House Bill 1: Tax
Code Reform For Small Businesses
This past June, Governor Ernie Fletcher signed a bill that
repealed the alternative minimum tax for companies with gross receipts or gross
profits of $3 million or less.
The bill, passed by both the House and Senate unanimously in a
special session, provides immediate tax relief for companies whose gross
receipts or gross profits don't exceed $3 million. The Alternative Minimum
Calculation (AMC) is partially reduced for businesses with gross receipts or
gross profits between $3 million and $6 million.
As a result of the tax structure created in 2005, businesses
had to pay the greater of the amounts of corporate tax produced by one of three
calculations: the traditional corporate income tax, a $175 minimum tax, or the
AMC tax.
Today, not only are many small businesses exempt from the AMC
tax calculation, but eighteen other types of entities, including political
organizations, public service corporations, charities, and agricultural
cooperatives are exempt as well.
For more information about business taxes, please visit the
Kentucky Department of Revenue's Web site at http://revenue.ky.gov/
and the Cabinet for Economic Development's Web page on Kentucky's tax structure
at http://www.ced.ky.gov/KYEDC/biztax.aspx.
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