals of the purchaser's choosing to a point or between or among points specified by the purchaser, by or through any electronic, radio, light, fiber-optic, or similar medium or method now in existence or later devised.

(a) "Communications service" includes but is not limited to:

Local and long-distance telephone services;
Telegraph and teletypewriter services;
Prepaid calling services, and postpaid calling services;
Private communications services involving a direct channel specifically dedicated to a customer's use between specific points;
Channel services involving a path of communications between two (2) or more points;
Data transport services involving the movement of encoded information between points by means of any electronic, radio, or other medium or method;
Caller ID services, ring tones, voice mail and other electronic messaging services;
Mobile telecommunications service as defined in 4 U.S.C. sec. 124(7); and
Voice over Internet Protocol (VOIP);

(b) "Communications services" does not include information services or multichannel video programming service;

(3) "Department" means the Department of Revenue;

(4) "End user" means the person who utilized the multichannel video programming service. In the case of an entity, "end user" means the individual who used the service on behalf of the entity;

(5) "Engaged in business" means:

(a) Having any employee, representative, agent, salesman, canvasser, or solicitor operating in this state, under the authority of the provider, its subsidiary, or related entity, for the purpose of selling, delivering, taking orders, or performing any activities that help establish or maintain a marketplace for the provider;

(b) Maintaining, occupying, or using permanently or temporarily, directly or indirectly, or through a subsidiary or any other related entity, agent or representative, by whatever name called, an office, place of distribution, sales or sample room or place, warehouse or storage place, or other place of business;

(d) Providing communications service by or through a customer's facilities located in this state;

(e) Soliciting orders from residents of this state on a continuous, regular, or systematic basis in which the solicitation of the order, placement of the order by the customer or payment of the order utilizes the services of any financial institution, communications system, radio or television station, cable service, direct broadcast satellite or wireless cable service, print media, or other facility or service located in this state; or

(f) Soliciting orders from residents of this state on a continuous regular, systematic basis if the provider benefits from an agent or representative operating in this state under the authority of the provider to repair or service tangible personal property sold by the retailer;

(6) "Gross revenues" means all amounts received in money, credits, property, or other money's worth in any form, by a provider for furnishing multichannel video programming service or communications service in this state excluding amounts received from:

(a) Charges for Internet access as defined in 47 U.S.C. sec. 151; and

(b) Any excise tax, sales tax, or similar tax, fee, or assessment levied by the United States or any state or local political subdivision upon the purchase, sale, use, or other consumption of communications services or multichannel video programming services that is permitted or required to be added to the sales price of the communications service or multichannel video programming service. This exclusion does not include any amount that the provider has retained as a reimbursement for collecting and remitting the tax to the appropriate taxing jurisdiction in a timely manner;

(7) "In this state" means within the exterior limits of the Commonwealth of Kentucky and includes all territory within these limits owned by or ceded to the United States of America;

(8) "Multichannel video programming service" means live, scheduled, or on-demand programming provided by or generally considered comparable to or in competition with programming provided by a television broadcast station and shall include but not be limited to:

(a) Cable service;

(b) Satellite broadcast and wireless cable service;

(d) Video streaming services;

(9) "Person" means and includes any individual, firm, corporation, joint venture, association, social club, fraternal organization, general partnership, limited partnership, limited liability partnership, limited liability company, nonprofit entity, estate, trust, business trust, receiver, trustee, syndicate, cooperative, assignee, governmental unit or agency, or any other group or combination acting as a unit;

(10) "Place of primary use" means the street address where the end user's use of the multichannel video programming service primarily occurs;

(11) "Political subdivision" means a city, county, urban-county government, consolidated local government, or charter county government;

(12) "Provider" means any person receiving gross revenues for the provision of multichannel video programming service or communications service in this state;

(13) "Purchaser" means the person paying for multichannel video programming service;

(14) "Resale" means the purchase of a multichannel video programming service by a provider required to collect the tax levied by KRS 136.604 for sale, or incorporation into a multichannel video programming service for sale, including but not limited to:

(a) Charges paid by multichannel video programming service providers for transmission of video or other programming by another provider over facilities owned or operated by the other provider; and

(b) Charges for use of facilities for providing or receiving multichannel video programming services;

(15) "Retail purchase" means any purchase of a multichannel video programming service for any purpose other than resale;

(16) "Ring tones" means digitized sound files that are downloaded onto a device and that may be used to alert the customer with respect to a communication;

(17) "Sale" means the furnishing of a multichannel video programming service for consideration;

(18) (a) "Sales price" means the total amount billed by or on behalf of a provider for the sale of multichannel video programming services in this state valued in money, whether paid in money or otherwise, without any deduction on account of the following:

Any charge attributable to the connection, movement, change, or termination of a multichannel video programming service; or
Any charge for detail billing;

(b) "Sales price" does not include any of the following:

Charges for installation, reinstallation, or maintenance of wiring or equipment on a customer's premises;
Charges for the sale or rental of tangible personal property;
Charges for billing and collection services provided to another multichannel video programming service provider;
Bad check charges;
Late payment charges;
Any excise tax, sales tax, or similar tax, fee, or assessment levied by the United States or any state or local political subdivision, upon the purchase, sale, use, or consumption of any multichannel video programming service, that is permitted or required to be added to the sales price of the multichannel video programming service; or
Internet access as defined in 47 U.S.C. sec. 151;

(19) "Satellite broadcast and wireless cable service" means point-to-point or point-to- multipoint distribution services that include but are not limited to direct broadcast satellite service and multichannel multipoint distribution services, with programming or voice transmitted or broadcast by satellite, microwave, or any other equipment directly to the purchaser. Included in this definition are basic, extended, and premium service, pay-per-view service, digital or other music services, two (2) way service, and other similar services;

(20) "School district" means a school district as defined in KRS 160.010 and 160.020;

(21) "Special district" means a special district as defined in KRS 65.005(2)(a) that currently levies on any provider or its customers the public service corporation property tax under KRS 136.120; and

(22) "Video streaming services" means programming that streams live events, movies, syndicated and television programming, or other audio-visual content over the Internet for viewing on a television or other electronic device with or without regard to a particular viewing schedule.

Effective: June 27, 2019

History: Amended 2019 Ky. Acts ch. 151, sec. 17, effective June 27, 2019. -- Amended 2013 Ky. Acts ch. 40, sec. 83, effective March 21, 2013. -- Amended 2009 Ky. Acts ch. 99, sec. 1, effective July 1, 2009. -- Amended 2007 Ky. Acts ch. 141, sec. 13, effective July 1, 2007. -- Amended 2006 Ky. Acts ch. 6, sec. 3, effective March 6, 2006. -- Created 2005 Ky. Acts ch. 168, sec. 89, effective January 1, 2006.

Legislative Research Commission Note (6/27/2019). Section 82 of 2019 Ky. Acts ch. 151 states that the amendments to this statute made in Section 17 of that Act apply to transactions occurring on or after July 1, 2019.

Legislative Research Commission Note (3/6/2006). 2006 Ky. Acts ch. 6, sec. 26, provides that this section applies retroactively to January 1, 2006.

Legislative Research Commission Note (1/1/2006). 2005 Ky. Acts chs. 11, 85, 95, 97, 98, 99, 123, and 181 instruct the Reviser of Statutes to correct statutory references to agencies and officers whose names have been changed in 2005 legislation confirming the reorganization of the executive branch. Such a correction has been made in this section.

136.604 Excise tax -- Multichannel video programming services -- Rate-sourcing rule.

(1) An excise tax is hereby imposed on the retail purchase of multichannel video programming service provided to a person whose place of primary use is in this state, regardless of where or to whom those services are billed or paid.

(2) The multichannel video programming excise tax rate shall be three percent (3%) of the sales price charged for multichannel video programming service that is billed on or after January 1, 2006.

(3) Providers shall source multichannel video programming services to the end user's place of primary use.

Effective: January 1, 2006

History: Created 2005 Ky. Acts ch. 168, sec. 90, effective January 1, 2006

136.605 Sourcing of communications services -- Definitions.

(1) For purposes of KRS 136.600 to 136.660 the retailer shall source communications services as follows:

(a) A sale of mobile telecommunications services, other than air-to-ground radiotelephone service and prepaid wireless calling service, shall be sourced to the customer's or other purchaser's place of primary use;

(b) A sale of postpaid calling service shall be sourced to the origination point of the telecommunications signal as first identified by either the retailer's telecommunications system or information received by the retailer from its service provider, where the system used to transport the signal is not that of the retailer;

Over the counter. The sale is sourced to the business location of the seller;
Delivery to a specified address. The sale is sourced to the specified address when a purchaser or purchaser's donee receives the service at a location specified by the purchaser; or
Delivery address unknown. When the retailer does not know the address where the service is received, the sale is sourced to the first address listed in this paragraph that is known to the retailer:

a. The address of the purchaser available from the business records of the retailer;

b. The billing address of the purchaser;

c. The address from which the service was provided; or

d. In the case of a sale of prepaid wireless calling service, the location associated with the mobile telephone number;

(d) A sale of a private communications service shall be sourced as follows:

Service for a separate charge related to a customer channel termination point shall be sourced to each level of jurisdiction in which the customer channel termination point is located.
Service where all customer termination points are located entirely within one (1) jurisdiction or levels of jurisdiction is sourced in the jurisdiction in which the customer channel termination points are located.
Service for segments of a channel between two (2) customer channel termination points located in different jurisdictions and which segments of channel are separately charged shall be sourced fifty percent (50%) in each level of jurisdiction in which the customer channel termination points are located.
Service for segments of a channel located in more than one (1) jurisdiction or levels of jurisdiction and which segments are not separately billed shall be sourced in each jurisdiction based on the percentage determined by dividing the number of customer channel termination points in the jurisdiction by the total number of customer channel termination points; and

(e) A sale of other communications services:

Sold on a call-by-call basis shall be sourced based on the taxing jurisdiction where the call either originates or terminates and in which the service address is also located; or
Sold on a basis other than a call-by-call basis shall be sourced to the customer's or other purchaser's place of primary use.

(2) For purposes of this section:

(a) "Air-to-ground radiotelephone service" has the same meaning as in KRS 139.195;

(b) "Call-by-call basis" means any method of charging for communications services where the price is measured by individual calls;

(d) "Customer" has the same meaning as in KRS 139.195;

(e) "Customer channel termination point" has the same meaning as in KRS 139.195;

(f) "Home service provider" has the same meaning as in KRS 139.195;

(g) "Postpaid calling service" means a communications service obtained by making a payment on a call-by-call basis either through the use of a credit card or payment mechanism such as a bank card, travel card, credit card, or debit card, or by charge made to a telephone number not associated with the origination or termination of the communications service. A postpaid calling service includes a communications service, except a prepaid wireless calling service, that would be a prepaid service except that it is not exclusively a communications service;

(h) "Prepaid calling service" means the right to access exclusively communications services, which are paid for in advance and which enable the origination of calls using an access number or authorization code, whether manually or electronically dialed, and that is sold in predetermined units or dollars of which the number declines with use in a known amount;

(i) "Prepaid wireless calling service" means a communications service that:

Provides the right to utilize mobile wireless service as well as other nontelecommunications services, including the download of digital products delivered electronically, content, and ancillary services;
Must be paid for in advance; and
Is sold in predetermined units of dollars of which the number declines with use in a known amount;

(j) "Private communications service" means a communications service that entitles the customer or other purchaser to exclusive or priority use of a communications channel or group of channels between or among termination points, regardless of the manner in which the channel or channels are connected, and includes switching capacity, extension lines, stations, and any other associated services that are provided in connection with the use of a channel or channels; and

(k) "Service address" has the same meaning as in KRS 139.195.

Effective: July 1, 2007

History: Created 2007 Ky. Acts ch. 141, sec. 15, effective July 1, 2007.

136.606 Provider's power to collect from consumer -- Separate display of tax --- Taxes collected constitute debt to Commonwealth.

(1) The tax imposed by KRS 136.604 shall be collected by every provider engaged in business in this state from the purchaser. To the extent that the provisions of KRS Chapter 279 are inconsistent with KRS 136.600 to 136.660, KRS 136.600 to 136.660 shall control. The provider shall give the purchaser a receipt for the tax collected. The provider shall separately state the tax billed from all other charges on the receipt.

(2) Every purchaser is liable for the tax imposed by KRS 136.604. The liability is not extinguished until the tax has been paid to this state, except that a receipt from a provider registered under KRS 136.618 reflecting that the provider has billed the tax, with evidence that the purchaser has paid the tax, is sufficient to relieve the purchaser from further liability for the tax to which the receipt refers.

(3) The tax or any part thereof required by this section to be collected by the multichannel video programming service provider from the purchaser shall:

(a) Be deemed to be held in trust by the provider for and on account of the Commonwealth of Kentucky; and

(b) Constitute a debt owed by the provider to this state.

Effective: January 1, 2006

History: Created 2005 Ky. Acts ch. 168, sec. 91, effective January 1, 2006.

136.608 Exclusions from excise tax.

There are excluded from the tax imposed by KRS 136.604:

(1) Multichannel video programming services the purchase of which is prohibited from taxation under the Constitution or laws of the United States;

(2) Multichannel video programming services purchased by any cabinet, department, bureau, commission, board, or other statutory or constitutional agency of the state, and multichannel video programming services purchased by counties, cities, schools, or special districts as defined in KRS 65.005. This exclusion shall apply only to purchases for use solely in the governmental function. A purchaser not qualifying as a governmental agency or unit shall not be entitled to the exemption even though the purchaser may be the recipient of public funds or grants; and

(3) Multichannel video programming services purchased by resident, nonprofit educational, charitable, and religious institutions which have qualified for exemption from income taxation under Section 501(c)(3) of the Internal Revenue Code, provided that the service is to be used solely within the educational, charitable, or religious function of the institution.

Effective: January 1, 2006

History: Created 2005 Ky. Acts ch. 168, sec. 92, effective January 1, 2006.

136.610 Credit for tax paid in other state.

To prevent actual multistate taxation of a multichannel video programming service subject to taxation under KRS 136.604, any provider or purchaser, upon proof that the provider or purchaser has paid a tax in another state on the same multichannel video programming service, shall be allowed a credit against the tax imposed by KRS 136.604 to the extent of the amount of the tax legally paid in the other state.

Effective: January 1, 2006

History: Created 2005 Ky. Acts ch. 168, sec. 93, effective January 1, 2006.

136.612 Exception in the case of worthless accounts.

A provider is authorized to take as a deduction from the tax due under KRS 136.604 the amount of multichannel video programming excise tax paid in a prior reporting period on any debt or account receivable arising from the sale of multichannel video programming service that has become worthless and charged off for income tax purposes. If any charged-off multichannel video programming excise tax is thereafter in whole or in part collected by the provider, the amount so collected shall be included in the first return filed after collection.

Effective: January 1, 2006

History: Created 2005 Ky. Acts ch. 168, sec. 94, effective January 1, 2006.

136.614 Compensation to collect and timely remit excise tax.

To reimburse the provider for the cost of collecting and remitting the tax imposed under KRS 136.604, the provider may deduct on each return one and three-fourths percent (1.75%) of the first one thousand dollars ($1,000) of tax due and one percent (1%) of the tax due in excess of one thousand dollars ($1,000), provided that the total reimbursement claimed per taxpayer in any month shall not exceed one thousand five hundred dollars ($1,500), if the amount due is not delinquent at the time of payment. This section does not apply to purchasers who report the tax directly to the department under KRS 136.606(2).

Effective: January 1, 2006

History: Created 2005 Ky. Acts ch. 168, sec. 95, effective January 1, 2006.

136.616 Imposition of tax on gross revenues -- Multichannel video programming services and communications services -- Rates -- Collection of tax from purchaser prohibited -- Exclusion for municipal utility.

(1) A tax is hereby imposed on the gross revenues received by all providers.

(2) The tax rate shall be:

(a) Two and four-tenths percent (2.4%) of the gross revenues received for the provision of multichannel video programming service provided to a person whose place of primary use is in this state, billed on or after January 1, 2006; and

(b) One and three-tenths percent (1.3%) of the gross revenues received for the provision of communications services, as sourced under the provisions of KRS 136.605, billed on or after January 1, 2006.

(3) The provider shall not collect the tax directly from the purchaser or separately state the tax on the bill to the purchaser.

(4) (a) The tax imposed by this section shall apply to all providers except a municipal utility. "Municipal utility" as used in this section means a utility owned, operated, and controlled directly or indirectly by a city.

(b) To the extent that the provisions of KRS Chapter 279 are inconsistent with KRS 136.600 to 136.660, KRS 136.600 to 136.660 shall control.

Effective: January 1, 2015

History: Amended 2014 Ky. Acts ch. 92, sec. 219, effective January 1, 2015. -- Amended 2007 Ky. Acts ch. 141, sec. 14, effective July 1, 2007. -- Amended 2006 Ky. Acts ch. 6, sec. 4, effective March 6, 2006. -- Created 2005 Ky. Acts ch. 168, sec. 96, effective January 1, 2006.

Legislative Research Commission Note (3/6/2006). 2006 Ky. Acts ch. 6, sec. 26, provides that this section applies retroactively to January 1, 2006.

136.617 Credit for tax on multichannel video programming or communications service paid in another state.

To prevent actual multistate taxation of gross revenues for the provision of multichannel video programming service or communications service subject to tax under KRS 136.616, any provider, upon proof that the provider has paid a tax in another state for provision of the same multichannel video programming service or communications service to the same customer, shall be allowed a credit against the tax imposed by KRS 136.616 to the extent of the amount of the tax legally paid in the other state.

Effective: March 6, 2006

History: Created 2006 Ky. Acts ch. 6, sec. 2, effective March 6, 2006.

Legislative Research Commission Note (3/6/2006). 2006 Ky. Acts ch. 6, sec. 26, provides that this section applies retroactively to January 1, 2006.

136.618 Application for certificate of registration.

Every provider shall file an application for a certificate of registration with the department. The application shall be in the form prescribed by the department. The application shall be signed by the owner if a natural person; in the case of an association or partnership, by a member or partner; and in the case of a corporation, by an executive officer or some person specifically authorized by the corporation to sign the application.

Effective: January 1, 2006

History: Created 2005 Ky. Acts ch. 168, sec. 97, effective January 1, 2006.

136.620 Taxes due monthly -- Required monthly return -- Contents of return.

(1) The taxes imposed by KRS 136.604 and 136.616 are due and payable monthly and shall be remitted on or before the twentieth day of the next succeeding calendar month.

(2) On or before the twentieth day of each month, every provider shall file a return for the preceding month with the department in the form prescribed by the department, together with payment of any tax due. The department may allow a provider subject to the taxes imposed under KRS 136.604 and 136.616 to file a single return reporting tax liabilities under both taxes for each reporting period.

(3) The return shall show the:

(a) Gross revenues received subject to the tax imposed under KRS 136.616;

(b) Amount billed by the provider for multichannel video programming service subject to the tax imposed under KRS 136.604;

(d) Any other information as the department deems necessary for the proper administration of KRS 136.600 to 136.660.

(4) In the case where the purchaser is liable for the payment of the tax under KRS 136.606(2), the purchaser shall file the return showing the total amount paid for multichannel video programming service that is subject to tax during the reporting period.

(5) The return shall be signed by the person required to file the return or a duly authorized agent.

(6) The person required to file the return shall deliver the return, together with a remittance of the amount of tax due, to the department.

(7) For purposes of calculating the excise tax imposed under KRS 136.604, if tangible personal property normally subject to sales and use tax under KRS Chapter 139 is sold with multichannel video programming service as a single package for one (1) price, and the tangible personal property is necessary for the provision of the multichannel video programming service, the tax required to be collected by the provider shall be the tax imposed by KRS 136.604.

(8) For purposes of calculating the excise tax imposed under KRS 136.604, if communications services subject to sales and use tax under KRS Chapter 139 is sold with multichannel video programming service as a single package for one (1) price, the portion of the sales price attributable to the communications services shall be subject to the excise tax unless the provider can identify, by reasonable and verifiable standards, the communications services from its books and records that are kept in the regular course of business for other purposes, including but not limited to nontax purposes.

(9) For purposes of calculating the gross revenues tax imposed under KRS 136.616, if communications service is sold with multichannel video programming service as a single package for one (1) price, the gross revenues shall be taxed at the rate of two and four-tenths percent (2.4%).

(10) For purposes of calculating the gross revenues tax imposed under KRS 136.616, if tangible personal property is sold with:

(a) Multichannel video programming service for one (1) price, the gross revenues shall be taxed at the rate of two and four-tenths percent (2.4%); and

(b) Communications service for one (1) price, the gross revenues shall be taxed at the rate of one and three-tenths percent (1.3%).

Effective: July 15, 2010

History: Amended 2010 Ky. Acts ch. 147, sec. 5, effective July 15, 2010. -- Amended 2007 Ky. Acts ch. 141, sec. 16, effective July 1, 2007. -- Created 2005 Ky. Acts ch. 168, sec. 98, effective January 1, 2006.

136.622 Extension of time for filing return.

(1) The department shall, upon written request received on or prior to the due date of the return or tax, for good cause satisfactory to the department, extend the time for filing the return or paying the taxes imposed by KRS 136.604 and 136.616 for a period not to exceed thirty (30) days.

(2) Any person for which the extension is granted shall pay, in addition to the tax, interest at the tax interest rate as defined in KRS 131.010(6) from the date on which the tax would otherwise have been due.

Effective: January 1, 2006

History: Created 2005 Ky. Acts ch. 168, sec. 99, effective January 1, 2006.

136.624 Time for assessing taxes shown owing.

(1) As soon as practicable after each return is received, the department shall examine it. If the amount of tax computed by the department is greater than the amount returned by the taxpayer, the excess shall be assessed by the department within four (4) years from the later of the date the return was filed or due, except that in the case of a failure to file a return or a fraudulent return, the excess may be assessed at any time. A notice of assessment shall be mailed to the provider. The provider and the department may agree to extend this time period.

(2) Any provider aggrieved by any action of the department may request a review and shall have the rights of appeal as set forth in KRS Chapter 131.

Effective: January 1, 2006

History: Created 2005 Ky. Acts ch. 168, sec. 100, effective January 1, 2006.

136.626 Offset of overpayments against tax owing.

In making a determination of tax liability under KRS 136.604 or 136.616, the department may offset overpayments for a period or periods, together with interest on the overpayments, against underpayments for another period or periods, against penalties, and against the interest on the underpayments.

Effective: January 1, 2006

History: Created 2005 Ky. Acts ch. 168, sec. 101, effective January 1, 2006.

136.628 Record retention.

Every provider shall keep records, receipts, invoices, and other pertinent papers in a form required by the department for not less than four (4) years from the making of the records unless the department in writing authorizes their destruction at an earlier date.

Effective: January 1, 2006

History: Created 2005 Ky. Acts ch. 168, sec. 102, effective January 1, 2006.

136.630 Interest on overdue tax.

In every case, any tax not paid on or before the due date shall bear interest at the tax interest rate as defined in KRS 131.010(6) from the date due until the date of payment.

Effective: January 1, 2006

History: Created 2005 Ky. Acts ch. 168, sec. 103, effective January 1, 2006.

136.632 Refund or credit of taxes paid -- Claims.

(1) The taxes paid under KRS 136.604 or 136.616 shall be refunded or credited in the manner provided in KRS 134.580.

(2) A claim for refund or credit shall be made on a form prescribed by the department and shall contain all information required by the department.

(3) No provider shall be entitled to a refund or credit of the taxes paid under KRS 136.604 where the taxes have been collected from a customer, unless the amount of taxes collected from the customer are refunded to the customer by the provider who paid the taxes to the State Treasury.

Effective: January 1, 2006

History: Created 2005 Ky. Acts ch. 168, sec. 104, effective January 1, 2006.

136.634 Administration by the department.

The department shall administer the provisions of KRS 136.600 to 136.660 and shall have all of the powers, rights, duties, and authority with respect to the assessment, collection, refunding, and administration of the taxes levied by this chapter, conferred generally upon the department by the Kentucky Revised Statutes, including KRS Chapters 131, 134, and 135.

Effective: January 1, 2006

History: Created 2005 Ky. Acts ch. 168, sec. 105, effective January 1, 2006.

Legislative Research Commission Note (1/1//2006). 2005 Ky. Acts chs. 11, 85, 95, 97, 98, 99, 123, and 181 instruct the Reviser of Statutes to correct statutory references to agencies and officers whose names have been changed in 2005 legislation confirming the reorganization of the executive branch. Such a correction has been made in this section.

136.636 Security for compliance.

(1) Whenever it is deemed necessary to ensure compliance with KRS 136.600 to 136.660, the department may require any person required to collect the taxes imposed by KRS 136.604 or 136.616 to place security with the department. The amount of the security shall be fixed by the department, but shall not be greater than three (3) times the estimated average monthly liability of the provider. This limitation shall apply regardless of the type of security placed with the department.

(2) The amount of the security may be increased or decreased by the department subject to the limitations provided in subsection (1) of this section.

(3) If necessary, the department may sell the security at public auction to recover any tax, interest, or penalty due. However, security in the form of a bearer bond issued by the United States or any state or local governmental unit that has a prevailing market price may be sold by the department at a private sale at a price not lower than the prevailing market price.

(4) The department shall provide notice of the date, time, and place of the sale to the person who placed the security with the department. Notice shall be sent by certified mail to the person's last known address, as reflected in the records of the department, or delivered to the person.

(5) As used in this section, "delivery" or "delivered to" means mailing the notice to the person to whom it is addressed, leaving it at his or her place of business with the person in charge of the place of business, or, if there is no one in charge, leaving it in a conspicuous place at the place of business. If the place of business is closed or the person to be served has no place of business, delivery includes:

(a) Leaving it at the person's home with some person of suitable age and discretion residing in the home;

(b) Serving it upon the person's agent for service process; or

(6) Notice by certified mail shall be postmarked no later than ten (10) days prior to the sale.

(7) Any surplus above the amounts due to the department after the sale shall be returned to the person who placed the security.

Effective: January 1, 2006

History: Created 2005 Ky. Acts ch. 168, sec. 106, effective January 1, 2006.

Legislative Research Commission Note (1/01/2006). 2005 Ky. Acts chs. 11, 85, 95, 97, 98, 99, 123, and 181 instruct the Reviser of Statutes to correct statutory references to agencies and officers whose names have been changed in 2005 legislation confirming the reorganization of the executive branch. Such a correction has been made in this section.

136.638 Officer and member liability for taxes due.

(1) Notwithstanding any other provision of law to the contrary, the president, vice president, secretary, treasurer, or any other person holding any equivalent corporate office of any corporation subject to the provisions of KRS 136.600 to 136.660 shall be personally and individually liable, both jointly and severally, for the taxes imposed under KRS 136.604 or 136.616. Neither the corporate dissolution or withdrawal of the corporation from the state nor the cessation of holding any corporate office shall discharge the foregoing liability of any person. The personal and individual liability shall apply to each and every person holding the corporate office at the time the taxes become or became due. No person shall be personally and individually liable under this subsection if that person did not have authority to collect, account for, or pay over the tax at the time that the tax imposed by KRS 136.604 or 136.616 become or became due.

(2) Notwithstanding KRS 275.150, 362.1-306(3) or predecessor law, KRS 362.2- 404(3), or any other provision of law to the contrary, the managers of a limited liability company, the partners of a limited liability partnership, and the partners of a limited liability limited partnership or any other person holding any equivalent office of a limited liability company, limited liability partnership, or limited liability limited partnership subject to KRS 136.600 to 136.660 shall be personally and individually liable, both jointly and severally, for the taxes imposed under KRS 135.604 and 136.616. Neither the dissolution or withdrawal of the limited liability company, limited liability partnership, or limited liability limited partnership from the state nor the cessation of holding any office shall discharge the foregoing liability of any person. The personal and individual liability shall apply to each and every manager of a limited liability company, partner of a limited liability partnership, and general partner of a limited liability limited partnership at the time the taxes become or became due. No person shall be personally and individually liable under this subsection, if that person had no authority to collect, account for, or pay over the tax at the time that the taxes imposed by KRS 136.604 become or became due or account for or pay over the tax at the time that the taxes imposed by KRS 136.616 become or became due.

(3) "Taxes," as used in this section, shall include interest accrued at the rate provided by KRS 131.183 and all applicable penalties and fees imposed under this chapter and under KRS 131.180, 131.410 to 131.445, and 131.990.

Effective: July 12, 2006

History: Amended 2006 Ky. Acts ch. 149, sec. 198, effective July 12, 2006. -- Created 2005 Ky. Acts ch. 168, sec. 107, effective January 1, 2006.

136.640 Return of tax savings to customers.

To the extent that a provider experiences a tax savings as a result of the provisions of KRS 136.600 to 136.660 in the first year of tax collections under KRS 136.600 to 136.660, the savings shall be returned proportionately to all residential and business customers of the provider. The specific manner in which the savings are returned to its customers shall be at the discretion of the provider. The Office of the Attorney General is authorized to enforce the requirements of this section.

Effective: January 1, 2006

History: Created 2005 Ky. Acts ch. 168, sec. 108, effective January 1, 2006.

136.642 Legal action not to delay collections.

No suit shall be maintained in any court to restrain or delay the collection or payment of the tax levied by KRS 136.604 or 136.616.

Effective: January 1, 2006

History: Created 2005 Ky. Acts ch. 168, sec. 109, effective January 1, 2006.

136.644 Limitations of legal actions.

Any provider subject to the tax imposed by KRS 136.604 or 136.616 that fails to file a return as required by KRS 136.620 or fails to pay the tax as listed on the return shall not maintain an action, suit, or proceeding in any court or before any agency in this state or enforce in any way any obligation of any debt until the return is filed and the tax listed on the return is paid. This provision does not prohibit a provider from the rights afforded by KRS Chapter 131.

Effective: January 1, 2006

History: Created 2005 Ky. Acts ch. 168, sec. 110, effective January 1, 2006.

136.646 Penalties.

Penalties shall be imposed and assessed in accordance with the provisions of KRS 131.180.

Effective: January 1, 2006

History: Created 2005 Ky. Acts ch. 168, sec. 111, effective January 1, 2006.

136.648 Gross revenues and excise tax fund and state baseline and local growth fund -- Creation and administration of funds.

(1) There is established in the State Treasury a gross revenues and excise tax fund. The fund shall be held and administered by the Finance and Administration Cabinet. The cabinet shall invest money in the fund in the same manner as money in the state general fund.

(2) There is established in the State Treasury a state baseline and local growth fund. The fund shall be held and administered by the Finance and Administration Cabinet. The cabinet shall invest money in the fund in the same manner as money in the state general fund.

(3) All revenue from the tax imposed under KRS 136.604 and 136.616, including all penalties and interest attributable to the nonpayment of the tax or for noncompliance with KRS 132.825 and 136.600 to 136.660 shall be deposited into gross revenues and excise tax fund. Amounts deposited in the gross revenues and excise tax fund shall be allocated among the state, political subdivisions, school districts and special districts as provided in KRS 136.648, 136.650, 136.652, 136.654, and 136.656.

(4) All money in the gross revenues and excise tax fund designated for distribution to political subdivisions under KRS 136.648, 136.650, 136.652, 136.654, and 136.656:

(a) Shall not be withheld or reduced by the General Assembly or any state agency for any reason, except for adjustments provided for within KRS 132.825 and 136.600 to 136.660; and

(b) Shall be used solely and exclusively for the provision of services to the general public, including public protection, health services, education, libraries, transportation services, and economic development. No amount shall be used for purely local purposes affecting only the inhabitants of the particular political subdivision, such as the administration of local government. Neither the General Assembly nor any state agency shall mandate how the funds are to be used.

Effective: January 1, 2006

History: Created 2005 Ky. Acts ch. 168, sec. 112, effective January 1, 2006.

136.650 Required participation in funds -- Computation of amounts -- Designated monthly hold harmless amount.

(1) (a) Every political subdivision, school district, and special district shall participate in the gross revenues and excise tax fund and the state baseline and local growth fund.

(b) On or before December 1, 2005, each political subdivision shall certify to the department on a prescribed form the amount of collections it received from the local franchise fees collected from communications service and multichannel video programming service providers and other fees collected to fund public educational and government access programming during the period between July 1, 2004, and June 30, 2005. By certifying its participation under this subsection, each political subdivision:

Consents to the hearing process provided in KRS 136.658; and
Agrees to relinquish its right to enforce the portion of any contract or agreement that requires the payment of a franchise fee or tax on communications services and multichannel video programming services, regardless of whether the tax or fee is imposed on the provider or its customers.

(c) The amount of collections received by each political subdivision, school district, special district, and sheriff's department between July 1, 2004, and June 30, 2005, from the tax imposed by KRS 136.120 attributable to the franchise portion of the operating property, as noted in KRS 136.115, shall be calculated by the department from assessment data for calendar year 2004.

(2) The monthly portion of the gross revenues and excise tax fund that shall be distributed to political subdivisions, school districts and special districts under KRS 136.652 shall be computed as follows:

(a) Each political subdivision, school district and special district shall be assigned a percentage based on the amount of its collections certified under subsection

(1) of this section as a ratio of the total certified amount of collections of all parties participating in the fund. This percentage shall be known as the "local historical percentage." The portion of the sheriff departments' certified collections identified in subsection (1) of this section from the tax imposed under KRS 136.120 attributable to the franchise portion of the operating property, as noted in KRS 136.115, that was imposed by county governments shall be added to each county's reported collections to determine its local historical percentage;

(b) The sheriff departments' collections certified under subsection (1) of this section that are retained by the sheriff departments as their fee for collecting the taxes shall be the sheriff departments' fixed hold-harmless amount;

(c) Three million thirty-four thousand dollars ($3,034,000), which represents one- twelfth (1/12) of the total potential collections, shall be designated as the "monthly hold-harmless amount"; and

(d) Each political subdivision's, school district's, and special district's local historical percentage shall be multiplied by the monthly hold-harmless amount to determine its monthly distribution from the fund.

(3) If during the period between June 30, 2005, and December 31, 2005, any political subdivision had a substantial change in its base revenue by enacting or modifying the rate of a local franchise fee prior to June 30, 2005, the political subdivision may request the department to determine its certified collection amount.

(4) If any political subdivision, school district, special district, or sheriff's department believes that the data used to determine its certified amount of collections are inaccurate, the political subdivision, school district, special district, or sheriff's department may request a redetermination by the oversight committee established by KRS 136.658. A redetermination shall be effective prospectively beginning with the next distribution cycle occurring ninety (90) days after the matter is finally settled.

Effective: March 6, 2006

History: Amended 2006 Ky. Acts ch. 6, sec. 5, effective March 6, 2006. -- Created 2005 Ky. Acts ch. 168, sec. 113, effective January 1, 2006.

Legislative Research Commission Note (3/6/2006). 2006 Ky. Acts ch. 6, sec. 27, provides that this section applies retroactively to December 1, 2005.

Legislative Research Commission Note (1/1/2006). 2005 Ky. Acts chs. 11, 85, 95, 97, 98. 99, 123, and 181 instruct the Reviser of Statutes to correct statutory references to agencies and officers whose names have been changed in 2005 legislation confirming the reorganization of the executive branch. Such a correction has been made in this section.

136.652 Distribution -- Administrative costs -- Monthly hold harmless amounts.

Money in the gross revenues and excise tax fund shall be distributed monthly as follows:

(1) One percent (1%) shall be deposited in a trust and agency account created in the State Treasury to be used by the department for administration costs associated with the implementation, collection, and distribution of the tax imposed by KRS 136.604 and 136.616.

(2) After the distribution required under subsection (1) of this section, the department shall distribute to each political subdivision, school district and special district the applicable monthly hold-harmless amount as calculated under KRS 136.650. In addition, the department shall distribute one-twelfth (1/12) of the sheriff department's fixed hold-harmless amount as defined in KRS 136.650(2)(b). For tax collections received in January and February of 2006, the department shall make the distribution by April 25, 2006. For all other periods, the department shall make distribution by the twenty-fifth day of the next calendar month following the tax receipts.

(3) After the distribution required by subsection (2) of this section, the department shall deposit one million two hundred fifty thousand dollars ($1,250,000) in the state general fund. This amount shall be adjusted on a prospective basis after the collection of the first twelve (12) months of tax receipts from the taxes imposed by KRS 136.604 and 136.616 to equal the average monthly tax receipts attributable to the taxation of satellite broadcast and wireless cable services under KRS 136.604 and 136.616. The amount shall then become the fixed amount distributed to the general fund.

(4) Money remaining in the gross revenues and excise tax fund after the distribution required by subsection (3) of this section shall be transferred to the state baseline and local growth fund established in KRS 136.648.

Effective: January 1, 2006

History: Created 2005 Ky. Acts ch. 168, sec. 114, effective January 1, 2006. 2026-2028 Budget Reference. See State/Executive Branch Budget, 2026 Ky. Acts ch. 168, Pt. I, F, 7, (1) at 2084.

136.654 Determination of distributions -- State baseline and local growth fund.

(1) On or before December 1, 2005, and every January 31 thereafter, each participating political subdivision shall certify to the department its total tax receipts for the prior fiscal year. This amount shall be used to calculate the percentage of each political subdivision's portion of the account labeled under its county's name within the state baseline and local growth fund as described in subsection (3)(b) of this section. "Total tax receipts" shall not include revenue from nontax sources, such as intergovernmental revenues, charges for services, tuition, interfund transfers, interest and investment income, rental income, income from asset sales, beginning balances, or revenue from licenses and permits. "Total tax receipts" shall include the following:

(a) Real estate and tangible personal property taxes, including delinquent tax receipts;

(b) Franchise fees or taxes on utilities, other than multichannel video programming service and communications service utilities;

(c) Occupational and business license fees or taxes, including insurance premium taxes, net profits taxes, gross receipts taxes, payroll taxes, transient room taxes, restaurant taxes, and bank deposit taxes;

(d) Telephone emergency surcharge fees;

(e) Gross revenues tax hold-harmless and growth fund receipts; and

(f) Payments in lieu of taxes.

(2) On or before every January 31, each participating school district and special district shall certify to the department the amount of its prior year tax assessments under KRS Chapter 132 on companies' providing of multichannel video programming service and communications service. This amount shall be used to calculate the percentage of each school district's and special district's portion of the account labeled under its county's name within the state baseline and local growth fund as described in subsection (3)(b) of this section. For tax years with no assessments under KRS Chapter 132, the local historical percentage as defined in KRS 136.650 shall be used.

(3) Each political subdivision's, school district's, and special district's monthly portion of the state baseline and local growth fund shall be computed as follows:

(a) A "local growth portion" shall be determined as an amount of money that when added to the hold-harmless amount identified in KRS 136.650(2)(c) equals fifteen and six-tenths percent (15.6%) of the total amount deposited in the gross revenues and excise tax fund, minus the amount of distributions made under KRS 136.652(1) and (3).

(b) The local growth portion shall be accounted for by county within the state baseline and local growth fund based on the ratio of the gross revenues tax collected on multichannel video programming services and communications services provided in each county to the total statewide collections of the gross revenues tax. The county-by-county allotment of the local growth portion shall be known as the "county growth portion."

(c) The county growth portion shall be further segregated into the political subdivision allotment, the school district allotment, and the special district allotment based upon the ratio of each allotment category's total historical collections as calculated under KRS 136.650(2) to the total overall county historical collections as calculated from the certified collections under KRS 136.650(1).

(d) On or before April 25, 2006, each political subdivision's share of the political subdivision allotment shall be determined by multiplying the political subdivision allotment of the local growth portion as determined in paragraph

(b) of this subsection by the percentage calculated in subsection (1) of this section.

(e) On or before April 25, 2006, each school district's share of the school district allotment shall be determined by multiplying the school district allotment as determined in paragraph (c) of this subsection by the percentage calculated in subsection (2) of this section.

(f) On or before April 25, 2006, each special district's share of the special district allotment shall be determined by multiplying the special district allotment as determined in paragraph (c) of this subsection by the percentage calculated in subsection (2) of this section.

(g) The respective allotment share for each participating political subdivision, school district, and special district shall be adjusted every July 1 following the year 2006, to account for any change in its percentages based on annual certifications required in subsections (1) and (2) of this section.

(h) Notwithstanding the annual certifications required in subsection (1) of this section, following the year 2006, political subdivisions may choose to determine their respective shares of the political subdivision allotment pursuant to an interlocal agreement as authorized under KRS 65.240. Activation or termination of an interlocal agreement shall comply with the notification requirements of subsection (1) of this section and shall become effective the following July 1. The terms of a timely interlocal agreement governing the distribution of a political subdivision allotment shall remain in effect until its timely termination by one of the participating political subdivisions.

Effective: January 1, 2006

History: Created 2005 Ky. Acts ch. 168, sec. 115, effective January 1, 2006.

136.656 Distributions -- County growth portion -- State baseline portion.

All money deposited in the state baseline and local growth fund created under KRS 136.648 shall be distributed monthly, according to the same schedule for distribution from the gross revenues and excise tax fund, as follows:

(1) The county growth portion shall be distributed in accordance with the formulas established in KRS 136.654.

(2) After the distribution required under subsection (1) of this section, the remaining balance shall be deposited in the general fund. This amount shall be known as the "state baseline portion," which shall represent, if sufficient funds are available, eighty-four and four-tenths percent (84.4%) of the total amount deposited in the gross revenues and excise tax fund, minus the amount of distributions made under KRS 136.652(1) and (3).

Effective: January 1, 2006

History: Created 2005 Ky. Acts ch. 168, sec. 116, effective January 1, 2006.

136.658 Local Distribution Fund Oversight Committee -- Creation and duties.

(1) The Local Distribution Fund Oversight Committee is hereby created and administratively attached to and staffed by the department. The oversight committee shall consist of nine (9) members appointed by the Governor and shall be representative of local government and state government officials. The Governor shall receive recommendations for four (4) members each from the Kentucky Association of Counties and the Kentucky League of Cities from which the Governor shall select two (2) members each. The Governor shall receive recommendations for two (2) members each from the Kentucky School Board Association, the Kentucky Superintendents Association, and the Kentucky School Administrators Association from which the Governor shall select one (1) member

each. One (1) member shall be appointed by the Governor to represent the interests of special districts other than school districts. The remaining member shall be the commissioner of the Department for Local Government, who shall serve as chairperson of the oversight committee. The members shall serve for a term of three

(3) years. Five (5) members of the oversight committee shall constitute a quorum. A member may be removed for cause in accordance with procedures established by the oversight committee and shall serve without salary but shall be reimbursed for expenses in the same manner as state employees. Any vacancy occurring on the oversight committee shall be filled by the Governor for the unexpired term.

(2) The duties of the oversight committee shall be:

(a) To monitor the department's implementation and distribution of funds from the gross revenues and excise tax fund and the state baseline and local growth fund and to report its findings to the commissioner of the department; and

(b) To act as a finder of fact for the commissioner of the department in disputes in and between political subdivisions, school districts, special districts, and sheriff departments, and between political subdivisions, school districts, special districts, and sheriff departments, and the department regarding the implementation and distribution of funds from the gross revenues and excise tax fund and the state baseline and local growth fund.

(3) The department shall provide the oversight committee with an annual report reflecting the amounts distributed to each participating political subdivision, school district, special district, or sheriff department.

(4) Any political subdivision, school district, special district, or sheriff department may file a complaint and request a hearing with the oversight committee on a form prescribed by the committee. The oversight committee shall give notice to any political subdivision, school district, special district, or sheriff department that may be affected by the complaint. Any political subdivision, school district, special district, or sheriff department intending to respond to the complaint shall do so in writing within thirty (30) days of notice of the complaint.

(5) In conducting its business:

(a) The oversight committee shall give due notice of the times and places of its hearings;

(b) The parties shall be entitled to be heard, to present evidence, and to examine and cross-examine witnesses;

(d) The oversight committee shall adopt and publish rules of procedure and practice regarding its hearings; and

(e) The oversight committee shall make written findings and recommendations to the commissioner of the department.

(6) The commissioner of the department shall review the findings and recommendations of the oversight committee and issue a final ruling within sixty

(60) days of receipt of the recommendations.

(7) The parties in the dispute shall have the rights and duties to appeal any final ruling to the Board of Tax Appeals under KRS 49.220.

(8) Nothing contained in this section shall prevent at any time a written compromise of any matter or matters in dispute, if otherwise lawful, by the parties to the hearing process.

Effective: June 29, 2021

History: Amended 2021 Ky. Acts ch. 185, sec. 71, effective June 29, 2021. -- Amended 2017 Ky. Acts ch. 74, sec. 79, effective June 29, 2017. -- Amended 2010 Ky. Acts ch. 117, sec. 71, effective July 15, 2010. -- Amended 2007 Ky. Acts ch. 47, sec. 65, effective June 26, 2007. -- Created 2005 Ky. Acts ch. 168, sec. 117, effective January 1, 2006.

136.660 Prohibitions -- Local franchise fee or tax defined.

(1) Except as provided in subsection (3) of this section, to the extent legally permissible, every political subdivision of this state shall be prohibited from the following:

(a) Levying any franchise fee or tax on multichannel video programming service or communications service, or collecting any franchise fee or tax from providers or purchasers of multichannel video programming service or communications service;

(b) Requiring any provider to enter into or extend the term of any provision of a franchise or other agreement that requires the payment of a franchise fee or tax; or

(c) Enforcing any provision of any ordinance or agreement to the extent that the provision obligates a provider to pay to the political subdivision a franchise fee or tax.

(2) For purposes of this section, "franchise fee or tax" means:

(a) Any tax, charge, or fee, that is required by ordinance or agreement to be paid to a political subdivision by or through a provider, in its capacity as a provider, regardless of whether the tax, charge, or fee, is:

Designated as a franchise fee, sales tax, excise tax, user fee, occupancy fee, subscriber charge, license fee, or otherwise;
Measured by the amounts charged for services, the type or amount of equipment or facilities deployed, or otherwise;
Intended as compensation for the use of public or private rights-of-way, the right to conduct business, or otherwise; or
Permitted or required to be separately stated on the purchaser's bill; or

(b) Any in-kind payment of property or services that is required to be furnished by a provider by any ordinance that is enacted or agreement that is entered into after January 1, 2006.

(3) The prohibitions in this section shall not apply to:

(a) Ad valorem taxes levied under KRS 132.020;

(b) Emergency telephone surcharges;

(d) In-kind payments of property or services provided under contracts or agreements in existence prior to January 1, 2006;

(e) Letters of credit designed to protect against damages to public rights-of-way for violations of regulatory requirements;

(f) Permit or inspection fees of general applicability that are:

Related to construction in the rights-of-way; and
Levied solely to defray the actual costs of administering the permitting process or inspection program;

(g) Pole attachment fees;

(h) Fees for the placement of antennas, towers, and other similar devices on publicly owned property that are imposed by a political subdivision pursuant to a written agreement;

(i) Any charge or fee that is imposed on a provider by a political subdivision for the use of property or facilities owned by the political subdivision, if that provider is imposing similar charges or fees on other providers for the use of property or facilities owned or controlled by that provider;

(j) Any requirement by a political subdivision that a provider designate or set aside channel capacity for public, educational, or governmental use; or construct institutional networks; or provide similar services or facilities for public use and benefit that political subdivisions are specifically authorized to require by federal telecommunications laws; and

(k) Gross revenues utility taxes imposed under KRS 160.613 and 160.614.

(4) Notwithstanding any provision of law to the contrary, if a political subdivision imposes or otherwise attempts to require the payment of a franchise fee or tax, the political subdivision shall not receive any share of the proceeds of the tax levied by KRS 136.604 or 136.616 for the period that the imposition or attempt occurs.

(5) To the extent that a provider actually pays a franchise fee or tax with respect to multichannel video programming service or communications service that is also subject to the taxes imposed by KRS 136.604 or 136.616, the provider shall be entitled to a credit against the amount payable to the department under KRS 136.604 and 136.616 in the amount of the franchise fee or tax, up to the amount of the total tax due with respect to the multichannel video programming service and communications service provided in that political subdivision, school district, or special district.

(6) Nothing in this section shall prohibit a provider from donating property or services to a political subdivision, school district, or special district or prohibit a political subdivision, school district, or special district from receiving donated property or services.

(7) Nothing in this section shall prohibit a political subdivision from requiring communications service providers or cable service providers to obtain a franchise as required by Section 163 of the Constitution of Kentucky and from regulating to the fullest extent authorized by state and federal law the use of local rights-of-way by communications service providers or cable service providers.

Effective: January 1, 2006

History: Created 2005 Ky. Acts ch. 168, sec. 118, effective January 1, 2006.

Penalties Penalties

136.980 Penalty for delinquency in payment.

If any tax imposed by KRS 136.330 to 136.395, 299.530 and 304.4-030, whether assessed by the department, or the taxpayer, or any installment or portion of any tax is not paid on or before the date prescribed for its payment, there shall be collected interest upon the unpaid amount at the tax interest rate as defined in KRS 131.010(6) from the date prescribed for its payment until payment is actually made to the department.

Effective: June 20, 2005

History: Amended 2005 Ky. Acts ch. 85, sec. 338, effective June 20, 2005. -- Amended 1992 Ky. Acts ch. 403, sec. 4, effective July 14, 1992. -- Amended 1984 Ky. Acts ch. 113, sec. 2, effective July 13, 1984. -- Amended 1982 Ky. Acts ch. 452, sec. 11, effective July 1, 1982. -- Amended 1972 Ky. Acts ch. 203, sec. 15. -- Created 1966 Ky. Acts ch. 187, Part IV, sec. 14.

Legislative Research Commission Note. This section was amended by 1984 Acts Chapter 111, § 75, and 1984 Acts Chapter 113, § 2, which conflict and cannot be compiled together. Pursuant to KRS 7.136, the amendment in Chapter 113, § 2, the non-revisory Act, prevails.

136.985 Penalty for failing to file return.

Any person who violates any of the provisions of KRS 136.330 to 136.395, 299.530 and 304.4-030 shall be subject to the uniform civil penalties imposed pursuant to KRS 131.180.

Effective: July 14, 1992

History: Amended 1992 Ky. Acts ch. 403, sec. 5, effective July 14, 1992. -- Amended 1984 Ky. Acts ch. 113, sec. 3, effective July 13, 1984. -- Reenacted 1972 Ky. Acts ch. 203, sec. 16. -- Created 1966 Ky. Acts ch. 187, Part IV, sec. 15.

Legislative Research Commission Note. This section was amended by 1984 Acts Chapter 111, § 76, and 1984 Acts Chapter 113, § 3, which conflict and cannot be compiled together. Pursuant to KRS 7.136, the amendment in Chapter 113, § 3, the non-revisory Act, prevails.

136.990 Penalties.

(1) Any corporation that fails to pay its taxes, penalty, and interest as provided in subsection (2) of KRS 136.050, after becoming delinquent, shall be fined fifty dollars ($50) for each day the same remains unpaid, to be recovered by indictment or civil action, of which the Franklin Circuit Court shall have jurisdiction.

(2) Any public service corporation, or officer thereof, that willfully fails or refuses to make reports as required by KRS 136.130 and 136.140 shall be fined one thousand dollars ($1,000), and fifty dollars ($50) for each day the reports are not made after April 30 of each year.

(3) Any superintendent of schools or county clerk who fails to report as required by KRS 136.190, or who makes a false report, shall be fined not less than fifty dollars ($50) nor more than one hundred dollars ($100) for each offense.

(4) Any company or association that fails or refuses to return the statement or pay the taxes required by KRS 136.330 or 136.340 shall be fined one thousand dollars ($1,000) for each offense.

(5) Any insurance company that fails or refuses for thirty (30) days to return the statement required by KRS 136.330 or 136.340 and to pay the tax required by KRS 136.330 or 136.340, shall forfeit one hundred dollars ($100) for each offense. The commissioner of insurance shall revoke the authority of the company or its agents to do business in this state, and shall publish the revocation pursuant to KRS Chapter 424.

(6) Any person who violates subsection (3) of KRS 136.390 shall be fined not less than one hundred dollars ($100) nor more than five hundred dollars ($500) for each offense.

(7) Where no other penalty is mentioned for failing to do an act required, or for doing an act forbidden by this chapter, the penalty shall be not less than ten dollars ($10) nor more than five hundred dollars ($500).

(8) The Franklin Circuit Court shall have jurisdiction of all prosecutions under subsections (4) to (6) of this section.

(9) Any person who violates any of the provisions of KRS 136.073 shall be subject to the uniform civil penalties imposed pursuant to KRS 131.180.

(10) If the tax imposed by KRS 136.073, whether assessed by the department or the taxpayer, or any installment or portion of the tax, is not paid on or before the date prescribed for its payment, interest shall be collected upon the nonpaid amount at the tax interest rate as defined in KRS 131.010(6) from the date prescribed for its payment until payment is actually made to the department.

(11) Any provider who violates the provisions of KRS 136.616(3) shall be subject to a penalty of twenty-five dollars ($25) per purchaser offense, not to exceed ten thousand dollars ($10,000) per month.

Effective: June 27, 2019

History: Amended 2019 Ky. Acts ch. 151, sec. 18, effective June 27, 2019. -- Amended 2010 Ky. Acts ch. 24, sec. 102, effective July 15, 2010. -- Amended 2006 Ky. Acts ch. 6, sec. 6, effective March 6, 2006. -- Amended 2005 Ky. Acts ch. 85, sec. 339, effective June 20, 2005. -- Amended 1992 Ky. Acts ch. 338, sec. 20, effective July 14, 1992; and ch. 403, sec. 6, effective July 14, 1992. -- Amended 1990 Ky. Acts ch. 163, sec. 6, effective July 13, 1990; and repealed and reenacted ch. 476, Pt. V, sec. 359, effective July 13, 1990. -- Amended 1986 Ky. Acts ch. 496, sec. 10, effective August 1, 1986. -- Amended 1982 Ky. Acts ch. 452, sec. 12, effective July 1, 1982. -- Amended 1976 ch. 155, sec. 6. -- Amended 1966 Ky. Acts ch. 255, sec. 133. -- Amended 1962 Ky. Acts ch. 94, sec. 9; and ch. 210, sec. 23. -- Amended 1958 Ky. Acts ch. 126, sec. 12. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. secs. 4019a-15, 4029, 4087, 4091, 4099, 4103, 4230, 4231, 4232, 4236, 4237, 4281j-7.

Legislative Research Commission Note (6/27/2019). Section 82 of 2019 Ky. Acts ch. 151 states that the amendments to this statute made in Section 18 of that Act apply to transactions occurring on or after July 1, 2019.

Legislative Research Commission Note (4/27/2018). KRS 136.070 was repealed in 2018 Ky. Acts chs. 171 and 207, but a conforming amendment was not made to this statute to address the reference it contains to KRS 136.070. The Reviser of Statutes has determined that making such a conforming change during the 2018 codification exceeds the permissible correction of manifest clerical or typographical errors under KRS 7.136(1)(h). Therefore, the reference to KRS 136.070 remains unchanged and would have to be changed pursuant to future legislative action.

Legislative Research Commission Note (3/6/2006). 2006 Ky. Acts ch. 6, sec. 26, provides that this section applies retroactively to January 1, 2006.

Legislative Research Commission Note (7/13/90). The Act amending this section prevails over the repeal and reenactment in House Bill 940, Acts ch. 476, pursuant to Section 653(1) of Acts ch. 476.