103 KAR 16:120.
Apportionment and allocation; trucklines, buslines, airlines.
RELATES TO: KRS
AUTHORITY: KRS Chapter 13A
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.
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).
income shall be allocated to Kentucky by KRS 141.120(3) to (7) and 103 KAR
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.
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.
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.