Kentucky Tax Reform Expands Sales and Use Tax Base

The recently passed House Bill 366 doesn’t tax the sale of all services, but it is a big step in that direction.  Effective July 1, 2018, KY sales tax will apply to the following:

• Landscaping services, including but not limited to lawn care and maintenance services; tree trimming, pruning, or removal services; landscape design and installation services; landscape care and maintenance services; and snow plowing and removal services
• Janitorial services, including but not limited to residential and commercial cleaning services and carpet, upholstery, and window cleaning services
• Small animal veterinary services, excluding veterinary services for equine, cattle, swine, sheep, goats, llamas, alpacas, ratite birds, buffalo, and cervids (animals commonly considered livestock)
• Pet care services, including but not limited to grooming and boarding services, pet sitting services, and pet obedience training services
• Industrial laundry services, including but not limited to industrial uniform supply services and industrial mat and rug supply services
• Non-coin operated laundry and dry cleaning services
• Linen supply services, including but not limited to table and bed linen supply services and nonindustrial uniform supply services
• Indoor skin tanning services, including but not limited to tanning booth or tanning bed services and spray tanning services
• Non-medical diet and weight reducing services
• Limousine services, if a driver is provided (anticipation of driverless vehicles??)
• Extended warranty services to maintain, repair or support tangible personal property or digital property
• Admissions to events and facilities including but not limited to initiation fees, monthly fees and membership fees: facilities include bowling centers, skating rinks, health spas, swimming pools, tennis courts, weight training facilities, fitness and recreational sports centers and public and private golf courses (admissions to racetracks and historical sites remain exempt)
• Labor or services rendered in installing or applying any tangible personal property, digital property or service sold (labor associated with the repair of real property, like HVAC, will remain exempt)

If the above applies to your business, you should start collecting 6% KY sales tax on those services. If you already have a KY Sales and Use Tax Account, you can use that account to remit the tax due.  You will need to apply for an account by July 1, 2018, with the KY Department of Revenue if you do not currently have one.  Please contact our office at 1-866-287-9604 if we can assist in the application or if you have additional questions on how this applies to your business.