Recent Changes to Sales Tax and Excise Taxes
Sales and Excise Taxes
Frequently Asked Questions for New Sports Wagering Excise Tax
2022 HB 8 and 2023 HB 360
Sales Tax
The 2022 Kentucky legislation in House Bill 8 and 2023 legislation in House Bill 360 make substantial changes to how various services are taxed within the state. In the area of sales and use tax, more than thirty (30) additional service categories became 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 bills also create and/or amend several sales and use tax exemptions.
Excise Tax
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.
Sales Tax Facts
The December 2024 edition of the Kentucky Sales Tax Facts highlights several newly taxable services, covers certain fees passed on to the consumer by the seller that may or may not be subject to sales tax, explains the tax treatment for video streaming services, and discusses the Agriculture Exemption License Number expiration date.
The June 2024 edition of the Kentucky Sales Tax Facts offers details on 2024 legislative changes impacting sales and use tax along with other administrative topics such as labor and installation services and potential refunds available under disaster relief declarations.
The December 2023 edition of the Kentucky Sales Tax Facts highlights issues related to non-profit groups, extended warranty services, short-term rental services, and RV camper trailers.
The
June 2023 edition of the Kentucky Sales Tax Facts newsletter provides details on changes in taxable services and the provision of exemptions provided in HB 360.
The December 2022 edition of the Kentucky Sales Tax Facts newsletter gives details regarding the Residential Utility Exemption.
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
June 2022 edition of the Kentucky Sales Tax Facts newsletter provides an overall summary of these legislative changes.
Frequently Asked Questions for House Bill 8 and House Bill 360
Information on 2018 and 2019 changes to sales tax on services
can be found here.