2014 Kentucky Revised Statutes CHAPTER 139 - SALES AND USE TAXES 139.505 Refundable credit of portion of sales tax paid on interstate business communications service.
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139.505 Refundable credit of portion of sales tax paid on interstate business
communications service.
(1)
(2)
(3)
(4)
(5)
(6)
For the purpose of this section, "gross receipts" means:
(a) Sales of tangible personal property in this state if:
1.
The property is delivered or shipped to a purchaser, other than the
United States government, or to the designee of the purchaser
within this state regardless of the f.o.b. point or other conditions of
the sale; or
2.
The property is shipped from an office, store, warehouse, factory, or
other place of storage in this state and the purchaser is the United
States government; and
(b) Sales other than sales of tangible personal property in this state if the
income-producing activity is performed in this state; or the
income-producing activity is performed both in and outside this state and
a greater proportion of the income-producing activity is performed in this
state than in any other state, based on cost of performance, or gross
receipt allocation method as provided by statute and elected by the
taxpayer.
Any business whose interstate communications service, subject to the sales
tax imposed under KRS Chapter 139 and deducted for federal income tax
purposes, exceeds five percent (5%) of the businesss Kentucky gross
receipts during the preceding calendar year is entitled to a refundable credit if:
(a) The business's annual Kentucky gross receipts are equal to or more than
one million dollars ($1,000,000); and
(b) The majority of the interstate communications service billed to a Kentucky
service address for the annual period is for communications service
originating outside of this state and terminating in this state.
The refundable credit shall be equal to the sales tax paid on the difference by
which the interstate communications service purchased by the business
exceeds five percent (5%) of the businesss Kentucky gross receipts.
Any business that qualifies for the refundable credit authorized by subsection
(2) of this section shall make an annual application for the refund on or after
June 1, 2002, and on or after every June 1 thereafter. The application shall be
made to the department on forms as the department may prescribe and shall
contain information regarding interstate communications service purchases and
any other information deemed necessary for the department to determine the
business's eligibility to receive a refund.
Notwithstanding the provisions of KRS 134.580 to the contrary, the
department, upon receipt of a properly documented refund application, shall
cause a timely refund to be made directly to the eligible business. Interest shall
not be allowed or paid on any refund made under this section.
To facilitate the administration of the refundable tax credit, the department shall
grant eligible businesses that apply for the tax credit permission to directly
report and pay the sales tax applicable to the purchase of communications
service. Once the business receives permission to directly report and pay the
tax, refunds issued according to subsection (2) of this section shall not include
(7)
(8)
any sales tax collected and paid by a communications service provider.
Any refund application submitted under this section is subject to examination
by the department. The examination shall occur within four (4) years from the
date the refund application is received by the department. Any overpayment
resulting from the examination shall be repaid to the State Treasury. In
addition, the amount required to be repaid is subject to the interest provisions
of KRS 131.183 and to the penalty provisions of KRS 131.180.
If a business owns directly or indirectly fifty percent (50%) or more of another
business, the credit computed under subsection (2) of this section shall be
computed on a combined basis, excluding any intercompany Kentucky gross
receipts.
Effective:June 20, 2005
History: Amended 2005 Ky. Acts ch. 85, sec. 421, effective June 20, 2005;
ch. 168, sec. 127, effective June 1, 2005; and ch. 173, Pt. XVI, sec. 4, effective
March 20, 2005. -- Created 2000 Ky. Acts ch. 547, sec. 8, effective January 1,
2001.
Legislative Research Commission Note (3/20/2005). This section was amended
by 2005 Ky. Acts chs. 85, 168 and 173, which do not appear to be in conflict and
have been codified together.
Legislative Research Commission Note (3/20/2005). 2005 Ky. Acts chs. 11, 85,
95, 97, 98, 99, 123, and 181 instruct the Reviser of Statutes to correct statutory
references to agencies and officers whose names have been changed in 2005
legislation confirming the reorganization of the executive branch. Such a
correction has been made in this section.
Legislative Research Commission Note (3/20/2005). 2005 Ky. Acts ch. 173, Part
XVI, sec. 7, provides that the amendments made to this section in Section 4 of
that Part (and coincidentally in 2005 Ky. Acts ch. 168, sec. 127), relating to the
sales tax on communication services, shall apply to applicants filing on or after
June 1, 2003.
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