103 KAR 26:050.
RELATES TO: KRS 139.470,
KRS Chapter 13A
AND CONFORMITY: To interpret the sales and use tax law as it applies to
transactions involving common carriers.
Section 1. All
tangible personal property sold to or used by common carriers in this state
shall be subject to application of the sales or use tax with the exceptions
noted in Section 2 of this administrative regulation. Tax will be applicable to
leasing arrangements, or use pursuant to leasing arrangements, whereby items of
equipment (including, for example, but not limited to, such things as tires or
batteries) are acquired by common carriers for utilization over extended
periods of time in connection with operations. Such purchases, uses, leases,
and uses pursuant to leases are subject to the exceptions and qualifications
Section 2. Excepted
from application of the sales or use tax are the following:
(1) Over the road
equipment or floating equipment which enters this state in actual use in
interstate commerce at the time of entering, and is used exclusively in
interstate commerce thereafter (nominal use in intrastate commerce will not
affect this exception from application of tax).
(2) Locomotives or
rolling stock, including materials for the construction, repair, or
modification thereof, or fuel or supplies for the direct operation of
locomotives or trains, used or to be used in interstate commerce. The term
"rolling stock" shall mean only that equipment designed to move on
rails and used for the transportation of goods or passengers for hire.
(3) Aircraft, repair
and replacement parts therefor, and supplies, except fuel, for the direct
operation of aircraft in interstate commerce and used exclusively for the
conveyance of property or passengers for hire (nominal use in intrastate
commerce will not affect this exception from application of tax). (SU-43-1; 1
Ky.R. 229; eff. 1-8-75; Am. 9 Ky.R. 1152; eff. 5-4-83; 13 Ky.R. 1084; eff.
1-13-87; Tam eff. 5-20-09.)