Kentucky has enacted legislation that exempts specified services from taxation if one of the following conditions is met:
Under either of the above circumstances, if gross receipts from the sales exceed $6000 in a calendar year, all gross receipts over $6000 are taxable in that calendar year, and all gross receipts are subject to tax in subsequent calendar years. The specified services this exemption applies to are:
The burden of proving that these services are not taxable is on the seller unless they take from the purchaser a fully completed resale certificate, Streamlined Sales and Use Tax Agreement exemption certificate, or a certificate showing the property is purchased under a direct pay authorization. Kentucky had previously enacted legislation that expanded its sales tax base to subject these specified services to sales tax, effective July 1, 2018.
The exemption for sales under $6000 does not apply if a person also sells tangible personal property, digital property, or services related to any of the following:
The burden of proving that these services are not taxable is on the seller unless they take from the purchaser a fully completed exemption certificate or Streamlined Sales and Use Tax Agreement exemption certificate.
The legislation excludes from “extended warranty services” sales of service contracts for tangible personal property to be used by a small telephone utility or a Tier III CMRS provider to deliver communications services or broadband. (H.B. 354, Laws 2019, effective July 1, 2019)