Changes effective January 1, 2023
2022 Kentucky legislation in House Bill 8 makes substantial changes to how various services are taxed within the state. In the area of sales and use tax, thirty-four (34) additional service categories become subject to tax. Businesses that provide the new services are required to collect the 6% sales tax from their customers for providing these services. The bill also creates and/or amends several sales and use tax exemptions.
In the excise tax category, the following changes were made:
- An expansion of the 1% state transient room tax along with the various local transient room taxes to include campgrounds and RV parks.
- KRS 138.472 establishes a new 6% excise tax on the gross receipts of vehicle rentals, peer to peer car sharing rentals, transportation network company services, taxicab services and limousine services.
- KRS 138.477 imposes a new excise tax on electric vehicle power distributed by an electric power dealer to charge electric vehicles in the state at the rate of three cents ($0.03) per kilowatt hour. There are also annual electric vehicle owner registration fees established in KRS 138.475. The effective date for the electric vehicle power tax and electric vehicle registration fees is January 1, 2024.
The
June 2022 edition of the Kentucky Sales Tax Facts newsletter provides an overall summary of these legislative changes.
The
September 2022 edition of the Kentucky Sales Tax Facts newsletter provides more details on some of the expanded services included in House Bill 8.
The December 2022 edition of the Kentucky Sales Tax Facts newsletter gives details regarding the Residential Utility Exemption.
The Department of Revenue is providing this platform to help you understand the new sales and excise tax law changes and to provide updates as answers are developed to various questions posed by the public on these topics. This site will be updated regularly to provide more details and additional guidance in preparation for the January 1, 2023, effective date.
House Bill 8 Frequently Asked Questions (2022)
Information on 2018 and 2019 changes to sales tax on services
can be found here.