Sales, Use and International Tax Activity Update - July 2010

What do Propane, Breakfast Cereals, and Telecom all have in Common?

A Kentucky Department of Revenue Sales and Use Tax Newsletter details legislative developments from the 2010 legislative session and inform taxpayers of the following items:

• Effective July 1, 2010, telecommunications tax returns must be filed electronically unless the department approves a waiver based on a taxpayer's technological limitations.

• To document the exemption for residential sales of propane gas or refills for outdoor grills, vendors must maintain a log or similar document for at least four years that includes the amount and sales price of the propane, the customer’s residential address, and the customer’s signature. The document must also contain a statement reading, I hereby certify that the propane purchased is for residential cooking or heating at the residential address listed. This documentation is sufficient to relieve the vendor from sales tax liability on the sale. If there is any question regarding eligibility for this residential exemption, the department will contact the customer listed on the exemption log.
• Breakfast cereals containing sugar, honey, or other natural or artificial sweeteners and that do not list flour as an ingredient on the label are not classified as candy for sales and use tax purposes and are exempt. However, breakfast bars containing natural or artificial sweeteners in combination with fruits, nuts, or other ingredients and that do not list flour as an ingredient or require refrigeration are classified as candy and are, as a result, subject to tax.

• Rebates received under the state’s Energy Efficient Appliance Rebate Program on purchases of qualified Energy Star-rated appliances purchased on or after April 22, 2010 (until allotted funds are exhausted), have no effect on the sales and use tax due on the appliance purchase.

Kentucky Sales Tax Facts, Kentucky Department of Revenue, June 2010.

The Kentucky Sales Tax Facts can be viewed on the Kentucky Department of Revenue Web site.

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