KY HB451

Corporations and limited liability pass-through entities with Kentucky gross receipts under $100,000 will be exempt from the limited liability entity tax beginning January 1, 2027

Currently, entities with gross receipts from all sources of $3 million or less pay a minimum tax of $175; entities between $3-6 million pay graduated rates; entities at or above $6 million pay $0.095 per $100 of Kentucky gross receipts or $0.75 per $100 of Kentucky gross profits

The bill amends KRS 141.0401, which has imposed an annual limited liability entity tax on corporations and pass-through entities doing business in Kentucky since January 1, 2007

Numerous entity types remain exempt from the tax, including insurance companies, Section 501 nonprofits, public service corporations, REITs, regulated investment companies, cooperatives, and publicly traded partnerships

Tax credits continue to flow through multi-layered pass-through structures, with the credit claimed by the taxpayer who ultimately pays tax on the pass-through entity's income