Franchise Tax in Kentucky

April 13, 2006

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If your qualified corporation in Kentucky is a domestic corporation (a corporation organized in Kentucky) or a foreign corporation (a corporation organized in a state other than Kentucky), you must file an annual state license tax report. The tax is based on total capital employed in your corporation. Capital includes capital stock (the total amount of stock authorized for issue by a corporation), surplus, advances by affiliated companies, intercompany accounts, borrowed monies, or any other accounts representing additional capital used and employed in the business.

The state license tax rate is $2.10 per $1,000 of capital employed with a minimum tax of $30. If your corporation has a gross income of not over $500,000, you are entitled to a credit equal to $1.40 per $1,000 of the initial $350,000 of capital employed.