Kentucky Enacts Remote Seller Reporting Requirement

Kentucky Governor Steve Beshear has signed a bill that requires out-of-state retailers not required to collect Kentucky use tax who again expect less than $100,000 in gross sales to Kentucky residents and businesses in the current calendar year to provide notice in their retail catalogs and on their retail websites, online auction websites, and invoices and similar documents that purchasers of nonexempt tangible personal property or digital property for storage, use, or other consumption in Kentucky must report and pay use tax on the property to the Kentucky Department of Revenue. The use tax notice must be readily visible. Retailers are prohibited from stating or implying on their websites or in their catalogs that there is no Kentucky tax due on purchases made from the retailer. The notification must contain the following statements: “The retailer is not required to and does not collect Kentucky sales or use tax.”; “The purchase may be subject to Kentucky use tax unless the purchase is exempt from taxation in Kentucky.”; “The purchase is not exempt merely because it is made over the Internet, by catalog, or by other remote means.”; and “The Commonwealth of Kentucky requires Kentucky purchasers to report all purchases of tangible personal property or digital property that are not taxed by the retailer and pay use tax on those purchases unless exempt under Kentucky law. The tax may be reported and paid on the Kentucky individual income tax return or by filing a consumer use tax return with the Kentucky Department of Revenue. These forms and corresponding instructions may be found on the Kentucky Department of Revenue’s Internet Web site.”Retailers may provide a prominent reference to a supplemental page or electronic link that contains the required notification language. In this case, the referring language must state “See important Kentucky sales and use tax information regarding tax you may owe directly to the Commonwealth of Kentucky.”Retailers can provide a consolidated notice meeting the above notice requirements if they are required to provide a similar use tax notification for another state.The provisions of the bill take effect on July 1, 2013.(H.B. 440, Laws 2013, effective as noted)

UPDATE: For additional information, click here to visit the Kentucky Department of Revenue website.

UPDATE: Kentucky enacted legislation, HB 354, that repeals the state’s notice and reporting requirements, effective July 1, 2019.

Posted on May 23, 2013