103 KAR 26:010. Service enterprises in

general.

 

      RELATES TO: KRS 139.130

      STATUTORY AUTHORITY: KRS 131.130(1)

      NECESSITY, FUNCTION, AND CONFORMITY: KRS

131.130(1) authorizes the Department of Revenue to promulgate administrative

regulations necessary for the administration and enforcement of all tax laws in

Kentucky. This administrative regulation establishes sales and use tax

requirements for service enterprises in general.

 

      Section 1. (1) Persons engaged in the

business of rendering service shall be classified as consumers, not retailers,

of the tangible personal property which they use incidentally in rendering the

service. Tax shall apply to the sale of tangible personal property to consumers.

      (2) The list in this subsection shall

serve as examples of service enterprises:

      (a) Advertising agencies;

      (b) Banks;

      (c) Barbers;

      (d) Beauty shop operators;

      (e) Bootblacks;

      (f) Cleaners;

      (g) Launderers;

      (h) Shoe repairmen;

      (i) Taxidermists;

      (j) Tire repairers; and

      (k) Similar enterprises.

 

      Section 2. (1) Persons rendering

professional services shall be classified as consumers, not retailers, of the

tangible personal property which they use incidentally in rendering their

services.

      (2) The list in this subsection shall

serve as examples of persons rendering professional services:

      (a) Accountants;

      (b) Architects;

      (c) Audience research service providers;

      (d) Cable television service providers;

      (e) Construction information service

providers;

      (f) Engineers; and

      (g) Lawyers.

 

      Section 3. If a person engaged in the

business of rendering services also regularly engages in the business of

selling tangible personal property to consumers, that person shall be

classified as a retailer with respect to the sales, and shall obtain permits,

file returns, and remit tax measured by the sales.

 

      Section 4. (1) This administrative

regulation shall replace Revenue Policies 51P440, 51P441, and 51P442.

      (2) Revenue Policies 51P440, 51P441, and

51P442 are hereby rescinded and shall be null, void, and unenforceable. (SU-21-2; 1 Ky.R. 144; eff. 12-11-74; 33 Ky.R.

2343; 3150; eff. 5-4-2007; TAm eff. 5-20-09.)