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Controlling Your Taxes Your State Tax Obligations Kentucky Taxes on Business Income in Kentucky Franchise Tax in Kentucky
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Prior to 2006, 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 had to file an annual state license tax report. The tax was 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The now-repealed state license tax rate was $2.10 per $1,000 of capital employed with a minimum tax of $30.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 were entitled to a credit equal to $1.40 per $1,000 of the initial $350,000 of capital employed.
