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AN ACT relating to menstrual discharge collection devices. 1
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 2
Section 1. KRS 139.010 is amended to read as follows: 3
As used in this chapter, unless the context otherwise provides: 4
(1) (a) "Admissions" means the fees paid for: 5
1. The right of entrance to a display, program, sporting event, music 6
concert, performance, play, show, movie, exhibit, fair, or other 7
entertainment or amusement event or venue; and 8
2. The privilege of using facilities or participating in an event or activity, 9
including but not limited to: 10
a. Bowling centers; 11
b. Skating rinks; 12
c. Health spas; 13
d. Swimming pools; 14
e. Tennis courts; 15
f. Weight training facilities; 16
g. Fitness and recreational sports centers; and 17
h. Golf courses, both public and private; 18
regardless of whether the fee paid is per use or in any other form, 19
including but not limited to an initiation fee, monthly fee, membership 20
fee, or combination thereof. 21
(b) "Admissions" does not include: 22
1. Any fee paid to enter or participate in a fishing tournament; or 23
2. Any fee paid for the use of a boat ramp for the purpose of allowing 24
boats to be launched into or hauled out from the water; 25
(2) "Advertising and promotional direct mail" means direct mail the primary purpose of 26
which is to attract public attention to a product, person, business, or organization, or 27 UNOFFICIAL COPY 24 RS BR 800
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to attempt to sell, popularize, or secure financial support for a product, person, 1
business, or organization. As used in this definition, "product" means tangible 2
personal property, an item transferred electronically, or a service; 3
(3) "Business" includes any activity engaged in by any person or caused to be engaged 4
in by that person with the object of gain, benefit, or advantage, either direct or 5
indirect; 6
(4) "Commonwealth" means the Commonwealth of Kentucky; 7
(5) (a) "Cosmetic surgery services" means modifications to all areas of the head, 8
neck, and body to enhance appearance through surgical and medical 9
techniques. 10
(b) "Cosmetic surgery services" does not include surgery services that are 11
medically necessary to reconstruct or correct dysfunctional areas of the face 12
and body due to birth disorders, trauma, burns, or disease; 13
(6) "Department" means the Department of Revenue; 14
(7) (a) "Digital audio-visual works" means a series of related images which, when 15
shown in succession, impart an impression of motion, with accompanying 16
sounds, if any. 17
(b) "Digital audio-visual works" includes movies, motion pictures, musical 18
videos, news and entertainment programs, and live events. 19
(c) "Digital audio-visual works" shall not include video greeting cards, video 20
games, and electronic games; 21
(8) (a) "Digital audio works" means works that result from the fixation of a series of 22
musical, spoken, or other sounds. 23
(b) "Digital audio works" includes ringtones, recorded or live songs, music, 24
readings of books or other written materials, speeches, or other sound 25
recordings. 26
(c) "Digital audio works" shall not include audio greeting cards sent by electronic 27 UNOFFICIAL COPY 24 RS BR 800
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mail; 1
(9) (a) "Digital books" means works that are generally recognized in the ordinary and 2
usual sense as books, including any literary work expressed in words, 3
numbers, or other verbal or numerical symbols or indicia if the literary work 4
is generally recognized in the ordinary or usual sense as a book. 5
(b) "Digital books" shall not include digital audio-visual works, digital audio 6
works, periodicals, magazines, newspapers, or other news or information 7
products, chat rooms, or weblogs; 8
(10) (a) "Digital code" means a code which provides a purchaser with a right to obtain 9
one (1) or more types of digital property. A "digital code" may be obtained by 10
any means, including electronic mail messaging or by tangible means, 11
regardless of the code's designation as a song code, video code, or book code. 12
(b) "Digital code" shall not include a code that represents: 13
1. A stored monetary value that is deducted from a total as it is used by the 14
purchaser; or 15
2. A redeemable card, gift card, or gift certificate that entitles the holder to 16
select specific types of digital property; 17
(11) (a) "Digital property" means any of the following which is transferred 18
electronically: 19
1. Digital audio works; 20
2. Digital books; 21
3. Finished artwork; 22
4. Digital photographs; 23
5. Periodicals; 24
6. Newspapers; 25
7. Magazines; 26
8. Video greeting cards; 27 UNOFFICIAL COPY 24 RS BR 800
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9. Audio greeting cards; 1
10. Video games; 2
11. Electronic games; or 3
12. Any digital code related to this property. 4
(b) "Digital property" shall not include digital audio-visual works or satellite 5
radio programming; 6
(12) (a) "Direct mail" means printed material delivered or distributed by United States 7
mail or other delivery service to a mass audience or to addressees on a mailing 8
list provided by the purchaser or at the direction of the purchaser when the 9
cost of the items are not billed directly to the recipient. 10
(b) "Direct mail" includes tangible personal property supplied directly or 11
indirectly by the purchaser to the direct mail retailer for inclusion in the 12
package containing the printed material. 13
(c) "Direct mail" does not include multiple items of printed material delivered to 14
a single address; 15
(13) "Directly used in the manufacturing or industrial processing process" means the 16
process that commences with the movement of raw materials from storage into a 17
continuous, unbroken, integrated process and ends when the finished product is 18
packaged and ready for sale; 19
(14) (a) "Executive employee recruitment services" means services provided by a 20
person to locate potential candidates to fill open senior-level management 21
positions. 22
(b) "Executive employee recruitment services" includes but is not limited to 23
making a detailed list of client requirements, researching and identifying 24
potential candidates, performing prescreening interviews, and providing 25
contract and salary negotiations; 26
(15) (a) "Extended warranty services" means services provided through a service 27 UNOFFICIAL COPY 24 RS BR 800
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contract agreement between the contract provider and the purchaser where the 1
purchaser agrees to pay compensation for the contract and the provider agrees 2
to repair, replace, support, or maintain tangible personal property, digital 3
property, real property, or prewritten computer software access services 4
according to the terms of the contract. 5
(b) "Extended warranty services" does not include the sale of a service contract 6
agreement for tangible personal property to be used by a small telephone 7
utility as defined in KRS 278.516 or a Tier III CMRS provider as defined in 8
KRS 65.7621 to deliver communications services as defined in KRS 136.602 9
or broadband; 10
(16) (a) "Finished artwork" means final art that is used for actual reproduction by 11
photomechanical or other processes or for display purposes. 12
(b) "Finished artwork" includes: 13
1. Assemblies; 14
2. Charts; 15
3. Designs; 16
4. Drawings; 17
5. Graphs; 18
6. Illustrative materials; 19
7. Lettering; 20
8. Mechanicals; 21
9. Paintings; and 22
10. Paste-ups; 23
(17) (a) "Gross receipts" and "sales price" mean the total amount or consideration, 24
including cash, credit, property, and services, for which tangible personal 25
property, digital property, or services are sold, leased, or rented, valued in 26
money, whether received in money or otherwise, without any deduction for 27 UNOFFICIAL COPY 24 RS BR 800
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any of the following: 1
1. The retailer's cost of the tangible personal property, digital property, or 2
services sold; 3
2. The cost of the materials used, labor or service cost, interest, losses, all 4
costs of transportation to the retailer, all taxes imposed on the retailer, or 5
any other expense of the retailer; 6
3. Charges by the retailer for any services necessary to complete the sale; 7
4. Delivery charges, which are defined as charges by the retailer for the 8
preparation and delivery to a location designated by the purchaser 9
including transportation, shipping, postage, handling, crating, and 10
packing; 11
5. Any amount for which credit is given to the purchaser by the retailer, 12
other than credit for tangible personal property or digital property traded 13
when the tangible personal property or digital property traded is of like 14
kind and character to the property purchased and the property traded is 15
held by the retailer for resale; and 16
6. The amount charged for labor or services rendered in installing or 17
applying the tangible personal property, digital property, or service sold. 18
(b) "Gross receipts" and "sales price" shall include consideration received by the 19
retailer from a third party if: 20
1. The retailer actually receives consideration from a third party and the 21
consideration is directly related to a price reduction or discount on the 22
sale to the purchaser; 23
2. The retailer has an obligation to pass the price reduction or discount 24
through to the purchaser; 25
3. The amount of consideration attributable to the sale is fixed and 26
determinable by the retailer at the time of the sale of the item to the 27 UNOFFICIAL COPY 24 RS BR 800
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purchaser; and 1
4. One (1) of the following criteria is met: 2
a. The purchaser presents a coupon, certificate, or other 3
documentation to the retailer to claim a price reduction or discount 4
where the coupon, certificate, or documentation is authorized, 5
distributed, or granted by a third party with the understanding that 6
the third party will reimburse any seller to whom the coupon, 7
certificate, or documentation is presented; 8
b. The price reduction or discount is identified as a third-party price 9
reduction or discount on the invoice received by the purchaser or 10
on a coupon, certificate, or other documentation presented by the 11
purchaser; or 12
c. The purchaser identifies himself or herself to the retailer as a 13
member of a group or organization entitled to a price reduction or 14
discount. A "preferred customer" card that is available to any 15
patron does not constitute membership in such a group. 16
(c) "Gross receipts" and "sales price" shall not include: 17
1. Discounts, including cash, term, or coupons that are not reimbursed by a 18
third party and that are allowed by a retailer and taken by a purchaser on 19
a sale; 20
2. Interest, financing, and carrying charges from credit extended on the 21
sale of tangible personal property, digital property, or services, if the 22
amount is separately stated on the invoice, bill of sale, or similar 23
document given to the purchaser; 24
3. Any taxes legally imposed directly on the purchaser that are separately 25
stated on the invoice, bill of sale, or similar document given to the 26
purchaser; or 27 UNOFFICIAL COPY 24 RS BR 800
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4. Local alcohol regulatory license fees authorized under KRS 243.075 that 1
are separately stated on the invoice, bill of sale, or similar document 2
given to the purchaser. 3
(d) As used in this subsection, "third party" means a person other than the 4
purchaser; 5
(18) "In this state" or "in the state" means within the exterior limits of the 6
Commonwealth and includes all territory within these limits owned by or ceded to 7
the United States of America; 8
(19) "Industrial processing" includes: 9
(a) Refining; 10
(b) Extraction of minerals, ores, coal, clay, stone, petroleum, or natural gas; 11
(c) Mining, quarrying, fabricating, and industrial assembling; 12
(d) The processing and packaging of raw materials, in-process materials, and 13
finished products; and 14
(e) The processing and packaging of farm and dairy products for sale; 15
(20) (a) "Lease or rental" means any transfer of possession or control of tangible 16
personal property for a fixed or indeterminate term for consideration. A lease 17
or rental shall include future options to: 18
1. Purchase the property; or 19
2. Extend the terms of the agreement and agreements covering trailers 20
where the amount of consideration may be increased or decreased by 21
reference to the amount realized upon sale or disposition of the property 22
as defined in 26 U.S.C. sec. 7701(h)(1). 23
(b) "Lease or rental" shall not include: 24
1. A transfer of possession or control of property under a security 25
agreement or deferred payment plan that requires the transfer of title 26
upon completion of the required payments; 27 UNOFFICIAL COPY 24 RS BR 800
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2. A transfer of possession or control of property under an agreement that 1
requires the transfer of title upon completion of the required payments 2
and payment of an option price that does not exceed the greater of one 3
hundred dollars ($100) or one percent (1%) of the total required 4
payments; or 5
3. Providing tangible personal property and an operator for the tangible 6
personal property for a fixed or indeterminate period of time. To qualify 7
for this exclusion, the operator must be necessary for the equipment to 8
perform as designed, and the operator must do more than maintain, 9
inspect, or setup the tangible personal property. 10
(c) This definition shall apply regardless of the classification of a transaction 11
under generally accepted accounting principles, the Internal Revenue Code, or 12
other provisions of federal, state, or local law; 13
(21) (a) "Lobbying services" means the act of promoting or securing passage of 14
legislation or an attempt to influence or sway a public official or other public 15
servant toward a desired action, including but not limited to the support of or 16
opposition to a project or the passage, amendment, defeat, approval, or veto of 17
any legislation, regulation, rule, or ordinance; 18
(b) "Lobbying services" includes but is not limited to the performance of 19
activities described as executive agency lobbying activities as defined in KRS 20
11A.201, activities described under the definition of lobby in KRS 6.611, and 21
any similar activities performed at the local, state, or federal levels; 22
(22) (a) "Machinery for new and expanded industry" means machinery: 23
1. Directly used in the manufacturing or industrial processing process of: 24
a. Tangible personal property at a plant facility; 25
b. Distilled spirits or wine at a plant facility or on the premises of a 26
distiller, rectifier, winery, or small farm winery licensed under 27 UNOFFICIAL COPY 24 RS BR 800
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KRS 243.030 that includes a retail establishment on the premises; 1
or 2
c. Malt beverages at a plant facility or on the premises of a brewer or 3
microbrewery licensed under KRS 243.040 that includes a retail 4
establishment; 5
2. Which is incorporated for the first time into: 6
a. A plant facility established in this state; or 7
b. Licensed premises located in this state; and 8
3. Which does not replace machinery in the plant facility or licensed 9
premises unless that machinery purchased to replace existing machinery: 10
a. Increases the consumption of recycled materials at the plant 11
facility by not less than ten percent (10%); 12
b. Performs different functions; 13
c. Is used to manufacture a different product; or 14
d. Has a greater productive capacity, as measured in units of 15
production, than the machinery being replaced. 16
(b) "Machinery for new and expanded industry" does not include repair, 17
replacement, or spare parts of any kind, regardless of whether the purchase of 18
repair, replacement, or spare parts is required by the manufacturer or seller as 19
a condition of sale or as a condition of warranty; 20
(23) "Manufacturing" means any process through which material having little or no 21
commercial value for its intended use before processing has appreciable 22
commercial value for its intended use after processing by the machinery; 23
(24) "Marketplace" means any physical or electronic means through which one (1) or 24
more retailers may advertise and sell tangible personal property, digital property, or 25
services, or lease tangible personal property or digital property, such as a catalog, 26
Internet website, or television or radio broadcast, regardless of whether the tangible 27 UNOFFICIAL COPY 24 RS BR 800
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personal property, digital property, or retailer is physically present in this state; 1
(25) (a) "Marketplace provider" means a person, including any affiliate of the person, 2
that facilitates a retail sale by satisfying subparagraphs 1. and 2. of this 3
paragraph as follows: 4
1. The person directly or indirectly: 5
a. Lists, makes available, or advertises tangible personal property, 6
digital property, or services for sale by a marketplace retailer in a 7
marketplace owned, operated, or controlled by the person; 8
b. Facilitates the sale of a marketplace retailer's product through a 9
marketplace by transmitting or otherwise communicating an offer 10
or acceptance of a retail sale of tangible personal property, digital 11
property, or services between a marketplace retailer and a 12
purchaser in a forum including a shop, store, booth, catalog, 13
Internet site, or similar forum; 14
c. Owns, rents, licenses, makes available, or operates any electronic 15
or physical infrastructure or any property, process, method, 16
copyright, trademark, or patent that connects marketplace retailers 17
to purchasers for the purpose of making retail sales of tangible 18
personal property, digital property, or services; 19
d. Provides a marketplace for making retail sales of tangible personal 20
property, digital property, or services, or otherwise facilitates retail 21
sales of tangible personal property, digital property, or services, 22
regardless of ownership or control of the tangible personal 23
property, digital property, or services, that are the subject of the 24
retail sale; 25
e. Provides software development or research and development 26
activities related to any activity described in this subparagraph, if 27 UNOFFICIAL COPY 24 RS BR 800
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the software development or research and development activities 1
are directly related to the physical or electronic marketplace 2
provided by a marketplace provider; 3
f. Provides or offers fulfillment or storage services for a marketplace 4
retailer; 5
g. Sets prices for a marketplace retailer's sale of tangible personal 6
property, digital property, or services; 7
h. Provides or offers customer service to a marketplace retailer or a 8
marketplace retailer's customers, or accepts or assists with taking 9
orders, returns, or exchanges of tangible personal property, digital 10
property, or services sold by a marketplace retailer; or 11
i. Brands or otherwise identifies sales as those of the marketplace 12
provider; and 13
2. The person directly or indirectly: 14
a. Collects the sales price or purchase price of a retail sale of tangible 15
personal property, digital property, or services; 16
b. Provides payment processing services for a retail sale of tangible 17
personal property, digital property, or services; 18
c. Through terms and conditions, agreements, or arrangements with a 19
third party, collects payment in connection with a retail sale of 20
tangible personal property, digital property, or services from a 21
purchaser and transmits that payment to the marketplace retailer, 22
regardless of whether the person collecting and transmitting the 23
payment receives compensation or other consideration in exchange 24
for the service; or 25
d. Provides a virtual currency that purchasers are allowed or required 26
to use to purchase tangible personal property, digital property, or 27 UNOFFICIAL COPY 24 RS BR 800
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services. 1
(b) "Marketplace provider" includes but is not limited to a person that satisfies the 2
requirements of this subsection through the ownership, operation, or control 3
of a digital distribution service, digital distribution platform, online portal, or 4
application store; 5
(26) "Marketplace retailer" means a seller that makes retail sales through any 6
marketplace owned, operated, or controlled by a marketplace provider; 7
(27) "Menstrual discharge collection devices" means tampons, panty liners, 8
menstrual cups, pads, period panties, and other similar tangible personal property 9
designed for use in connection with the human menstrual cycle, but does not 10
include "grooming and hygiene products" as defined in KRS 139.472; 11
(28) (a) "Occasional sale" includes: 12
1. A sale of tangible personal property or digital property not held or used 13
by a seller in the course of an activity for which he or she is required to 14
hold a seller's permit, provided such sale is not one (1) of a series of 15
sales sufficient in number, scope, and character to constitute an activity 16
requiring the holding of a seller's permit. In the case of the sale of the 17
entire, or a substantial portion of the nonretail assets of the seller, the 18
number of previous sales of similar assets shall be disregarded in 19
determining whether or not the current sale or sales shall qualify as an 20
occasional sale; or 21
2. Any transfer of all or substantially all the tangible personal property or 22
digital property held or used by a person in the course of such an activity 23
when after such transfer the real or ultimate ownership of such property 24
is substantially similar to that which existed before such transfer. 25
(b) For the purposes of this subsection, stockholders, bondholders, partners, or 26
other persons holding an interest in a corporation or other entity are regarded 27 UNOFFICIAL COPY 24 RS BR 800
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as having the "real or ultimate ownership" of the tangible personal property or 1
digital property of such corporation or other entity; 2
(29)[(28)] (a) "Other direct mail" means any direct mail that is not advertising and 3
promotional direct mail, regardless of whether advertising and promotional 4
direct mail is included in the same mailing. 5
(b) "Other direct mail" includes but is not limited to: 6
1. Transactional direct mail that contains personal information specific to 7
the addressee, including but not limited to invoices, bills, statements of 8
account, and payroll advices; 9
2. Any legally required mailings, including but not limited to privacy 10
notices, tax reports, and stockholder reports; and 11
3. Other nonpromotional direct mail delivered to existing or former 12
shareholders, customers, employees, or agents, including but not limited 13
to newsletters and informational pieces. 14
(c) "Other direct mail" does not include the development of billing information or 15
the provision of any data processing service that is more than incidental to the 16
production of printed material; 17
(30)[(29)] "Person" includes any individual, firm, copartnership, joint venture, 18
association, social club, fraternal organization, corporation, estate, trust, business 19
trust, receiver, trustee, syndicate, cooperative, assignee, governmental unit or 20
agency, or any other group or combination acting as a unit; 21
(31)[(30)] "Permanent," as the term applies to digital property, means perpetual or for an 22
indefinite or unspecified length of time; 23
(32)[(31)] (a) "Photography and photofinishing services" means: 24
1. The taking, developing, or printing of an original photograph; or 25
2. Image editing, including shadow removal, tone adjustments, vertical and 26
horizontal alignment and cropping, composite image creation, 27 UNOFFICIAL COPY 24 RS BR 800
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formatting, watermarking printing, and delivery of an original 1
photograph in the form of tangible personal property, digital property, or 2
other media. 3
(b) "Photography and photofinishing services" does not include photography 4
services necessary for medical or dental health; 5
(33)[(32)] "Plant facility" means a single location that is exclusively dedicated to 6
manufacturing or industrial processing activities. A location shall be deemed to be 7
exclusively dedicated to manufacturing or industrial processing activities even if 8
retail sales are made there, provided that the retail sales are incidental to the 9
manufacturing or industrial processing activities occurring at the location. The term 10
"plant facility" shall not include any restaurant, grocery store, shopping center, or 11
other retail establishment; 12
(34)[(33)] (a) "Prewritten computer software" means: 13
1. Computer software, including prewritten upgrades, that are not designed 14
and developed by the author or other creator to the specifications of a 15
specific purchaser; 16
2. Software designed and developed by the author or other creator to the 17
specifications of a specific purchaser when it is sold to a person other 18
than the original purchaser; or 19
3. Any portion of prewritten computer software that is modified or 20
enhanced in any manner, where the modification or enhancement is 21
designed and developed to the specifications of a specific purchaser, 22
unless there is a reasonable, separately stated charge on an invoice or 23
other statement of the price to the purchaser for the modification or 24
enhancement. 25
(b) When a person modifies or enhances computer software of which the person 26
is not the author or creator, the person shall be deemed to be the author or 27 UNOFFICIAL COPY 24 RS BR 800
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creator only of the modifications or enhancements the person actually made. 1
(c) The combining of two (2) or more prewritten computer software programs or 2
portions thereof does not cause the combination to be other than prewritten 3
computer software; 4
(35)[(34)] "Prewritten computer software access services" means the right of access to 5
prewritten computer software where the object of the transaction is to use the 6
prewritten computer software while possession of the prewritten computer software 7
is maintained by the seller or a third party, wherever located, regardless of whether 8
the charge for the access or use is on a per use, per user, per license, subscription, or 9
some other basis; 10
(36)[(35)] (a) "Purchase" means any transfer of title or possession, exchange, barter, 11
lease, or rental, conditional or otherwise, in any manner or by any means 12
whatsoever, of: 13
1. Tangible personal property; 14
2. An extended warranty service; 15
3. Digital property transferred electronically; or 16
4. Services included in KRS 139.200; 17
for a consideration. 18
(b) "Purchase" includes: 19
1. When performed outside this state or when the customer gives a resale 20
certificate, the producing, fabricating, processing, printing, or imprinting 21
of tangible personal property for a consideration for consumers who 22
furnish either directly or indirectly the materials used in the producing, 23
fabricating, processing, printing, or imprinting; 24
2. A transaction whereby the possession of tangible personal property or 25
digital property is transferred but the seller retains the title as security 26
for the payment of the price; and 27 UNOFFICIAL COPY 24 RS BR 800
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3. A transfer for a consideration of the title or possession of tangible 1
personal property or digital property which has been produced, 2
fabricated, or printed to the special order of the customer, or of any 3
publication; 4
(37)[(36)] "Recycled materials" means materials which have been recovered or diverted 5
from the solid waste stream and reused or returned to use in the form of raw 6
materials or products; 7
(38)[(37)] "Recycling purposes" means those activities undertaken in which materials 8
that would otherwise become solid waste are collected, separated, or processed in 9
order to be reused or returned to use in the form of raw materials or products; 10
(39)[(38)] "Remote retailer" means a retailer with no physical presence in this state; 11
(40)[(39)] (a) "Repair, replacement, or spare parts" means any tangible personal 12
property used to maintain, restore, mend, or repair machinery or equipment. 13
(b) "Repair, replacement, or spare parts" does not include machine oils, grease, or 14
industrial tools; 15
(41)[(40)] (a) "Retailer" means: 16
1. Every person engaged in the business of making retail sales of tangible 17
personal property, digital property, or furnishing any services in a retail 18
sale included in KRS 139.200; 19
2. Every person engaged in the business of making sales at auction of 20
tangible personal property or digital property owned by the person or 21
others for storage, use or other consumption, except as provided in 22
paragraph (c) of this subsection; 23
3. Every person making more than two (2) retail sales of tangible personal 24
property, digital property, or services included in KRS 139.200 during 25
any twelve (12) month period, including sales made in the capacity of 26
assignee for the benefit of creditors, or receiver or trustee in bankruptcy; 27 UNOFFICIAL COPY 24 RS BR 800
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4. Any person conducting a race meeting under the provision of KRS 1
Chapter 230, with respect to horses which are claimed during the 2
meeting. 3
(b) When the department determines that it is necessary for the efficient 4
administration of this chapter to regard any salesmen, representatives, 5
peddlers, or canvassers as the agents of the dealers, distributors, supervisors or 6
employers under whom they operate or from whom they obtain the tangible 7
personal property, digital property, or services sold by them, irrespective of 8
whether they are making sales on their own behalf or on behalf of the dealers, 9
distributors, supervisors or employers, the department may so regard them and 10
may regard the dealers, distributors, supervisors or employers as retailers for 11
purposes of this chapter. 12
(c) 1. Any person making sales at a charitable auction for a qualifying entity 13
shall not be a retailer for purposes of the sales made at the charitable 14
auction if: 15
a. The qualifying entity, not the person making sales at the auction, is 16
sponsoring the auction; 17
b. The purchaser of tangible personal property at the auction directly 18
pays the qualifying entity sponsoring the auction for the property 19
and not the person making the sales at the auction; and 20
c. The qualifying entity, not the person making sales at the auction, is 21
responsible for the collection, control, and disbursement of the 22
auction proceeds. 23
2. If the conditions set forth in subparagraph 1. of this paragraph are met, 24
the qualifying entity sponsoring the auction shall be the retailer for 25
purposes of the sales made at the charitable auction. 26
3. For purposes of this paragraph, "qualifying entity" means a resident: 27 UNOFFICIAL COPY 24 RS BR 800
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a. Church; 1
b. School; 2
c. Civic club; or 3
d. Any other nonprofit charitable, religious, or educational 4
organization; 5
(42)[(41)] "Retail sale" means any sale, lease, or rental for any purpose other than resale, 6
sublease, or subrent; 7
(43)[(42)] (a) "Ringtones" means digitized sound files that are downloaded onto a 8
device and that may be used to alert the customer with respect to a 9
communication. 10
(b) "Ringtones" shall not include ringback tones or other digital files that are not 11
stored on the purchaser's communications device; 12
(44)[(43)] (a) "Sale" means: 13
1. The furnishing of any services included in KRS 139.200; 14
2. Any transfer of title or possession, exchange, barter, lease, or rental, 15
conditional or otherwise, in any manner or by any means whatsoever, 16
of: 17
a. Tangible personal property; or 18
b. Digital property transferred electronically; 19
for a consideration. 20
(b) "Sale" includes but is not limited to: 21
1. The producing, fabricating, processing, printing, or imprinting of 22
tangible personal property or digital property for a consideration for 23
purchasers who furnish, either directly or indirectly, the materials used 24
in the producing, fabricating, processing, printing, or imprinting; 25
2. A transaction whereby the possession of tangible personal property or 26
digital property is transferred, but the seller retains the title as security 27 UNOFFICIAL COPY 24 RS BR 800
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for the payment of the price; and 1
3. A transfer for a consideration of the title or possession of tangible 2
personal property or digital property which has been produced, 3
fabricated, or printed to the special order of the purchaser. 4
(c) This definition shall apply regardless of the classification of a transaction 5
under generally accepted accounting principles, the Internal Revenue Code, or 6
other provisions of federal, state, or local law; 7
(45)[(44)] "Seller" includes every person engaged in the business of selling tangible 8
personal property, digital property, or services of a kind, the gross receipts from the 9
retail sale of which are required to be included in the measure of the sales tax, and 10
every person engaged in making sales for resale; 11
(46)[(45)] (a) "Storage" includes any keeping or retention in this state for any purpose 12
except sale in the regular course of business or subsequent use solely outside 13
this state of tangible personal property, digital property, or prewritten 14
computer software access services purchased from a retailer. 15
(b) "Storage" does not include the keeping, retaining, or exercising any right or 16
power over tangible personal property for the purpose of subsequently 17
transporting it outside the state for use thereafter solely outside the state, or 18
for the purpose of being processed, fabricated, or manufactured into, attached 19
to, or incorporated into, other tangible personal property to be transported 20
outside the state and thereafter used solely outside the state; 21
(47)[(46)] "Tangible personal property" means personal property which may be seen, 22
weighed, measured, felt, or touched, or which is in any other manner perceptible to 23
the senses and includes natural, artificial, and mixed gas, electricity, water, steam, 24
and prewritten computer software; 25
(48)[(47)] "Taxpayer" means any person liable for tax under this chapter; 26
(49)[(48)] "Telemarketing services" means services provided via telephone, facsimile, 27 UNOFFICIAL COPY 24 RS BR 800
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electronic mail, text messages, or other modes of communications to another 1
person, which are unsolicited by that person, for the purposes of: 2
(a) 1. Promoting products or services; 3
2. Taking orders; or 4
3. Providing information or assistance regarding the products or services; 5
or 6
(b) Soliciting contributions; 7
(50)[(49)] "Transferred electronically" means accessed or obtained by the purchaser by 8
means other than tangible storage media; and 9
(51)[(50)] (a) "Use" includes the exercise of: 10
1. Any right or power over tangible personal property or digital property 11
incident to the ownership of that property, or by any transaction in 12
which possession is given, or by any transaction involving digital 13
property or tangible personal property where the right of access is 14
granted; or 15
2. Any right or power to benefit from any services subject to tax under 16
KRS 139.200(2)(p) to (ax). 17
(b) "Use" does not include the keeping, retaining, or exercising any right or 18
power over: 19
1. Tangible personal property or digital property for the purpose of: 20
a. Selling tangible personal property or digital property in the regular 21
course of business; or 22
b. Subsequently transporting tangible personal property outside the 23
state for use thereafter solely outside the state, or for the purpose 24
of being processed, fabricated, or manufactured into, attached to, 25
or incorporated into, other tangible personal property to be 26
transported outside the state and thereafter used solely outside the 27 UNOFFICIAL COPY 24 RS BR 800
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state; or 1
2. Prewritten computer software access services purchased for use outside 2
the state and transferred electronically outside the state for use thereafter 3
solely outside the state. 4
Section 2. KRS 139.480 (Effective until January 1, 2025) is amended to read as 5
follows: 6
Any other provision of this chapter to the contrary notwithstanding, the terms "sale at 7
retail," "retail sale," "use," "storage," and "consumption," as used in this chapter, shall not 8
include the sale, use, storage, or other consumption of: 9
(1) Locomotives or rolling stock, including materials for the construction, repair, or 10
modification thereof, or fuel or supplies for the direct operation of locomotives and 11
trains, used or to be used in interstate commerce; 12
(2) Coal for the manufacture of electricity; 13
(3) (a) All energy or energy-producing fuels used in the course of manufacturing, 14
processing, mining, or refining and any related distribution, transmission, and 15
transportation services for this energy that are billed to the user, to the extent 16
that the cost of the energy or energy-producing fuels used, and related 17
distribution, transmission, and transportation services for this energy that are 18
billed to the user exceed three percent (3%) of the cost of production. 19
(b) Cost of production shall be computed on the basis of a plant facility, which 20
shall include all operations within the continuous, unbroken, integrated 21
manufacturing or industrial processing process that ends with a product 22
packaged and ready for sale. 23
(c) A person who performs a manufacturing or industrial processing activity for a 24
fee and does not take ownership of the tangible personal property that is 25
incorporated into, or becomes the product of, the manufacturing or industrial 26
processing activity is a toller. For periods on or after July 1, 2018, the costs of 27 UNOFFICIAL COPY 24 RS BR 800
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the tangible personal property shall be excluded from the toller's cost of 1
production at a plant facility with tolling operations in place as of July 1, 2
2018. 3
(d) For plant facilities that begin tolling operations after July 1, 2018, the costs of 4
tangible personal property shall be excluded from the toller's cost of 5
production if the toller: 6
1. Maintains a binding contract for periods after July 1, 2018, that governs 7
the terms, conditions, and responsibilities with a separate legal entity, 8
which holds title to the tangible personal property that is incorporated 9
into, or becomes the product of, the manufacturing or industrial 10
processing activity; 11
2. Maintains accounting records that show the expenses it incurs to fulfill 12
the binding contract that include but are not limited to energy or energy-13
producing fuels, materials, labor, procurement, depreciation, 14
maintenance, taxes, administration, and office expenses; 15
3. Maintains separate payroll, bank accounts, tax returns, and other records 16
that demonstrate its independent operations in the performance of its 17
tolling responsibilities; 18
4. Demonstrates one (1) or more substantial business purposes for the 19
tolling operations germane to the overall manufacturing, industrial 20
processing activities, or corporate structure at the plant facility. A 21
business purpose is a purpose other than the reduction of sales tax 22
liability for the purchases of energy and energy-producing fuels; and 23
5. Provides information to the department upon request that documents 24
fulfillment of the requirements in subparagraphs 1. to 4. of this 25
paragraph and gives an overview of its tolling operations with an 26
explanation of how the tolling operations relate and connect with all 27 UNOFFICIAL COPY 24 RS BR 800
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other manufacturing or industrial processing activities occurring at the 1
plant facility; 2
(4) Livestock of a kind the products of which ordinarily constitute food for human 3
consumption, provided the sales are made for breeding or dairy purposes and by or 4
to a person regularly engaged in the business of farming; 5
(5) Poultry for use in breeding or egg production; 6
(6) Farm work stock for use in farming operations; 7
(7) Seeds, the products of which ordinarily constitute food for human consumption or 8
are to be sold in the regular course of business, and commercial fertilizer to be 9
applied on land, the products from which are to be used for food for human 10
consumption or are to be sold in the regular course of business; provided such sales 11
are made to farmers who are regularly engaged in the occupation of tilling and 12
cultivating the soil for the production of crops as a business, or who are regularly 13
engaged in the occupation of raising and feeding livestock or poultry or producing 14
milk for sale; and provided further that tangible personal property so sold is to be 15
used only by those persons designated above who are so purchasing; 16
(8) Insecticides, fungicides, herbicides, rodenticides, and other farm chemicals to be 17
used in the production of crops as a business, or in the raising and feeding of 18
livestock or poultry, the products of which ordinarily constitute food for human 19
consumption; 20
(9) Feed, including pre-mixes and feed additives, for livestock or poultry of a kind the 21
products of which ordinarily constitute food for human consumption; 22
(10) Machinery for new and expanded industry; 23
(11) Farm machinery. As used in this section, the term "farm machinery": 24
(a) Means machinery used exclusively and directly in the occupation of: 25
1. Tilling the soil for the production of crops as a business; 26
2. Raising and feeding livestock or poultry for sale; or 27 UNOFFICIAL COPY 24 RS BR 800
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3. Producing milk for sale; 1
(b) Includes machinery, attachments, and replacements therefor, repair parts, and 2
replacement parts which are used or manufactured for use on, or in the 3
operation of farm machinery and which are necessary to the operation of the 4
machinery, and are customarily so used, including but not limited to combine 5
header wagons, combine header trailers, or any other implements specifically 6
designed and used to move or transport a combine head; and 7
(c) Does not include: 8
1. Automobiles; 9
2. Trucks; 10
3. Trailers, except combine header trailers; or 11
4. Truck-trailer combinations; 12
(12) Tombstones and other memorial grave markers; 13
(13) On-farm facilities used exclusively for grain or soybean storing, drying, processing, 14
or handling. The exemption applies to the equipment, machinery, attachments, 15
repair and replacement parts, and any materials incorporated into the construction, 16
renovation, or repair of the facilities; 17
(14) On-farm facilities used exclusively for raising poultry or livestock. The exemption 18
shall apply to the equipment, machinery, attachments, repair and replacement parts, 19
and any materials incorporated into the construction, renovation, or repair of the 20
facilities. The exemption shall apply but not be limited to vent board equipment, 21
waterer and feeding systems, brooding systems, ventilation systems, alarm systems, 22
and curtain systems. In addition, the exemption shall apply whether or not the seller 23
is under contract to deliver, assemble, and incorporate into real estate the 24
equipment, machinery, attachments, repair and replacement parts, and any materials 25
incorporated into the construction, renovation, or repair of the facilities; 26
(15) Gasoline, special fuels, liquefied petroleum gas, and natural gas used exclusively 27 UNOFFICIAL COPY 24 RS BR 800
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and directly to: 1
(a) Operate farm machinery as defined in subsection (11) of this section; 2
(b) Operate on-farm grain or soybean drying facilities as defined in subsection 3
(13) of this section; 4
(c) Operate on-farm poultry or livestock facilities defined in subsection (14) of 5
this section; 6
(d) Operate on-farm ratite facilities defined in subsection (23) of this section; 7
(e) Operate on-farm llama or alpaca facilities as defined in subsection (25) of this 8
section; or 9
(f) Operate on-farm dairy facilities; 10
(16) Textbooks, including related workbooks and other course materials, purchased for 11
use in a course of study conducted by an institution which qualifies as a nonprofit 12
educational institution under KRS 139.495. The term "course materials" means only 13
those items specifically required of all students for a particular course but shall not 14
include notebooks, paper, pencils, calculators, tape recorders, or similar student 15
aids; 16
(17) Any property which has been certified as an alcohol production facility as defined 17
in KRS 247.910; 18
(18) Aircraft, repair and replacement parts therefor, and supplies, except fuel, for the 19
direct operation of aircraft in interstate commerce and used exclusively for the 20
conveyance of property or passengers for hire. Nominal intrastate use shall not 21
subject the property to the taxes imposed by this chapter; 22
(19) Any property which has been certified as a fluidized bed energy production facility 23
as defined in KRS 211.390; 24
(20) (a) 1. Any property to be incorporated into the construction, rebuilding, 25
modification, or expansion of a blast furnace or any of its components or 26
appurtenant equipment or structures as part of an approved supplemental 27 UNOFFICIAL COPY 24 RS BR 800
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project, as defined by KRS 154.26-010; and 1
2. Materials, supplies, and repair or replacement parts purchased for use in 2
the operation and maintenance of a blast furnace and related carbon 3
steel-making operations as part of an approved supplemental project, as 4
defined by KRS 154.26-010. 5
(b) The exemptions provided in this subsection shall be effective for sales made: 6
1. On and after July 1, 2018; and 7
2. During the term of a supplemental project agreement entered into 8
pursuant to KRS 154.26-090; 9
(21) Beginning on October 1, 1986, food or food products purchased for human 10
consumption with food coupons issued by the United States Department of 11
Agriculture pursuant to the Food Stamp Act of 1977, as amended, and required to 12
be exempted by the Food Security Act of 1985 in order for the Commonwealth to 13
continue participation in the federal food stamp program; 14
(22) Machinery or equipment purchased or leased by a business, industry, or 15
organization in order to collect, source separate, compress, bale, shred, or otherwise 16
handle waste materials if the machinery or equipment is primarily used for 17
recycling purposes; 18
(23) Ratite birds and eggs to be used in an agricultural pursuit for the breeding and 19
production of ratite birds, feathers, hides, breeding stock, eggs, meat, and ratite by-20
products, and the following items used in this agricultural pursuit: 21
(a) Feed and feed additives; 22
(b) Insecticides, fungicides, herbicides, rodenticides, and other farm chemicals; 23
and 24
(c) On-farm facilities, including equipment, machinery, attachments, repair and 25
replacement parts, and any materials incorporated into the construction, 26
renovation, or repair of the facilities. The exemption shall apply to incubation 27 UNOFFICIAL COPY 24 RS BR 800
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systems, egg processing equipment, waterer and feeding systems, brooding 1
systems, ventilation systems, alarm systems, and curtain systems. In addition, 2
the exemption shall apply whether or not the seller is under contract to 3
deliver, assemble, and incorporate into real estate the equipment, machinery, 4
attachments, repair and replacement parts, and any materials incorporated into 5
the construction, renovation, or repair of the facilities; 6
(24) Embryos and semen that are used in the reproduction of livestock, if the products of 7
these embryos and semen ordinarily constitute food for human consumption, and if 8
the sale is made to a person engaged in the business of farming; 9
(25) Llamas and alpacas to be used as beasts of burden or in an agricultural pursuit for 10
the breeding and production of hides, breeding stock, fiber and wool products, 11
meat, and llama and alpaca by-products, and the following items used in this 12
pursuit: 13
(a) Feed and feed additives; 14
(b) Insecticides, fungicides, herbicides, rodenticides, and other farm chemicals; 15
and 16
(c) On-farm facilities, including equipment, machinery, attachments, repair and 17
replacement parts, and any materials incorporated into the construction, 18
renovation, or repair of the facilities. The exemption shall apply to waterer 19
and feeding systems, ventilation systems, and alarm systems. In addition, the 20
exemption shall apply whether or not the seller is under contract to deliver, 21
assemble, and incorporate into real estate the equipment, machinery, 22
attachments, repair and replacement parts, and any materials incorporated into 23
the construction, renovation, or repair of the facilities; 24
(26) Baling twine and baling wire for the baling of hay and straw; 25
(27) Water sold to a person regularly engaged in the business of farming and used in the: 26
(a) Production of crops; 27 UNOFFICIAL COPY 24 RS BR 800
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(b) Production of milk for sale; or 1
(c) Raising and feeding of: 2
1. Livestock or poultry, the products of which ordinarily constitute food 3
for human consumption; or 4
2. Ratites, llamas, alpacas, buffalo, cervids or aquatic organisms; 5
(28) Buffalos to be used as beasts of burden or in an agricultural pursuit for the 6
production of hides, breeding stock, meat, and buffalo by-products, and the 7
following items used in this pursuit: 8
(a) Feed and feed additives; 9
(b) Insecticides, fungicides, herbicides, rodenticides, and other farm chemicals; 10
and 11
(c) On-farm facilities, including equipment, machinery, attachments, repair and 12
replacement parts, and any materials incorporated into the construction, 13
renovation, or repair of the facilities. The exemption shall apply to waterer 14
and feeding systems, ventilation systems, and alarm systems. In addition, the 15
exemption shall apply whether or not the seller is under contract to deliver, 16
assemble, and incorporate into real estate the equipment, machinery, 17
attachments, repair and replacement parts, and any materials incorporated into 18
the construction, renovation, or repair of the facilities; 19
(29) Aquatic organisms sold directly to or raised by a person regularly engaged in the 20
business of producing products of aquaculture, as defined in KRS 260.960, for sale, 21
and the following items used in this pursuit: 22
(a) Feed and feed additives; 23
(b) Water; 24
(c) Insecticides, fungicides, herbicides, rodenticides, and other farm chemicals; 25
and 26
(d) On-farm facilities, including equipment, machinery, attachments, repair and 27 UNOFFICIAL COPY 24 RS BR 800
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replacement parts, and any materials incorporated into the construction, 1
renovation, or repair of the facilities and, any gasoline, special fuels, liquefied 2
petroleum gas, or natural gas used to operate the facilities. The exemption 3
shall apply, but not be limited to: waterer and feeding systems; ventilation, 4
aeration, and heating systems; processing and storage systems; production 5
systems such as ponds, tanks, and raceways; harvest and transport equipment 6
and systems; and alarm systems. In addition, the exemption shall apply 7
whether or not the seller is under contract to deliver, assemble, and 8
incorporate into real estate the equipment, machinery, attachments, repair and 9
replacement parts, and any materials incorporated into the construction, 10
renovation, or repair of the facilities; 11
(30) Members of the genus cervidae permitted by KRS Chapter 150 that are used for the 12
production of hides, breeding stock, meat, and cervid by-products, and the 13
following items used in this pursuit: 14
(a) Feed and feed additives; 15
(b) Insecticides, fungicides, herbicides, rodenticides, and other chemicals; and 16
(c) On-site facilities, including equipment, machinery, attachments, repair and 17
replacement parts, and any materials incorporated into the construction, 18
renovation, or repair of the facilities. In addition, the exemption shall apply 19
whether or not the seller is under contract to deliver, assemble, and 20
incorporate into real estate the equipment, machinery, attachments, repair and 21
replacement parts, and any materials incorporated into the construction, 22
renovation, or repair of the facilities; 23
(31) (a) Repair or replacement parts for the direct operation or maintenance of a motor 24
vehicle, including any towed unit, used exclusively in interstate commerce for 25
the conveyance of property or passengers for hire, provided the motor vehicle 26
is licensed for use on the highway and its declared gross vehicle weight with 27 UNOFFICIAL COPY 24 RS BR 800
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any towed unit is forty-four thousand and one (44,001) pounds or greater. 1
Nominal intrastate use shall not subject the property to the taxes imposed by 2
this chapter; and 3
(b) Repair or replacement parts for the direct operation and maintenance of a 4
motor vehicle operating under a charter bus certificate issued by the 5
Transportation Cabinet under KRS Chapter 281, or under similar authority 6
granted by the United States Department of Transportation. 7
(c) For the purposes of this subsection, "repair or replacement parts" means tires, 8
brakes, engines, transmissions, drive trains, chassis, body parts, and their 9
components. "Repair or replacement parts" shall not include fuel, machine 10
oils, hydraulic fluid, brake fluid, grease, supplies, or accessories not essential 11
to the operation of the motor vehicle itself, except when sold as part of the 12
assembled unit, such as cigarette lighters, radios, lighting fixtures not 13
otherwise required by the manufacturer for operation of the vehicle, or tool or 14
utility boxes; 15
(32) Food donated by a retail food establishment or any other entity regulated under 16
KRS 217.127 to a nonprofit organization for distribution to the needy; 17
(33) Drugs and over-the counter drugs, as defined in KRS 139.472, that are purchased 18
by a person regularly engaged in the business of farming and used in the treatment 19
of cattle, sheep, goats, swine, poultry, ratite birds, llamas, alpacas, buffalo, aquatic 20
organisms, or cervids; 21
(34) (a) Building materials, fixtures, or supplies purchased by a construction 22
contractor if: 23
1. Fulfilled by a construction contract for a sewer or water project with: 24
a. A municipally owned water utility organized under KRS Chapter 25
96; 26
b. A water district or water commission formed or organized under 27 UNOFFICIAL COPY 24 RS BR 800
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KRS Chapter 74; 1
c. A sanitation district established under KRS Chapter 220 or formed 2
pursuant to KRS Chapter 65; 3
d. A nonprofit corporation created under KRS 58.180 to act on behalf 4
of a governmental agency in the acquisition and financing of 5
public projects; 6
e. Regional wastewater commissions formed under KRS Chapter 7
278; 8
f. A municipally owned joint sewer agency formed under KRS 9
Chapter 76; or 10
g. Any other governmental agency; and 11
2. The building materials, fixtures, or supplies: 12
a. Will be permanently incorporated into a structure or improvement 13
to real property, or will be completely consumed, in fulfilling a 14
construction contract for the purpose of furnishing water or sewer 15
services to the general public; and 16
b. Would be exempt if purchased directly by the entities listed in 17
subparagraph 1. of this paragraph. 18
(b) As used in this subsection, "construction contract" means a: 19
1. Lump sum contract; 20
2. Cost plus contract; 21
3. Materials only contract; 22
4. Labor and materials contract; or 23
5. Any other type of contract. 24
(c) The exemption provided in this subsection shall apply without regard to the 25
payment arrangement between the construction contractor, the retailer, and 26
the entities listed in paragraph (a)1. of this subsection or to the place of 27 UNOFFICIAL COPY 24 RS BR 800
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delivery for the building materials, fixtures, or supplies; 1
(35) (a) On or after February 25, 2022, the rental of space for meetings, conventions, 2
short-term business uses, entertainment events, weddings, banquets, parties, 3
and other short-term social events, as referenced in KRS 139.200, if the tax 4
established in KRS 139.200 is paid by the primary lessee to the lessor. 5
(b) For the purpose of this subsection, "primary lessee" means the person who 6
leases the space and who has a contract with the lessor of the space only if: 7
1. The contract between the lessor and the lessee specifies that the lessee 8
may sublease, subrent, or otherwise sell the space; and 9
2. The space is then sublet, subrented, or otherwise sold to exhibitors, 10
vendors, sponsors, or other entities and persons who will use the space 11
associated with the event to be conducted under the primary lease;[ and] 12
(36) Prewritten computer software access services sold to or purchased by a retailer that 13
develops prewritten computer software for print technology and uses and sells 14
prewritten computer software access services for print technology; and 15
(37) Menstrual discharge collection devices sold or purchased. 16
Section 3. KRS 139.480 (Effective January 1, 2025) is amended to read as 17
follows: 18
Any other provision of this chapter to the contrary notwithstanding, the terms "sale at 19
retail," "retail sale," "use," "storage," and "consumption," as used in this chapter, shall not 20
include the sale, use, storage, or other consumption of: 21
(1) Locomotives or rolling stock, including materials for the construction, repair, or 22
modification thereof, or fuel or supplies for the direct operation of locomotives and 23
trains, used or to be used in interstate commerce; 24
(2) Coal for the manufacture of electricity; 25
(3) (a) All energy or energy-producing fuels used in the course of manufacturing, 26
processing, mining, or refining and any related distribution, transmission, and 27 UNOFFICIAL COPY 24 RS BR 800
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transportation services for this energy that are billed to the user, to the extent 1
that the cost of the energy or energy-producing fuels used, and related 2
distribution, transmission, and transportation services for this energy that are 3
billed to the user exceed three percent (3%) of the cost of production. 4
(b) Cost of production shall be computed on the basis of a plant facility, which 5
shall include all operations within the continuous, unbroken, integrated 6
manufacturing or industrial processing process that ends with a product 7
packaged and ready for sale. 8
(c) A person who performs a manufacturing or industrial processing activity for a 9
fee and does not take ownership of the tangible personal property that is 10
incorporated into, or becomes the product of, the manufacturing or industrial 11
processing activity is a toller. For periods on or after July 1, 2018, the costs of 12
the tangible personal property shall be excluded from the toller's cost of 13
production at a plant facility with tolling operations in place as of July 1, 14
2018. 15
(d) For plant facilities that begin tolling operations after July 1, 2018, the costs of 16
tangible personal property shall be excluded from the toller's cost of 17
production if the toller: 18
1. Maintains a binding contract for periods after July 1, 2018, that governs 19
the terms, conditions, and responsibilities with a separate legal entity, 20
which holds title to the tangible personal property that is incorporated 21
into, or becomes the product of, the manufacturing or industrial 22
processing activity; 23
2. Maintains accounting records that show the expenses it incurs to fulfill 24
the binding contract that include but are not limited to energy or energy-25
producing fuels, materials, labor, procurement, depreciation, 26
maintenance, taxes, administration, and office expenses; 27 UNOFFICIAL COPY 24 RS BR 800
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3. Maintains separate payroll, bank accounts, tax returns, and other records 1
that demonstrate its independent operations in the performance of its 2
tolling responsibilities; 3
4. Demonstrates one (1) or more substantial business purposes for the 4
tolling operations germane to the overall manufacturing, industrial 5
processing activities, or corporate structure at the plant facility. A 6
business purpose is a purpose other than the reduction of sales tax 7
liability for the purchases of energy and energy-producing fuels; and 8
5. Provides information to the department upon request that documents 9
fulfillment of the requirements in subparagraphs 1. to 4. of this 10
paragraph and gives an overview of its tolling operations with an 11
explanation of how the tolling operations relate and connect with all 12
other manufacturing or industrial processing activities occurring at the 13
plant facility; 14
(4) Livestock of a kind the products of which ordinarily constitute food for human 15
consumption, provided the sales are made for breeding or dairy purposes and by or 16
to a person regularly engaged in the business of farming; 17
(5) Poultry for use in breeding or egg production; 18
(6) Farm work stock for use in farming operations; 19
(7) Seeds, the products of which ordinarily constitute food for human consumption or 20
are to be sold in the regular course of business, and commercial fertilizer to be 21
applied on land, the products from which are to be used for food for human 22
consumption or are to be sold in the regular course of business; provided such sales 23
are made to farmers who are regularly engaged in the occupation of tilling and 24
cultivating the soil for the production of crops as a business, or who are regularly 25
engaged in the occupation of raising and feeding livestock or poultry or producing 26
milk for sale; and provided further that tangible personal property so sold is to be 27 UNOFFICIAL COPY 24 RS BR 800
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used only by those persons designated above who are so purchasing; 1
(8) Insecticides, fungicides, herbicides, rodenticides, and other farm chemicals to be 2
used in the production of crops as a business, or in the raising and feeding of 3
livestock or poultry, the products of which ordinarily constitute food for human 4
consumption; 5
(9) Feed, including pre-mixes and feed additives, for livestock or poultry of a kind the 6
products of which ordinarily constitute food for human consumption; 7
(10) Machinery for new and expanded industry; 8
(11) Farm machinery. As used in this section, the term "farm machinery": 9
(a) Means machinery used exclusively and directly in the occupation of: 10
1. Tilling the soil for the production of crops as a business; 11
2. Raising and feeding livestock or poultry for sale; or 12
3. Producing milk for sale; 13
(b) Includes machinery, attachments, and replacements therefor, repair parts, and 14
replacement parts which are used or manufactured for use on, or in the 15
operation of farm machinery and which are necessary to the operation of the 16
machinery, and are customarily so used, including but not limited to combine 17
header wagons, combine header trailers, or any other implements specifically 18
designed and used to move or transport a combine head; and 19
(c) Does not include: 20
1. Automobiles; 21
2. Trucks; 22
3. Trailers, except combine header trailers; or 23
4. Truck-trailer combinations; 24
(12) Tombstones and other memorial grave markers; 25
(13) On-farm facilities used exclusively for grain or soybean storing, drying, processing, 26
or handling. The exemption applies to the equipment, machinery, attachments, 27 UNOFFICIAL COPY 24 RS BR 800
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repair and replacement parts, and any materials incorporated into the construction, 1
renovation, or repair of the facilities; 2
(14) On-farm facilities used exclusively for raising poultry or livestock. The exemption 3
shall apply to the equipment, machinery, attachments, repair and replacement parts, 4
and any materials incorporated into the construction, renovation, or repair of the 5
facilities. The exemption shall apply but not be limited to vent board equipment, 6
waterer and feeding systems, brooding systems, ventilation systems, alarm systems, 7
and curtain systems. In addition, the exemption shall apply whether or not the seller 8
is under contract to deliver, assemble, and incorporate into real estate the 9
equipment, machinery, attachments, repair and replacement parts, and any materials 10
incorporated into the construction, renovation, or repair of the facilities; 11
(15) Gasoline, special fuels, liquefied petroleum gas, and natural gas used exclusively 12
and directly to: 13
(a) Operate farm machinery as defined in subsection (11) of this section; 14
(b) Operate on-farm grain or soybean drying facilities as defined in subsection 15
(13) of this section; 16
(c) Operate on-farm poultry or livestock facilities defined in subsection (14) of 17
this section; 18
(d) Operate on-farm ratite facilities defined in subsection (23) of this section; 19
(e) Operate on-farm llama or alpaca facilities as defined in subsection (25) of this 20
section; or 21
(f) Operate on-farm dairy facilities; 22
(16) Textbooks, including related workbooks and other course materials, purchased for 23
use in a course of study conducted by an institution which qualifies as a nonprofit 24
educational institution under KRS 139.495. The term "course materials" means only 25
those items specifically required of all students for a particular course but shall not 26
include notebooks, paper, pencils, calculators, tape recorders, or similar student 27 UNOFFICIAL COPY 24 RS BR 800
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aids; 1
(17) Any property which has been certified as an alcohol production facility as defined 2
in KRS 247.910; 3
(18) Aircraft, repair and replacement parts therefor, and supplies, except fuel, for the 4
direct operation of aircraft in interstate commerce and used exclusively for the 5
conveyance of property or passengers for hire. Nominal intrastate use shall not 6
subject the property to the taxes imposed by this chapter; 7
(19) Any property which has been certified as a fluidized bed energy production facility 8
as defined in KRS 211.390; 9
(20) (a) 1. Any property to be incorporated into the construction, rebuilding, 10
modification, or expansion of a blast furnace or any of its components or 11
appurtenant equipment or structures as part of an approved supplemental 12
project, as defined by KRS 154.26-010; and 13
2. Materials, supplies, and repair or replacement parts purchased for use in 14
the operation and maintenance of a blast furnace and related carbon 15
steel-making operations as part of an approved supplemental project, as 16
defined by KRS 154.26-010. 17
(b) The exemptions provided in this subsection shall be effective for sales made: 18
1. On and after July 1, 2018; and 19
2. During the term of a supplemental project agreement entered into 20
pursuant to KRS 154.26-090; 21
(21) Beginning on October 1, 1986, food or food products purchased for human 22
consumption with food coupons issued by the United States Department of 23
Agriculture pursuant to the Food Stamp Act of 1977, as amended, and required to 24
be exempted by the Food Security Act of 1985 in order for the Commonwealth to 25
continue participation in the federal food stamp program; 26
(22) Machinery or equipment purchased or leased by a business, industry, or 27 UNOFFICIAL COPY 24 RS BR 800
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organization in order to collect, source separate, compress, bale, shred, or otherwise 1
handle waste materials if the machinery or equipment is primarily used for 2
recycling purposes; 3
(23) Ratite birds and eggs to be used in an agricultural pursuit for the breeding and 4
production of ratite birds, feathers, hides, breeding stock, eggs, meat, and ratite by-5
products, and the following items used in this agricultural pursuit: 6
(a) Feed and feed additives; 7
(b) Insecticides, fungicides, herbicides, rodenticides, and other farm chemicals; 8
and 9
(c) On-farm facilities, including equipment, machinery, attachments, repair and 10
replacement parts, and any materials incorporated into the construction, 11
renovation, or repair of the facilities. The exemption shall apply to incubation 12
systems, egg processing equipment, waterer and feeding systems, brooding 13
systems, ventilation systems, alarm systems, and curtain systems. In addition, 14
the exemption shall apply whether or not the seller is under contract to 15
deliver, assemble, and incorporate into real estate the equipment, machinery, 16
attachments, repair and replacement parts, and any materials incorporated into 17
the construction, renovation, or repair of the facilities; 18
(24) Embryos and semen that are used in the reproduction of livestock, if the products of 19
these embryos and semen ordinarily constitute food for human consumption, and if 20
the sale is made to a person engaged in the business of farming; 21
(25) Llamas and alpacas to be used as beasts of burden or in an agricultural pursuit for 22
the breeding and production of hides, breeding stock, fiber and wool products, 23
meat, and llama and alpaca by-products, and the following items used in this 24
pursuit: 25
(a) Feed and feed additives; 26
(b) Insecticides, fungicides, herbicides, rodenticides, and other farm chemicals; 27 UNOFFICIAL COPY 24 RS BR 800
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and 1
(c) On-farm facilities, including equipment, machinery, attachments, repair and 2
replacement parts, and any materials incorporated into the construction, 3
renovation, or repair of the facilities. The exemption shall apply to waterer 4
and feeding systems, ventilation systems, and alarm systems. In addition, the 5
exemption shall apply whether or not the seller is under contract to deliver, 6
assemble, and incorporate into real estate the equipment, machinery, 7
attachments, repair and replacement parts, and any materials incorporated into 8
the construction, renovation, or repair of the facilities; 9
(26) Baling twine and baling wire for the baling of hay and straw; 10
(27) Water sold to a person regularly engaged in the business of farming and used in the: 11
(a) Production of crops; 12
(b) Production of milk for sale; or 13
(c) Raising and feeding of: 14
1. Livestock or poultry, the products of which ordinarily constitute food 15
for human consumption; or 16
2. Ratites, llamas, alpacas, buffalo, cervids or aquatic organisms; 17
(28) Buffalos to be used as beasts of burden or in an agricultural pursuit for the 18
production of hides, breeding stock, meat, and buffalo by-products, and the 19
following items used in this pursuit: 20
(a) Feed and feed additives; 21
(b) Insecticides, fungicides, herbicides, rodenticides, and other farm chemicals; 22
and 23
(c) On-farm facilities, including equipment, machinery, attachments, repair and 24
replacement parts, and any materials incorporated into the construction, 25
renovation, or repair of the facilities. The exemption shall apply to waterer 26
and feeding systems, ventilation systems, and alarm systems. In addition, the 27 UNOFFICIAL COPY 24 RS BR 800
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exemption shall apply whether or not the seller is under contract to deliver, 1
assemble, and incorporate into real estate the equipment, machinery, 2
attachments, repair and replacement parts, and any materials incorporated into 3
the construction, renovation, or repair of the facilities; 4
(29) Aquatic organisms sold directly to or raised by a person regularly engaged in the 5
business of producing products of aquaculture, as defined in KRS 260.960, for sale, 6
and the following items used in this pursuit: 7
(a) Feed and feed additives; 8
(b) Water; 9
(c) Insecticides, fungicides, herbicides, rodenticides, and other farm chemicals; 10
and 11
(d) On-farm facilities, including equipment, machinery, attachments, repair and 12
replacement parts, and any materials incorporated into the construction, 13
renovation, or repair of the facilities and, any gasoline, special fuels, liquefied 14
petroleum gas, or natural gas used to operate the facilities. The exemption 15
shall apply, but not be limited to: waterer and feeding systems; ventilation, 16
aeration, and heating systems; processing and storage systems; production 17
systems such as ponds, tanks, and raceways; harvest and transport equipment 18
and systems; and alarm systems. In addition, the exemption shall apply 19
whether or not the seller is under contract to deliver, assemble, and 20
incorporate into real estate the equipment, machinery, attachments, repair and 21
replacement parts, and any materials incorporated into the construction, 22
renovation, or repair of the facilities; 23
(30) Members of the genus cervidae permitted by KRS Chapter 150 that are used for the 24
production of hides, breeding stock, meat, and cervid by-products, and the 25
following items used in this pursuit: 26
(a) Feed and feed additives; 27 UNOFFICIAL COPY 24 RS BR 800
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(b) Insecticides, fungicides, herbicides, rodenticides, and other chemicals; and 1
(c) On-site facilities, including equipment, machinery, attachments, repair and 2
replacement parts, and any materials incorporated into the construction, 3
renovation, or repair of the facilities. In addition, the exemption shall apply 4
whether or not the seller is under contract to deliver, assemble, and 5
incorporate into real estate the equipment, machinery, attachments, repair and 6
replacement parts, and any materials incorporated into the construction, 7
renovation, or repair of the facilities; 8
(31) (a) Repair or replacement parts for the direct operation or maintenance of a motor 9
vehicle, including any towed unit, used exclusively in interstate commerce for 10
the conveyance of property or passengers for hire, provided the motor vehicle 11
is licensed for use on the highway and its declared gross vehicle weight with 12
any towed unit is forty-four thousand and one (44,001) pounds or greater. 13
Nominal intrastate use shall not subject the property to the taxes imposed by 14
this chapter; and 15
(b) Repair or replacement parts for the direct operation and maintenance of a 16
motor vehicle operating under a charter bus certificate issued by the 17
Transportation Cabinet under KRS Chapter 281, or under similar authority 18
granted by the United States Department of Transportation. 19
(c) For the purposes of this subsection, "repair or replacement parts" means tires, 20
brakes, engines, transmissions, drive trains, chassis, body parts, and their 21
components. "Repair or replacement parts" shall not include fuel, machine 22
oils, hydraulic fluid, brake fluid, grease, supplies, or accessories not essential 23
to the operation of the motor vehicle itself, except when sold as part of the 24
assembled unit, such as cigarette lighters, radios, lighting fixtures not 25
otherwise required by the manufacturer for operation of the vehicle, or tool or 26
utility boxes; 27 UNOFFICIAL COPY 24 RS BR 800
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(32) Food donated by a retail food establishment or any other entity regulated under 1
KRS 217.127 to a nonprofit organization for distribution to the needy; 2
(33) Drugs and over-the counter drugs, as defined in KRS 139.472, that are purchased 3
by a person regularly engaged in the business of farming and used in the treatment 4
of cattle, sheep, goats, swine, poultry, ratite birds, llamas, alpacas, buffalo, aquatic 5
organisms, or cervids; 6
(34) (a) Building materials, fixtures, or supplies purchased by a construction 7
contractor if: 8
1. Fulfilled by a construction contract for a sewer or water project with: 9
a. A municipally owned water utility organized under KRS Chapter 10
96; 11
b. A water district or water commission formed or organized under 12
KRS Chapter 74; 13
c. A sanitation district established under KRS Chapter 220 or formed 14
pursuant to KRS Chapter 65; 15
d. A nonprofit corporation created under KRS 58.180 to act on behalf 16
of a governmental agency in the acquisition and financing of 17
public projects; 18
e. Regional wastewater commissions formed under KRS Chapter 19
278; 20
f. A municipally owned joint sewer agency formed under KRS 21
Chapter 76; or 22
g. Any other governmental agency; and 23
2. The building materials, fixtures, or supplies: 24
a. Will be permanently incorporated into a structure or improvement 25
to real property, or will be completely consumed, in fulfilling a 26
construction contract for the purpose of furnishing water or sewer 27 UNOFFICIAL COPY 24 RS BR 800
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services to the general public; and 1
b. Would be exempt if purchased directly by the entities listed in 2
subparagraph 1. of this paragraph. 3
(b) As used in this subsection, "construction contract" means a: 4
1. Lump sum contract; 5
2. Cost plus contract; 6
3. Materials only contract; 7
4. Labor and materials contract; or 8
5. Any other type of contract. 9
(c) The exemption provided in this subsection shall apply without regard to the 10
payment arrangement between the construction contractor, the retailer, and 11
the entities listed in paragraph (a)1. of this subsection or to the place of 12
delivery for the building materials, fixtures, or supplies; 13
(35) (a) On or after February 25, 2022, the rental of space for meetings, conventions, 14
short-term business uses, entertainment events, weddings, banquets, parties, 15
and other short-term social events, as referenced in KRS 139.200, if the tax 16
established in KRS 139.200 is paid by the primary lessee to the lessor. 17
(b) For the purpose of this subsection, "primary lessee" means the person who 18
leases the space and who has a contract with the lessor of the space only if: 19
1. The contract between the lessor and the lessee specifies that the lessee 20
may sublease, subrent, or otherwise sell the space; and 21
2. The space is then sublet, subrented, or otherwise sold to exhibitors, 22
vendors, sponsors, or other entities and persons who will use the space 23
associated with the event to be conducted under the primary lease; 24
(36) Prewritten computer software access services sold to or purchased by a retailer that 25
develops prewritten computer software for print technology and uses and sells 26
prewritten computer software access services for print technology; [and] 27 UNOFFICIAL COPY 24 RS BR 800
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(37) Menstrual discharge collection devices sold or purchased; and 1
(38)[(37)] Medicinal cannabis as defined in KRS 218B.010 when sold, used, stored, or 2
consumed in accordance with KRS Chapter 218B. 3
Section 4. This Act takes effect on August 1, 2024. 4