Kentucky Tax Increases…. On some Services

Many in Kentucky have always known that services were not something that was taxable. Well, as of April 27th 2018 some service industries in Kentucky will now be taxed. This, however; does not go into effect until July 1, 2018. The tax rate that people can expect to pay on these services is 6% of the gross sale. Below is a list of some of the services that you can see the 6% tax increase.

  • Extended Warranty Services – Sale of extended warranty services to repair, support, or maintain tangible personal property or digital property that is taxable to the warranty holder. Sales tax will apply to service contract agreements sold on or after July 1, 2018.
  • Facility/Event Admission Fees – Except admission to racetracks taxed under KRS 138.480, historical sites exempt under KRS 139.482, and the part of admissions to county fairs exempt under KRS 139.470
    • Fees include, but are not limited to: admission fees, initiation fees, monthly fees, and membership fees.
    • Facilities include but are not limited to: bowling centers; skating rinks; health spas; swimming pools; tennis courts; weight training facilities; fitness and recreational sports centers; and golf courses (both public and private).
  • Indoor Skin Tanning Services – Including but not limited to:
    • tanning booth or tanning bed
    • spray tanning
  • Janitorial Services – Including but not limited to:
    • residential and commercial cleaning
    • carpet, upholstery, and window cleaning
  • Landscape Services – Including but not limited to:
    • lawn care and maintenance
    • tree trimming, pruning or removal
    • landscape design and installation
    • landscape care and maintenance
    • snow plowing and removal
  • Limousine Services – Sales tax must be collected if a driver is provided.
  • Laundry/Dry Cleaning Services

Industrial Laundry Services, including but not limited to:

  1. industrial uniform supply
  2. protective apparel supply
  3. industrial mat and rug supply

Linen supply services, including but not limited to:

  1. table and bed linen supply
  2. non-industrial uniform supply services

Non-coin operated laundry and dry-cleaning services

  • Non-medical Diet and Weight Reducing Services – Sales and use tax must be collected when providing non-medical diet and weight reducing services.
  • Pet Care ServicesPet care services, including but not limited to:
    • grooming and boarding
    • pet sitting
    • pet obedience training
  • Rental of Campsites – Taxable accommodations will now include campsites, campgrounds and Recreational Vehicle (RV) Parks.  Rentals for a continuous period of 30 days or more to a person are excluded from sales tax.  These new accommodations subject to sales tax will not be subject to the state-wide or local transient room taxes.
  • Veterinary Services – Sales and use tax must be collected when providing veterinary services for small animals.  Sales and use tax does not need to be collected when veterinary services are provided for equine, cattle, swine, sheep, goats, llamas, alpacas, ratite birds, buffalo, and cervids.
  • Labor Charges for Installation or Repair of Tangible Personal Property, Digital Property or Services Sold.
    • Please note that labor associated with the repair of fixtures to real property such as HVAC units, water heaters or plumbing fixtures will not become subject to tax.
    • Labor is taxable if it is part of a taxable retail sale. An example would be the labor bill of a mechanic to sell and install repair parts in a car.

 

The good news is that there is still time to prepare for this. If you should need assistance in getting your business prepared for the newest Kentucky Laws (HB487), Call Tomas Accounting at (859) 577-1785

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