In this year’s KY General Assembly, HB 366 and HB 487 were passed making changes to the state’s tax system.  These changes include sales tax expansions that will be in place July 1.  In the past, services have been exempt from sales tax, but soon many will not be.Under the new rules, the following services will be subject to sales tax.

• Landscaping and lawn care
• Janitorial services
• Pet care and grooming, and small animal veterinary services
• Non-coin operated laundry and dry cleaning
• Linen supply
• Indoor skin tanning services
• Nonmedical diet and weight loss centers
• Limousine services
• Overnight trailer campgrounds
• Extended warranties
• Labor charges for installation or repair of tangible personal property, digital property, or services sold
• Facility/event admission fees

All of these changes will impact transactions beginning July 1.  Any invoicing and tax collection systems will need to be updated at that point to make sure the customer is charged appropriately.  If you receive these service and are not charged sales tax, you should report use tax on your next sales and use tax return.  You may also want to let your vendor know of the change in the law.

Many of these services are specifically stated in the tax bill, but there are also businesses where things are less clear.  The KY Department of Revenue is posting answers to FAQs on this website.  We are working with each of our clients to help apply this new law to their specific situations.