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143.025 Determination of taxable gross value of severed coal.
(1)
(2)
(3)
(4)
Taxpayers severing coal in Kentucky and partially or wholly processing the
coal outside of Kentucky thereafter and taxpayers severing coal outside of
Kentucky and partially or wholly processing the coal in Kentucky thereafter
shall determine and report the gross value of the coal by application of the
following formula:
(a) Determine the direct cost of severing or processing the coal in Kentucky
as defined in paragraphs (d) and (e) of this subsection.
(b) Determine the direct cost of severing or processing the coal outside of
Kentucky as defined in paragraphs (d) and (e) of this subsection.
(c) Exclude from paragraphs (a) and (b) of this subsection transportation
expense and overhead cost as defined in paragraph (f) of this subsection.
(d) Include in the direct cost of severing coal: black lung excise tax; contract
mining, less transportation expense contained therein; cost depletion;
depreciation; development; equipment rental; explosives; fuel; labor and
associated expenses; maintenance; reclamation; royalties when based on
tons severed; and wheelage.
(e) Include in the direct cost of processing coal: depreciation; equipment
rental; fee processing; fuel; labor and associated expense; maintenance;
and refuse disposal.
(f) Include in the overhead costs: commissions; freight yard and siding
expense; general expense; general insurance and supervision; general
office expense; idle time expense; inventory adjustments; mine closing
expense; officers' salaries; percentage depletion; quality analysis; scale
and weighman's expense; transportation expense and taxes, including
sales, coal severance, property, franchises, and state income taxes.
For purposes of computing the formula under this section, any expense which
is not directly attributable to either the severing or processing of the coal shall
be classified as an overhead cost.
Direct cost determined in subsection (1)(a) of this section divided by the total of
direct cost determined in subsection (1)(a) of this section and the direct cost
determined in subsection (1)(b) of this section and the result multiplied by the
gross value of the coal shall equal the proportion of gross value which is
subject to the tax levied under KRS 143.020.
Any taxpayer determining taxable gross value as provided in this section shall
submit supporting computations and classifications of cost with each coal tax
return, unless the department authorizes the taxpayer to submit the supporting
information on a basis other than monthly.
Effective:July 1, 2013
History: Amended 2013 Ky. Acts ch. 119, sec. 19, effective July 1, 2013. -Amended 2005 Ky. Acts ch. 85, sec. 537, effective June 20, 2005. -- Created
1990 Ky. Acts ch. 163, sec. 2, effective July 13, 1990.
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