Under increasing pressure from small business owners, Kentucky state lawmakers approved a bill that substantially lowers the tax burden on smaller frms — in part by suspending proposed tax cuts for large corporations.
The bill proposes that businesses with less the $3 million in gross annual profits would be exempt from the alternative minimum calculation. The proposed legislation also allows owners to claim deductions from so-called “pass-through” business entities on their personal income taxes, while offsetting profits from one business with losses from another.
On the flip side, the bill would raise the minimum corporate tax to $200 to compensate for a loss of potential revenues from the changes in the legislation. It would also delay a drop in the top corporate tax rate from 7% to 6% until 2009.