Bill > HB721

This bill amends Kentucky's Limited Liability Entity Tax (LLET) to provide a small business exemption by preventing entities doing business in Kentucky with gross receipts less than $100,000 from being required to pay the LLET for taxable years beginning on or after January 1, 2026. Currently, businesses are required to pay an annual tax based on their Kentucky gross receipts or gross profits, with a minimum tax of $175, but the new provision will completely exempt smaller businesses meeting the $100,000 gross receipts threshold from paying this tax. This change aims to reduce the tax burden on smaller businesses operating in Kentucky by eliminating the LLET for those with relatively low annual revenues. The bill maintains the existing complex calculation method for determining the tax for businesses with gross receipts above $100,000, which involves different tax rates based on total gross receipts or gross profits, and continues to provide various exemptions for specific types of entities such as non-profits, certain cooperatives, and publicly traded partnerships.