103 KAR 16:120.

Apportionment and allocation; trucklines, buslines, airlines.

 

      RELATES TO: KRS

141.120

      STATUTORY

AUTHORITY: KRS Chapter 13A

      NECESSITY,

FUNCTION, AND CONFORMITY: This administrative regulation, under authority of

KRS 141.120(10)(b), specifies how the factors for apportioning the income of

interstate truckline, busline, and airline companies are to be determined.

 

      Section 1.

General. (1) Business income of multistate corporate truckline, busline, or

airline, shall be apportioned to Kentucky by multiplying the income by a

weighted fraction, the numerator of which is the weighted sales factor (fifty

(50) percent) plus the weighted property factor (twenty-five (25) percent) plus

the weighted payroll factor (twenty-five (25) percent), and the denominator of

which is four (4).

      (2) Nonbusiness

income shall be allocated to Kentucky by KRS 141.120(3) to (7) and 103 KAR

16:060.

 

      Section 2. Sales

Factor. "Sales" means operating income as defined by the Interstate

Commerce Commission (Civil Aeronautics Board for airlines). The sales factor is

a fraction, the numerator of which is operating income assigned to Kentucky and

the denominator of which is total operating income. Kentucky operating income

is determined as follows: Total operating income shall be multiplied by a

fraction the numerator of which is miles operated in Kentucky and the

denominator of which is total miles operated.

 

      Section 3.

Property Factor. The property factor is a fraction, the numerator of which is

the average value of tangible property sitused in Kentucky that is owned and

used, and/or leased and used. The denominator is the average value of all

tangible sitused property that is owned and used and/or leased and used. The

average value of tangible sitused property during the tax period shall be

determined under the provisions of KRS 141.120(8)(a). The value of

over-the-road equipment and of aircraft shall be excluded in determining the

average value of both Kentucky and total property.

 

      Section 4.

Payroll Factor. The payroll factor shall be determined under the provisions of

KRS 141.120(8)(b). (IC-12; 1 Ky.R. 224; eff. 1-8-75; Am. 20 Ky.R. 2875; eff.

5-18-94.)