State Codes and Statutes

Statutes > Kentucky > 141-00 > 121

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Page 1 of 2 141.121 Special rules for apportioning business income -- Passenger airlines -- Management of a treasury function. (1) As used in this section: (a) &quot;Kentucky revenue passenger miles&quot; means the total revenue passenger miles within the borders of Kentucky for all flight stages that either originate or <br>terminate in this state; (b) &quot;Liquid asset&quot; means an asset, other than functional currency or funds held in bank accounts, held to provide a relatively immediate source of funds to <br>satisfy the liquidity needs of the trade or business. &quot;Liquid assets&quot; include: <br>1. Foreign currency and trading positions therein, other than functional <br>currency used in the regular course of the corporation's trade or business; 2. Marketable instruments, including stocks, bonds, debentures, options, <br>warrants, and futures contracts; and 3. Mutual funds which hold liquid assets; (c) &quot;Marketable instrument&quot; means an instrument that is traded in an established stock or securities market and is regularly quoted by brokers or dealers in <br>making a market; (d) &quot;Overall net gain&quot; means the total net gain from all transactions incurred at each treasury function for the entire taxable period. &quot;Overall net gain&quot; does <br>not mean the net gain from a specific transaction if multiple transactions occur <br>during the taxable period; (e) &quot;Passenger airline&quot; means a person or corporation engaged primarily in the carriage by aircraft of passengers in interstate commerce; (f) &quot;Revenue passenger miles&quot; means miles calculated in accordance with 14 C.F.R. Part 241; and (g) &quot;Treasury function&quot; means the pooling and management of liquid assets for the purpose of satisfying the cash flow needs of the trade or business and <br>includes the following situations: <br>1. Providing liquidity for a corporation's business cycle; and 2. Providing a reserve for business contingencies or business acquisitions. (2) If a corporation holds liquid assets in connection with one (1) or more treasury functions of the corporation, and the liquid assets produce business income when <br>sold, exchanged, or otherwise disposed of, the overall net gain from those <br>transactions for each treasury function for the tax period shall be included in the <br>sales factor. For purposes of this subsection: <br>(a) Each treasury function shall be considered separately; and <br>(b) A corporation principally engaged in the trade or business of purchasing and selling instruments or other items included in the definition of liquid assets is <br>not performing a treasury function with respect to that income produced. (3) For purposes of apportioning business income to this state, passenger airlines shall determine the property, payroll, and sales factors as follows: Page 2 of 2 (a) Except as modified by this subsection, the property factor shall be determined as provided in KRS 141.120(8)(a). Aircraft operated by a passenger airline <br>shall be included in both the numerator and denominator of the property <br>factor. Aircraft shall be included in the numerator of the property factor by <br>determining the product of: <br>1. The total average value of the aircraft operated by the passenger airline; <br>and 2. A fraction, the numerator of which is the Kentucky revenue passenger <br>miles of the passenger airline for the taxable year and the denominator <br>of which is the total revenue passenger miles of the passenger airline for <br>the taxable year; (b) Except as modified by this subsection, the payroll factor shall be determined as provided in KRS 141.120(8)(b). Compensation paid during the tax period <br>by a passenger airline to flight personnel shall be included in the numerator of <br>the payroll factor by determining the product of: <br>1. The total amount paid during the taxable year to flight personnel; and 2. A fraction, the numerator of which is the Kentucky revenue passenger <br>miles of the passenger airline for the taxable year and the denominator <br>of which is the total revenue passenger miles of the passenger airline for <br>the taxable year; and (c) Except as modified by this subsection, the sales factor shall be determined as provided in KRS 141.120(8)(c). Transportation revenues shall be included in <br>the numerator of the sales factor by determining the product of: <br>1. The total transportation revenues of the passenger airline for the taxable <br>year; and 2. A fraction, the numerator of which is the Kentucky revenue passenger <br>miles for the taxable year and the denominator of which is the total <br>revenue passenger miles for the taxable year. Effective: July 15, 2008 <br>History: Created 2008 Ky. Acts ch. 18, sec. 3, effective July 15, 2008. <br>Legislative Research Commission Note (7/15/2008). 2008 Ky. Acts ch. 18, sec. 4 provides that this section &quot;shall apply to taxable periods beginning after December <br>31, 2007.&quot;

State Codes and Statutes

Statutes > Kentucky > 141-00 > 121

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Page 1 of 2 141.121 Special rules for apportioning business income -- Passenger airlines -- Management of a treasury function. (1) As used in this section: (a) &quot;Kentucky revenue passenger miles&quot; means the total revenue passenger miles within the borders of Kentucky for all flight stages that either originate or <br>terminate in this state; (b) &quot;Liquid asset&quot; means an asset, other than functional currency or funds held in bank accounts, held to provide a relatively immediate source of funds to <br>satisfy the liquidity needs of the trade or business. &quot;Liquid assets&quot; include: <br>1. Foreign currency and trading positions therein, other than functional <br>currency used in the regular course of the corporation's trade or business; 2. Marketable instruments, including stocks, bonds, debentures, options, <br>warrants, and futures contracts; and 3. Mutual funds which hold liquid assets; (c) &quot;Marketable instrument&quot; means an instrument that is traded in an established stock or securities market and is regularly quoted by brokers or dealers in <br>making a market; (d) &quot;Overall net gain&quot; means the total net gain from all transactions incurred at each treasury function for the entire taxable period. &quot;Overall net gain&quot; does <br>not mean the net gain from a specific transaction if multiple transactions occur <br>during the taxable period; (e) &quot;Passenger airline&quot; means a person or corporation engaged primarily in the carriage by aircraft of passengers in interstate commerce; (f) &quot;Revenue passenger miles&quot; means miles calculated in accordance with 14 C.F.R. Part 241; and (g) &quot;Treasury function&quot; means the pooling and management of liquid assets for the purpose of satisfying the cash flow needs of the trade or business and <br>includes the following situations: <br>1. Providing liquidity for a corporation's business cycle; and 2. Providing a reserve for business contingencies or business acquisitions. (2) If a corporation holds liquid assets in connection with one (1) or more treasury functions of the corporation, and the liquid assets produce business income when <br>sold, exchanged, or otherwise disposed of, the overall net gain from those <br>transactions for each treasury function for the tax period shall be included in the <br>sales factor. For purposes of this subsection: <br>(a) Each treasury function shall be considered separately; and <br>(b) A corporation principally engaged in the trade or business of purchasing and selling instruments or other items included in the definition of liquid assets is <br>not performing a treasury function with respect to that income produced. (3) For purposes of apportioning business income to this state, passenger airlines shall determine the property, payroll, and sales factors as follows: Page 2 of 2 (a) Except as modified by this subsection, the property factor shall be determined as provided in KRS 141.120(8)(a). Aircraft operated by a passenger airline <br>shall be included in both the numerator and denominator of the property <br>factor. Aircraft shall be included in the numerator of the property factor by <br>determining the product of: <br>1. The total average value of the aircraft operated by the passenger airline; <br>and 2. A fraction, the numerator of which is the Kentucky revenue passenger <br>miles of the passenger airline for the taxable year and the denominator <br>of which is the total revenue passenger miles of the passenger airline for <br>the taxable year; (b) Except as modified by this subsection, the payroll factor shall be determined as provided in KRS 141.120(8)(b). Compensation paid during the tax period <br>by a passenger airline to flight personnel shall be included in the numerator of <br>the payroll factor by determining the product of: <br>1. The total amount paid during the taxable year to flight personnel; and 2. A fraction, the numerator of which is the Kentucky revenue passenger <br>miles of the passenger airline for the taxable year and the denominator <br>of which is the total revenue passenger miles of the passenger airline for <br>the taxable year; and (c) Except as modified by this subsection, the sales factor shall be determined as provided in KRS 141.120(8)(c). Transportation revenues shall be included in <br>the numerator of the sales factor by determining the product of: <br>1. The total transportation revenues of the passenger airline for the taxable <br>year; and 2. A fraction, the numerator of which is the Kentucky revenue passenger <br>miles for the taxable year and the denominator of which is the total <br>revenue passenger miles for the taxable year. Effective: July 15, 2008 <br>History: Created 2008 Ky. Acts ch. 18, sec. 3, effective July 15, 2008. <br>Legislative Research Commission Note (7/15/2008). 2008 Ky. Acts ch. 18, sec. 4 provides that this section &quot;shall apply to taxable periods beginning after December <br>31, 2007.&quot;

State Codes and Statutes

State Codes and Statutes

Statutes > Kentucky > 141-00 > 121

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Page 1 of 2 141.121 Special rules for apportioning business income -- Passenger airlines -- Management of a treasury function. (1) As used in this section: (a) &quot;Kentucky revenue passenger miles&quot; means the total revenue passenger miles within the borders of Kentucky for all flight stages that either originate or <br>terminate in this state; (b) &quot;Liquid asset&quot; means an asset, other than functional currency or funds held in bank accounts, held to provide a relatively immediate source of funds to <br>satisfy the liquidity needs of the trade or business. &quot;Liquid assets&quot; include: <br>1. Foreign currency and trading positions therein, other than functional <br>currency used in the regular course of the corporation's trade or business; 2. Marketable instruments, including stocks, bonds, debentures, options, <br>warrants, and futures contracts; and 3. Mutual funds which hold liquid assets; (c) &quot;Marketable instrument&quot; means an instrument that is traded in an established stock or securities market and is regularly quoted by brokers or dealers in <br>making a market; (d) &quot;Overall net gain&quot; means the total net gain from all transactions incurred at each treasury function for the entire taxable period. &quot;Overall net gain&quot; does <br>not mean the net gain from a specific transaction if multiple transactions occur <br>during the taxable period; (e) &quot;Passenger airline&quot; means a person or corporation engaged primarily in the carriage by aircraft of passengers in interstate commerce; (f) &quot;Revenue passenger miles&quot; means miles calculated in accordance with 14 C.F.R. Part 241; and (g) &quot;Treasury function&quot; means the pooling and management of liquid assets for the purpose of satisfying the cash flow needs of the trade or business and <br>includes the following situations: <br>1. Providing liquidity for a corporation's business cycle; and 2. Providing a reserve for business contingencies or business acquisitions. (2) If a corporation holds liquid assets in connection with one (1) or more treasury functions of the corporation, and the liquid assets produce business income when <br>sold, exchanged, or otherwise disposed of, the overall net gain from those <br>transactions for each treasury function for the tax period shall be included in the <br>sales factor. For purposes of this subsection: <br>(a) Each treasury function shall be considered separately; and <br>(b) A corporation principally engaged in the trade or business of purchasing and selling instruments or other items included in the definition of liquid assets is <br>not performing a treasury function with respect to that income produced. (3) For purposes of apportioning business income to this state, passenger airlines shall determine the property, payroll, and sales factors as follows: Page 2 of 2 (a) Except as modified by this subsection, the property factor shall be determined as provided in KRS 141.120(8)(a). Aircraft operated by a passenger airline <br>shall be included in both the numerator and denominator of the property <br>factor. Aircraft shall be included in the numerator of the property factor by <br>determining the product of: <br>1. The total average value of the aircraft operated by the passenger airline; <br>and 2. A fraction, the numerator of which is the Kentucky revenue passenger <br>miles of the passenger airline for the taxable year and the denominator <br>of which is the total revenue passenger miles of the passenger airline for <br>the taxable year; (b) Except as modified by this subsection, the payroll factor shall be determined as provided in KRS 141.120(8)(b). Compensation paid during the tax period <br>by a passenger airline to flight personnel shall be included in the numerator of <br>the payroll factor by determining the product of: <br>1. The total amount paid during the taxable year to flight personnel; and 2. A fraction, the numerator of which is the Kentucky revenue passenger <br>miles of the passenger airline for the taxable year and the denominator <br>of which is the total revenue passenger miles of the passenger airline for <br>the taxable year; and (c) Except as modified by this subsection, the sales factor shall be determined as provided in KRS 141.120(8)(c). Transportation revenues shall be included in <br>the numerator of the sales factor by determining the product of: <br>1. The total transportation revenues of the passenger airline for the taxable <br>year; and 2. A fraction, the numerator of which is the Kentucky revenue passenger <br>miles for the taxable year and the denominator of which is the total <br>revenue passenger miles for the taxable year. Effective: July 15, 2008 <br>History: Created 2008 Ky. Acts ch. 18, sec. 3, effective July 15, 2008. <br>Legislative Research Commission Note (7/15/2008). 2008 Ky. Acts ch. 18, sec. 4 provides that this section &quot;shall apply to taxable periods beginning after December <br>31, 2007.&quot;