KRS 141.010 — Definitions for chapter for taxable years beginning on or after January 1, 2018

As used in this chapter, for taxable years beginning on or after January 1, 2018:
(1) "Adjusted gross income," in the case of taxpayers other than corporatio ns, means
the amount calculated in KRS 141.019;
(2) "Captive real estate investment trust" means a real estate investment trust as defined
in Section 856 of the Internal Revenue Code that meets the following requirements:
(a) 1. The shares or other ownersh ip interests of the real estate investment
trust are not regularly traded on an established securities market; or
2. The real estate investment trust does not have enough shareholders or
owners to be required to register with the Securities and Exchange
Commission;
(b) 1. The maximum amount of stock or other ownership interest that is owned
or constructively owned by a corporation equals or exceeds:
a. Twenty-five percent (25%), if the corporation does not occupy
property owned, constructively owned, or con trolled by the real
estate investment trust; or
b. Ten percent (10%), if the corporation occupies property owned,
constructively owned, or controlled by the real estate investment
trust.
The total ownership interest of a corporation shall be determined by
aggregating all interests owned or constructively owned by a
corporation; and
2. For the purposes of this paragraph:
a. "Corporation" means a corporation taxable under KRS 141.040,
and includes an affiliated group as defined in KRS 141.200, that is
required to file a consolidated return pursuant to KRS 14 1.200;
and
b. "Owned or constructively owned" means owning shares or having
an ownership interest in the real estate investment trust, or owning
an interest in an entity that owns shares or has an ownership
interest in the real estate investment trust. Con structive ownership
shall be determined by looking across multiple layers of a
multilayer pass-through structure; and
(c) The real estate investment trust is not owned by another real estate investment
trust;
(3) "Commissioner" means the commissioner of the department;
(4) "Corporation" has the same meaning as in Section 7701(a)(3) of the Internal
Revenue Code;
(5) "Critical infrastructure" means property and equipment owned or used by
communications networks, electric generation, transmission or distribution systems,
gas distribution systems, or water or wastewater pipelines that service multiple
customers or citizens, including but not limited to real and personal property such
as buildings, offices, lines, poles, pipes, structures, or equipment;
(6) "Declared state disaster or emergency" means a disaster or emergency event for
which:
(a) The Governor has declared a state of emergency pursuant to KRS 39A.100; or
(b) A presidential declaration of a federal major disaster or emergency has been
issued;
(7) "Department" means the Department of Revenue;
(8) "Dependent" means those persons defined as dependents in the Internal Revenue
Code;
(9) "Disaster or emergency -related work" means repairing, renovating, installing,
building, or rendering services that are es sential to the restoration of critical
infrastructure that has been damaged, impaired, or destroyed by a declared state
disaster or emergency;
(10) "Disaster response business" means any entity:
(a) That has no presence in the state and conducts no busines s in the state, except
for disaster or emergency-related work during a disaster response period;
(b) Whose services are requested by a registered business or by a state or local
government for purposes of performing disaster or emergency -related work in
the state during a disaster response period; and
(c) That has no registrations, tax filings, or nexus in this state other than disaster
or emergency -related work during the calendar year immediately preceding
the declared state disaster or emergency;
(11) "Disaster response employee" means an employee who does not work or reside in
the state, except for disaster or emergency-related work during the disaster response
period;
(12) "Disaster response period" means a period that begins ten (10) days prior to the first
day of the Governor's declaration under KRS 39A.100, or the President's
declaration of a federal major disaster or emergency, whichever occurs first, and
that extends thirty (30) calendar days after the declared state disaster or emergency;
(13) "Doing business in this state" includes but is not limited to:
(a) Being organized under the laws of this state;
(b) Having a commercial domicile in this state;
(c) Owning or leasing property in this state;
(d) Having one (1) or more individuals performing services in this state;
(e) Maintaining an interest in a pass-through entity doing business in this state;
(f) Deriving income from or attributable to sources within this state, including
deriving income directly or indirectly from a trust doing business in this state,
or deriving income directly or indirectly from a single -member limited
liability company that is doing business in this state and is disregarded as an
entity separate from its single member for federal income tax purposes; or
(g) Directing activities at Kentucky customers for the purpose of selling them
goods or services.
Nothing in this subsection s hall be interpreted in a manner that goes beyond the
limitations imposed and protections provided by the United States Constitution or
Pub. L. No. 86-272;
(14) "Employee" has the same meaning as in Section 3401(c) of the Internal Revenue
Code;
(15) "Employer" has the same meaning as in Section 3401(d) of the Internal Revenue
Code;
(16) "Fiduciary" has the same meaning as in Section 7701(a)(6) of the Internal Revenue
Code;
(17) "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;
(18) "Fiscal year" has the same meaning as in Section 7701(a)(24) of the Internal
Revenue Code;
(19) "Gross income":
(a) In the case of taxpayers other than corporations, has the same meaning as in
Section 61 of the Internal Revenue Code; and
(b) In the case of corporations, means the amount calculated in KRS 141.039;
(20) "Individual" means a natural person;
(21) "Internal Revenue Code" means for taxable years beginning on or after January 1,
2025, the Internal Revenue Code in effec t on December 31, 2024, exclusive of any
amendments made subsequent to that date, other than amendments that extend
provisions in effect on December 31, 2024, that would otherwise terminate;
(22) "Limited liability pass -through entity" means any pass -through entity that affords
any of its partners, members, shareholders, or owners, through function of the laws
of this state or laws recognized by this state, protection from general liability for
actions of the entity;
(23) "Modified gross income" means the greater of:
(a) Adjusted gross income as defined in 26 U.S.C. sec. 62, including any
amendments in effect on December 31 of the taxable year, and adjusted as
follows:
1. Include interest income derived from obligations of sister states and
political subdivisions thereof; and
2. Include lump -sum pension distributions taxed under the special
transition rules of Pub. L. No. 104-188, sec. 1401(c)(2); or
(b) Adjusted gross income as defined in subsection (1) of this section and
adjusted to include lump -sum pensio n distributions taxed under the special
transition rules of Pub. L. No. 104-188, sec. 1401(c)(2);
(24) "Net income":
(a) In the case of taxpayers other than corporations, means the amount calculated
in KRS 141.019; and
(b) In the case of corporations, means the amount calculated in KRS 141.039;
(25) "Nonresident" means any individual not a resident of this state;
(26) "Number of withholding exemptions claimed" means the number of withholding
exemptions claimed in a withholding exemption certificate in effect under KRS
141.325, except that if no such certificate is in effect, the number of withholding
exemptions claimed shall be considered to be zero;
(27) "Part-year resident" means any individual that has established or abandoned
Kentucky residency during the calendar year;
(28) "Pass-through entity" means any partnership, S corporation, limited liability
company, limite d liability partnership, limited partnership, or similar entity
recognized by the laws of this state that is not taxed for federal purposes at the
entity level, but instead passes to each partner, member, shareholder, or owner their
proportionate share of income, deductions, gains, losses, credits, and any other
similar attributes;
(29) "Payroll period" has the same meaning as in Section 3401(b) of the Internal
Revenue Code;
(30) "Person" has the same meaning as in Section 7701(a)(1) of the Internal Revenue
Code;
(31) "Registered business" means a business entity that owns or otherwise possesses
critical infrastructure and that is registered to do business in the state prior to the
declared state disaster or emergency;
(32) "Resident" means an individual dom iciled within this state or an individual who is
not domiciled in this state, but maintains a place of abode in this state and spends in
the aggregate more than one hundred eighty -three (183) days of the taxable year in
this state;
(33) "S corporation" has the same meaning as in Section 1361(a) of the Internal Revenue
Code;
(34) "State" means a state of the United States, the District of Columbia, the
Commonwealth of Puerto Rico, or any territory or possession of the United States;
(35) "Taxable net income":
(a) In the case of corporations that are taxable in this state, means "net income" as
defined in subsection (24) of this section;
(b) In the case of corporations that are taxable in this state and taxable in another
state, means "net income" as defined i n subsection (24) of this section and as
allocated and apportioned under KRS 141.120;
(c) For homeowners' associations as defined in Section 528(c) of the Internal
Revenue Code, means "taxable income" as defined in Section 528(d) of the
Internal Revenue Co de. Notwithstanding the provisions of subsection (21) of
this section, the Internal Revenue Code sections referred to in this paragraph
shall be those code sections in effect for the applicable tax year; and
(d) For a corporation that meets the requirement s established under Section 856
of the Internal Revenue Code to be a real estate investment trust, means "real
estate investment trust taxable income" as defined in Section 857(b)(2) of the
Internal Revenue Code, except that a captive real estate investmen t trust shall
not be allowed any deduction for dividends paid;
(36) "Taxable year" means the calendar year or fiscal year ending during such calendar
year, upon the basis of which net income is computed, and in the case of a return
made for a fractional pa rt of a year under the provisions of this chapter or under
administrative regulations prescribed by the commissioner, "taxable year" means
the period for which the return is made; and
(37) "Wages" has the same meaning as in Section 3401(a) of the Internal Revenue Code
and includes other income subject to withholding as provided in Section 3401(f)
and Section 3402(k), (o), (p), (q), and (s) of the Internal Revenue Code.