The state of Kentucky has made some changes towards the sales and use tax forms starting July 2013 and forward. See KY 2013 Legilation-HB440
First, the Bill requires out-of-state retailers who are not required to collect Kentucky use tax and expent less than $100,000 in gross sales to Kentucky residents and businesses in the current caledar year to provide a notice in their retail catalogs, web sites, and invoices that purchasers of non-exempt tangible property or digital property for storage, use, or other consumption must report and pay use tax directly to the Kentucky Department of Revenue. The use tax notice must be readily visible for customers to read.
The vendor compensation discount credit has been increased from 1% to 1.5%. Sellers can take this deduction on each tax return due that is in excess of $1,000. The credit allowed on the first $1,000 remain unchanged at 1.75%. The total compensation allowed for each vendor in any reporting period has been reduced from $1,500 to $50.00.
The sales and use tax exemption for charges or surcharges added to the total amount of a residential telecommunications service has been repealed.
The bill adds combine header trailers as a farm machinery exemption now.
In July of 2014, the way Kentucky's motor vehivle usage tax is collected changes. It has been amended to calculate the motor vehicle usage tax after allowance of the trade-in credit on new vehicle purchases in similar fashion as currently allowed wit the sale of used of vehicles.
KY 2013 Legilation- HB 361 applies to wholesale tobacco retailers. It establishes monthly reporting requirements for both in-state and out-of-state manufacturers of tobacco products to file information with the state department regarding products shipped into KY by product and brand. This goes into effect July 1, 2013. It requires wholesarles to itemize excist tax on invoices which both wholesales and retailers must maintain at each licensed place of business. Effective August 1, 2013 it creates a new tobacco product category that includes chewing tobacco with a graduated tax rate. This legilsation prohibits a retailer from purchasing tobacco products from a non-licensed distributor unless the retailer is a licensed retail distributer who pays the applicable tax rates on the purchase price of tobacco products directly to the Deparment. It allows for distributor compensation of 1% of tax due for both wholesalers and retailers on time. It creates new license classifications and establishes contraband provisions for tobacco products milar to what is currently in place for cigarettes whick is delayed until January 1, 2014.
A new 2.3% medical device excise tax has been imposed on manufacturers and importers based on their sales price of certain medical devices beginning January 1, 2013. This tax does not apply to the sale of eyeglasses, contact lenses, and hearing aids and also the sales of any other devices that are of a type generally purchased by the general public at retail for individual use.
Credit card surcharges are subject to Kentucky sales and use tax if passed on to the consumer by the retailer and become part of gross receipts.
Lastly, restaurants have the option to charge a 3% additional tax on restaurant receipts for support of local tourist and convention activity.
These are changes that clients need to pay attention to to make sure they are in compliance. Please contact our office if you have any more questions.