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AN ACT relating to sales and use tax exemptions for firearm-related items. 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 25 RS BR 1036
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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) (a) "Ammunition" means the material fired from any firearm. 4
(b) "Ammunition" includes but is not limited to: 5
1. Any complete round, shell, or cartridge; 6
2. Round, shell, or cartridge components; 7
3. Bullets; 8
4. Caps; 9
5. Cartridge cases; 10
6. Primers; 11
7. Projectiles; and 12
8. Propellant powders, including grades of black powder suitable 13
primarily for use in firearms; 14
(4) (a) "Antique firearm" means: 15
1. Any firearm manufactured in or before 1898; or 16
2. Any replica of a firearm described in paragraph (a) of this subsection 17
if the replica: 18
a. Is not designed or redesigned for using rimfire or conventional 19
centerfire fixed ammunition, or 20
b. Uses rimfire or conventional centerfire fixed ammunition which 21
is no longer manufactured in the United States and which is not 22
readily available in the ordinary channels of commercial trade; 23
or 24
3. Any muzzle loading rifle, muzzle loading shotgun, or muzzle loading 25
pistol, which is designed to use black powder, or a black powder 26
substitute, and which cannot use fixed ammunition. 27 UNOFFICIAL COPY 25 RS BR 1036
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(b) "Antique firearm" does not include any weapon which incorporates a 1
firearm frame or receiver, any firearm which is converted into a muzzle 2
loading weapon, or any muzzle loading weapon which can be readily 3
converted to fire fixed ammunition by replacing the barrel, bolt, 4
breechblock, or any combination thereof; 5
(5) "Body armor" means any product offered as personal protective body covering 6
intended to protect against gunfire, regardless of whether the product is to be 7
worn alone or is sold as a complement to another product or garment; 8
(6) "Business" includes any activity engaged in by any person or caused to be engaged 9
in by that person with the object of gain, benefit, or advantage, either direct or 10
indirect; 11
(7)[(4)] "Commonwealth" means the Commonwealth of Kentucky; 12
(8)[(5)] (a) "Cosmetic surgery services" means modifications to all areas of the 13
head, neck, and body to enhance appearance through surgical and medical 14
techniques. 15
(b) "Cosmetic surgery services" does not include surgery services that are 16
medically necessary to reconstruct or correct dysfunctional areas of the face 17
and body due to birth disorders, trauma, burns, or disease; 18
(9)[(6)] "Department" means the Department of Revenue; 19
(10)[(7)] (a) "Digital audio-visual works" means a series of related images which, 20
when shown in succession, impart an impression of motion, with 21
accompanying sounds, if any. 22
(b) "Digital audio-visual works" includes movies, motion pictures, musical 23
videos, news and entertainment programs, and live events. 24
(c) "Digital audio-visual works" shall not include video greeting cards, video 25
games, and electronic games; 26
(11)[(8)] (a) "Digital audio works" means works that result from the fixation of a 27 UNOFFICIAL COPY 25 RS BR 1036
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series of musical, spoken, or other sounds. 1
(b) "Digital audio works" includes ringtones, recorded or live songs, music, 2
readings of books or other written materials, speeches, or other sound 3
recordings. 4
(c) "Digital audio works" shall not include audio greeting cards sent by electronic 5
mail; 6
(12)[(9)] (a) "Digital books" means works that are generally recognized in the 7
ordinary and usual sense as books, including any literary work expressed in 8
words, numbers, or other verbal or numerical symbols or indicia if the literary 9
work is generally recognized in the ordinary or usual sense as a book. 10
(b) "Digital books" shall not include digital audio-visual works, digital audio 11
works, periodicals, magazines, newspapers, or other news or information 12
products, chat rooms, or weblogs; 13
(13)[(10)] (a) "Digital code" means a code which provides a purchaser with a right to 14
obtain one (1) or more types of digital property. A "digital code" may be 15
obtained by any means, including electronic mail messaging or by tangible 16
means, regardless of the code's designation as a song code, video code, or 17
book code. 18
(b) "Digital code" shall not include a code that represents: 19
1. A stored monetary value that is deducted from a total as it is used by the 20
purchaser; or 21
2. A redeemable card, gift card, or gift certificate that entitles the holder to 22
select specific types of digital property; 23
(14)[(11)] (a) "Digital property" means any of the following which is transferred 24
electronically: 25
1. Digital audio works; 26
2. Digital books; 27 UNOFFICIAL COPY 25 RS BR 1036
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3. Finished artwork; 1
4. Digital photographs; 2
5. Periodicals; 3
6. Newspapers; 4
7. Magazines; 5
8. Video greeting cards; 6
9. Audio greeting cards; 7
10. Video games; 8
11. Electronic games; or 9
12. Any digital code related to this property. 10
(b) "Digital property" shall not include digital audio-visual works or satellite 11
radio programming; 12
(15)[(12)] (a) "Direct mail" means printed material delivered or distributed by United 13
States mail or other delivery service to a mass audience or to addressees on a 14
mailing list provided by the purchaser or at the direction of the purchaser 15
when the cost of the items are not billed directly to the recipient. 16
(b) "Direct mail" includes tangible personal property supplied directly or 17
indirectly by the purchaser to the direct mail retailer for inclusion in the 18
package containing the printed material. 19
(c) "Direct mail" does not include multiple items of printed material delivered to 20
a single address; 21
(16)[(13)] "Directly used in the manufacturing or industrial processing process" means 22
the process that commences with the movement of raw materials from storage into 23
a continuous, unbroken, integrated process and ends when the finished product is 24
packaged and ready for sale; 25
(17)[(14)] (a) "Executive employee recruitment services" means services provided by 26
a person to locate potential candidates to fill open senior-level management 27 UNOFFICIAL COPY 25 RS BR 1036
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positions. 1
(b) "Executive employee recruitment services" includes but is not limited to 2
making a detailed list of client requirements, researching and identifying 3
potential candidates, performing prescreening interviews, and providing 4
contract and salary negotiations; 5
(18)[(15)] (a) "Extended warranty services" means services provided through a service 6
contract agreement between the contract provider and the purchaser where the 7
purchaser agrees to pay compensation for the contract and the provider agrees 8
to repair, replace, support, or maintain tangible personal property, digital 9
property, real property, or prewritten computer software access services 10
according to the terms of the contract. 11
(b) "Extended warranty services" does not include the sale of a service contract 12
agreement for tangible personal property to be used by a small telephone 13
utility as defined in KRS 278.516 or a Tier III CMRS provider as defined in 14
KRS 65.7621 to deliver communications services as defined in KRS 136.602 15
or broadband; 16
(19)[(16)] (a) "Finished artwork" means final art that is used for actual reproduction 17
by photomechanical or other processes or for display purposes. 18
(b) "Finished artwork" includes: 19
1. Assemblies; 20
2. Charts; 21
3. Designs; 22
4. Drawings; 23
5. Graphs; 24
6. Illustrative materials; 25
7. Lettering; 26
8. Mechanicals; 27 UNOFFICIAL COPY 25 RS BR 1036
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9. Paintings; and 1
10. Paste-ups; 2
(20) "Firearm" means: 3
(a) Any weapon, including a starter gun, which will or is designed to or may 4
readily be converted to expel a projectile by the action of an explosive; 5
(b) The frame or receiver of any weapon; 6
(c) Any firearm muffler or silencer; or 7
(d) Any part or combination of parts intended for use in its assembly or 8
fabrication; 9
(21) "Firearm muffler or silencer" means: 10
(a) Any device for silencing, muffling, or diminishing the report of a portable 11
firearm; or 12
(b) Any part or combination of parts intended for use in its assembly or 13
fabrication; 14
(22) "Firearm-related accessory" means any item which: 15
(a) Directly touches the firearm and is used to clean, enhance, carry, or store 16
the firearm; 17
(b) Directly touches the ammunition of a firearm and is used to assemble, 18
enhance, fabricate, carry, or store the ammunition; or 19
(c) Is primarily intended and marketed to protect a person or property from 20
being harmed by a firearm or its projectile; 21
(23) "Firearm safety course" means an educational safety course offered to the 22
general public that: 23
(a) Teaches participants the requisite basic knowledge and practical skills 24
relating to the safe handling, carrying, and storage of firearms; 25
(b) Teaches the basic applicable legal standards for self-defense under 26
Kentucky law and the possible civil and criminal penalties for failure to 27 UNOFFICIAL COPY 25 RS BR 1036
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abide by the current legal standards for self-defense under Kentucky law; 1
(c) Is taught by a trainer or instructor who is certified by the Kentucky 2
Department of Criminal Justice Training; and 3
(d) Is offered to members of the general public and not related to professional 4
development or licensure requirements; 5
(24) "Firearm safety device" means a device to be equipped or installed on a firearm 6
designed to prevent unauthorized access to the firearm or to prevent it from being 7
operated without first deactivating the device; 8
(25) "Firearm storage device" means a container or enclosure designed for the 9
principal purpose of safely storing a firearm and secured by a combination lock, 10
key lock, or lock based on biometric information which, once locked is incapable 11
of being opened without the combination, key, or biometric information, 12
respectively; 13
(26)[(17)] (a) "Gross receipts" and "sales price" mean the total amount or 14
consideration, including cash, credit, property, and services, for which tangible 15
personal property, digital property, or services are sold, leased, or rented, valued in 16
money, whether received in money or otherwise, without any deduction for any of 17
the following: 18
1. The retailer's cost of the tangible personal property, digital property, or 19
services sold; 20
2. The cost of the materials used, labor or service cost, interest, losses, all costs 21
of transportation to the retailer, all taxes imposed on the retailer, or any other 22
expense of the retailer; 23
3. Charges by the retailer for any services necessary to complete the sale; 24
4. Delivery charges, which are defined as charges by the retailer for the 25
preparation and delivery to a location designated by the purchaser including 26
transportation, shipping, postage, handling, crating, and packing; 27 UNOFFICIAL COPY 25 RS BR 1036
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5. Any amount for which credit is given to the purchaser by the retailer, other 1
than credit for tangible personal property or digital property traded when the 2
tangible personal property or digital property traded is of like kind and 3
character to the property purchased and the property traded is held by the 4
retailer for resale; and 5
6. The amount charged for labor or services rendered in installing or applying 6
the tangible personal property, digital property, or service sold. 7
(b) "Gross receipts" and "sales price" shall include consideration received by the 8
retailer from a third party if: 9
1. The retailer actually receives consideration from a third party and the 10
consideration is directly related to a price reduction or discount on the 11
sale to the purchaser; 12
2. The retailer has an obligation to pass the price reduction or discount 13
through to the purchaser; 14
3. The amount of consideration attributable to the sale is fixed and 15
determinable by the retailer at the time of the sale of the item to the 16
purchaser; and 17
4. One (1) of the following criteria is met: 18
a. The purchaser presents a coupon, certificate, or other 19
documentation to the retailer to claim a price reduction or discount 20
where the coupon, certificate, or documentation is authorized, 21
distributed, or granted by a third party with the understanding that 22
the third party will reimburse any seller to whom the coupon, 23
certificate, or documentation is presented; 24
b. The price reduction or discount is identified as a third-party price 25
reduction or discount on the invoice received by the purchaser or 26
on a coupon, certificate, or other documentation presented by the 27 UNOFFICIAL COPY 25 RS BR 1036
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purchaser; or 1
c. The purchaser identifies himself or herself to the retailer as a 2
member of a group or organization entitled to a price reduction or 3
discount. A "preferred customer" card that is available to any 4
patron does not constitute membership in such a group. 5
(c) "Gross receipts" and "sales price" shall not include: 6
1. Discounts, including cash, term, or coupons that are not reimbursed by a 7
third party and that are allowed by a retailer and taken by a purchaser on 8
a sale; 9
2. Interest, financing, and carrying charges from credit extended on the 10
sale of tangible personal property, digital property, or services, if the 11
amount is separately stated on the invoice, bill of sale, or similar 12
document given to the purchaser; 13
3. Any taxes legally imposed directly on the purchaser that are separately 14
stated on the invoice, bill of sale, or similar document given to the 15
purchaser; or 16
4. Local alcohol regulatory license fees authorized under KRS 243.075 that 17
are separately stated on the invoice, bill of sale, or similar document 18
given to the purchaser. 19
(d) As used in this subsection, "third party" means a person other than the 20
purchaser; 21
(27)[(18)] "In this state" or "in the state" means within the exterior limits of the 22
Commonwealth and includes all territory within these limits owned by or ceded to 23
the United States of America; 24
(28)[(19)] "Industrial processing" includes: 25
(a) Refining; 26
(b) Extraction of minerals, ores, coal, clay, stone, petroleum, or natural gas; 27 UNOFFICIAL COPY 25 RS BR 1036
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(c) Mining, quarrying, fabricating, and industrial assembling; 1
(d) The processing and packaging of raw materials, in-process materials, and 2
finished products; and 3
(e) The processing and packaging of farm and dairy products for sale; 4
(29)[(20)] (a) "Lease or rental" means any transfer of possession or control of tangible 5
personal property for a fixed or indeterminate term for consideration. A lease 6
or rental shall include future options to: 7
1. Purchase the property; or 8
2. Extend the terms of the agreement and agreements covering trailers 9
where the amount of consideration may be increased or decreased by 10
reference to the amount realized upon sale or disposition of the property 11
as defined in 26 U.S.C. sec. 7701(h)(1). 12
(b) "Lease or rental" shall not include: 13
1. A transfer of possession or control of property under a security 14
agreement or deferred payment plan that requires the transfer of title 15
upon completion of the required payments; 16
2. A transfer of possession or control of property under an agreement that 17
requires the transfer of title upon completion of the required payments 18
and payment of an option price that does not exceed the greater of one 19
hundred dollars ($100) or one percent (1%) of the total required 20
payments; or 21
3. Providing tangible personal property and an operator for the tangible 22
personal property for a fixed or indeterminate period of time. To qualify 23
for this exclusion, the operator must be necessary for the equipment to 24
perform as designed, and the operator must do more than maintain, 25
inspect, or setup the tangible personal property. 26
(c) This definition shall apply regardless of the classification of a transaction 27 UNOFFICIAL COPY 25 RS BR 1036
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under generally accepted accounting principles, the Internal Revenue Code, or 1
other provisions of federal, state, or local law; 2
(30)[(21)] (a) "Lobbying services" means the act of promoting or securing passage of 3
legislation or an attempt to influence or sway a public official or other public 4
servant toward a desired action, including but not limited to the support of or 5
opposition to a project or the passage, amendment, defeat, approval, or veto of 6
any legislation, regulation, rule, or ordinance; 7
(b) "Lobbying services" includes but is not limited to the performance of 8
activities described as executive agency lobbying activities as defined in KRS 9
11A.201, activities described under the definition of lobby in KRS 6.611, and 10
any similar activities performed at the local, state, or federal levels; 11
(31)[(22)] (a) "Machinery for new and expanded industry" means machinery: 12
1. Directly used in the manufacturing or industrial processing process of: 13
a. Tangible personal property at a plant facility; 14
b. Distilled spirits or wine at a plant facility or on the premises of a 15
distiller, rectifier, winery, or small farm winery licensed under 16
KRS 243.030 that includes a retail establishment on the premises; 17
or 18
c. Malt beverages at a plant facility or on the premises of a brewer or 19
microbrewery licensed under KRS 243.040 that includes a retail 20
establishment; 21
2. Which is incorporated for the first time into: 22
a. A plant facility established in this state; or 23
b. Licensed premises located in this state; and 24
3. Which does not replace machinery in the plant facility or licensed 25
premises unless that machinery purchased to replace existing machinery: 26
a. Increases the consumption of recycled materials at the plant 27 UNOFFICIAL COPY 25 RS BR 1036
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facility by not less than ten percent (10%); 1
b. Performs different functions; 2
c. Is used to manufacture a different product; or 3
d. Has a greater productive capacity, as measured in units of 4
production, than the machinery being replaced. 5
(b) "Machinery for new and expanded industry" does not include repair, 6
replacement, or spare parts of any kind, regardless of whether the purchase of 7
repair, replacement, or spare parts is required by the manufacturer or seller as 8
a condition of sale or as a condition of warranty; 9
(32)[(23)] "Manufacturing" means any process through which material having little or 10
no commercial value for its intended use before processing has appreciable 11
commercial value for its intended use after processing by the machinery; 12
(33)[(24)] "Marketplace" means any physical or electronic means through which one (1) 13
or more retailers may advertise and sell tangible personal property, digital property, 14
or services, or lease tangible personal property or digital property, such as a catalog, 15
internet website, or television or radio broadcast, regardless of whether the tangible 16
personal property, digital property, or retailer is physically present in this state; 17
(34)[(25)] (a) "Marketplace provider" means a person, including any affiliate of the 18
person, that facilitates a retail sale by satisfying subparagraphs 1. and 2. of 19
this paragraph as follows: 20
1. The person directly or indirectly: 21
a. Lists, makes available, or advertises tangible personal property, 22
digital property, or services for sale by a marketplace retailer in a 23
marketplace owned, operated, or controlled by the person; 24
b. Facilitates the sale of a marketplace retailer's product through a 25
marketplace by transmitting or otherwise communicating an offer 26
or acceptance of a retail sale of tangible personal property, digital 27 UNOFFICIAL COPY 25 RS BR 1036
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property, or services between a marketplace retailer and a 1
purchaser in a forum including a shop, store, booth, catalog, 2
internet site, or similar forum; 3
c. Owns, rents, licenses, makes available, or operates any electronic 4
or physical infrastructure or any property, process, method, 5
copyright, trademark, or patent that connects marketplace retailers 6
to purchasers for the purpose of making retail sales of tangible 7
personal property, digital property, or services; 8
d. Provides a marketplace for making retail sales of tangible personal 9
property, digital property, or services, or otherwise facilitates retail 10
sales of tangible personal property, digital property, or services, 11
regardless of ownership or control of the tangible personal 12
property, digital property, or services, that are the subject of the 13
retail sale; 14
e. Provides software development or research and development 15
activities related to any activity described in this subparagraph, if 16
the software development or research and development activities 17
are directly related to the physical or electronic marketplace 18
provided by a marketplace provider; 19
f. Provides or offers fulfillment or storage services for a marketplace 20
retailer; 21
g. Sets prices for a marketplace retailer's sale of tangible personal 22
property, digital property, or services; 23
h. Provides or offers customer service to a marketplace retailer or a 24
marketplace retailer's customers, or accepts or assists with taking 25
orders, returns, or exchanges of tangible personal property, digital 26
property, or services sold by a marketplace retailer; or 27 UNOFFICIAL COPY 25 RS BR 1036
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i. Brands or otherwise identifies sales as those of the marketplace 1
provider; and 2
2. The person directly or indirectly: 3
a. Collects the sales price or purchase price of a retail sale of tangible 4
personal property, digital property, or services; 5
b. Provides payment processing services for a retail sale of tangible 6
personal property, digital property, or services; 7
c. Through terms and conditions, agreements, or arrangements with a 8
third party, collects payment in connection with a retail sale of 9
tangible personal property, digital property, or services from a 10
purchaser and transmits that payment to the marketplace retailer, 11
regardless of whether the person collecting and transmitting the 12
payment receives compensation or other consideration in exchange 13
for the service; or 14
d. Provides a virtual currency that purchasers are allowed or required 15
to use to purchase tangible personal property, digital property, or 16
services. 17
(b) "Marketplace provider" includes but is not limited to a person that satisfies the 18
requirements of this subsection through the ownership, operation, or control 19
of a digital distribution service, digital distribution platform, online portal, or 20
application store; 21
(35)[(26)] "Marketplace retailer" means a seller that makes retail sales through any 22
marketplace owned, operated, or controlled by a marketplace provider; 23
(36)[(27)] (a) "Occasional sale" includes: 24
1. A sale of tangible personal property or digital property not held or used 25
by a seller in the course of an activity for which he or she is required to 26
hold a seller's permit, provided such sale is not one (1) of a series of 27 UNOFFICIAL COPY 25 RS BR 1036
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sales sufficient in number, scope, and character to constitute an activity 1
requiring the holding of a seller's permit. In the case of the sale of the 2
entire, or a substantial portion of the nonretail assets of the seller, the 3
number of previous sales of similar assets shall be disregarded in 4
determining whether or not the current sale or sales shall qualify as an 5
occasional sale; or 6
2. Any transfer of all or substantially all the tangible personal property or 7
digital property held or used by a person in the course of such an activity 8
when after such transfer the real or ultimate ownership of such property 9
is substantially similar to that which existed before such transfer. 10
(b) For the purposes of this subsection, stockholders, bondholders, partners, or 11
other persons holding an interest in a corporation or other entity are regarded 12
as having the "real or ultimate ownership" of the tangible personal property or 13
digital property of such corporation or other entity; 14
(37)[(28)] (a) "Other direct mail" means any direct mail that is not advertising and 15
promotional direct mail, regardless of whether advertising and promotional 16
direct mail is included in the same mailing. 17
(b) "Other direct mail" includes but is not limited to: 18
1. Transactional direct mail that contains personal information specific to 19
the addressee, including but not limited to invoices, bills, statements of 20
account, and payroll advices; 21
2. Any legally required mailings, including but not limited to privacy 22
notices, tax reports, and stockholder reports; and 23
3. Other nonpromotional direct mail delivered to existing or former 24
shareholders, customers, employees, or agents, including but not limited 25
to newsletters and informational pieces. 26
(c) "Other direct mail" does not include the development of billing information or 27 UNOFFICIAL COPY 25 RS BR 1036
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the provision of any data processing service that is more than incidental to the 1
production of printed material; 2
(38)[(29)] "Person" includes any individual, firm, copartnership, joint venture, 3
association, social club, fraternal organization, corporation, estate, trust, business 4
trust, receiver, trustee, syndicate, cooperative, assignee, governmental unit or 5
agency, or any other group or combination acting as a unit; 6
(39)[(30)] "Permanent," as the term applies to digital property, means perpetual or for an 7
indefinite or unspecified length of time; 8
(40)[(31)] (a) "Photography and photofinishing services" means: 9
1. The taking, developing, or printing of an original photograph; or 10
2. Image editing, including shadow removal, tone adjustments, vertical and 11
horizontal alignment and cropping, composite image creation, 12
formatting, watermarking printing, and delivery of an original 13
photograph in the form of tangible personal property, digital property, or 14
other media. 15
(b) "Photography and photofinishing services" does not include photography 16
services necessary for medical or dental health; 17
(41)[(32)] "Plant facility" means a single location that is exclusively dedicated to 18
manufacturing or industrial processing activities. A location shall be deemed to be 19
exclusively dedicated to manufacturing or industrial processing activities even if 20
retail sales are made there, provided that the retail sales are incidental to the 21
manufacturing or industrial processing activities occurring at the location. The term 22
"plant facility" shall not include any restaurant, grocery store, shopping center, or 23
other retail establishment; 24
(42)[(33)] (a) "Prewritten computer software" means: 25
1. Computer software, including prewritten upgrades, that are not designed 26
and developed by the author or other creator to the specifications of a 27 UNOFFICIAL COPY 25 RS BR 1036
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specific purchaser; 1
2. Software designed and developed by the author or other creator to the 2
specifications of a specific purchaser when it is sold to a person other 3
than the original purchaser; or 4
3. Any portion of prewritten computer software that is modified or 5
enhanced in any manner, where the modification or enhancement is 6
designed and developed to the specifications of a specific purchaser, 7
unless there is a reasonable, separately stated charge on an invoice or 8
other statement of the price to the purchaser for the modification or 9
enhancement. 10
(b) When a person modifies or enhances computer software of which the person 11
is not the author or creator, the person shall be deemed to be the author or 12
creator only of the modifications or enhancements the person actually made. 13
(c) The combining of two (2) or more prewritten computer software programs or 14
portions thereof does not cause the combination to be other than prewritten 15
computer software; 16
(43)[(34)] "Prewritten computer software access services" means the right of access to 17
prewritten computer software where the object of the transaction is to use the 18
prewritten computer software while possession of the prewritten computer software 19
is maintained by the seller or a third party, wherever located, regardless of whether 20
the charge for the access or use is on a per use, per user, per license, subscription, or 21
some other basis; 22
(44)[(35)] (a) "Purchase" means any transfer of title or possession, exchange, barter, 23
lease, or rental, conditional or otherwise, in any manner or by any means 24
whatsoever, of: 25
1. Tangible personal property; 26
2. An extended warranty service; 27 UNOFFICIAL COPY 25 RS BR 1036
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3. Digital property transferred electronically; or 1
4. Services included in KRS 139.200; 2
for a consideration. 3
(b) "Purchase" includes: 4
1. When performed outside this state or when the customer gives a resale 5
certificate, the producing, fabricating, processing, printing, or imprinting 6
of tangible personal property for a consideration for consumers who 7
furnish either directly or indirectly the materials used in the producing, 8
fabricating, processing, printing, or imprinting; 9
2. A transaction whereby the possession of tangible personal property or 10
digital property is transferred but the seller retains the title as security 11
for the payment of the price; and 12
3. A transfer for a consideration of the title or possession of tangible 13
personal property or digital property which has been produced, 14
fabricated, or printed to the special order of the customer, or of any 15
publication; 16
(45)[(36)] "Recycled materials" means materials which have been recovered or diverted 17
from the solid waste stream and reused or returned to use in the form of raw 18
materials or products; 19
(46)[(37)] "Recycling purposes" means those activities undertaken in which materials 20
that would otherwise become solid waste are collected, separated, or processed in 21
order to be reused or returned to use in the form of raw materials or products; 22
(47)[(38)] "Remote retailer" means a retailer with no physical presence in this state; 23
(48)[(39)] (a) "Repair, replacement, or spare parts" means any tangible personal 24
property used to maintain, restore, mend, or repair machinery or equipment. 25
(b) "Repair, replacement, or spare parts" does not include machine oils, grease, or 26
industrial tools; 27 UNOFFICIAL COPY 25 RS BR 1036
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(49)[(40)] (a) "Retailer" means: 1
1. Every person engaged in the business of making retail sales of tangible 2
personal property, digital property, or furnishing any services in a retail 3
sale included in KRS 139.200; 4
2. Every person engaged in the business of making sales at auction of 5
tangible personal property or digital property owned by the person or 6
others for storage, use or other consumption, except as provided in 7
paragraph (c) of this subsection; 8
3. Every person making more than two (2) retail sales of tangible personal 9
property, digital property, or services included in KRS 139.200 during 10
any twelve (12) month period, including sales made in the capacity of 11
assignee for the benefit of creditors, or receiver or trustee in bankruptcy; 12
4. Any person conducting a race meeting under the provision of KRS 13
Chapter 230, with respect to horses which are claimed during the 14
meeting. 15
(b) When the department determines that it is necessary for the efficient 16
administration of this chapter to regard any salesmen, representatives, 17
peddlers, or canvassers as the agents of the dealers, distributors, supervisors or 18
employers under whom they operate or from whom they obtain the tangible 19
personal property, digital property, or services sold by them, irrespective of 20
whether they are making sales on their own behalf or on behalf of the dealers, 21
distributors, supervisors or employers, the department may so regard them and 22
may regard the dealers, distributors, supervisors or employers as retailers for 23
purposes of this chapter. 24
(c) 1. Any person making sales at a charitable auction for a qualifying entity 25
shall not be a retailer for purposes of the sales made at the charitable 26
auction if: 27 UNOFFICIAL COPY 25 RS BR 1036
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a. The qualifying entity, not the person making sales at the auction, is 1
sponsoring the auction; 2
b. The purchaser of tangible personal property at the auction directly 3
pays the qualifying entity sponsoring the auction for the property 4
and not the person making the sales at the auction; and 5
c. The qualifying entity, not the person making sales at the auction, is 6
responsible for the collection, control, and disbursement of the 7
auction proceeds. 8
2. If the conditions set forth in subparagraph 1. of this paragraph are met, 9
the qualifying entity sponsoring the auction shall be the retailer for 10
purposes of the sales made at the charitable auction. 11
3. For purposes of this paragraph, "qualifying entity" means a resident: 12
a. Church; 13
b. School; 14
c. Civic club; or 15
d. Any other nonprofit charitable, religious, or educational 16
organization; 17
(50)[(41)] "Retail sale" means any sale, lease, or rental for any purpose other than resale, 18
sublease, or subrent; 19
(51)[(42)] (a) "Ringtones" means digitized sound files that are downloaded onto a 20
device and that may be used to alert the customer with respect to a 21
communication. 22
(b) "Ringtones" shall not include ringback tones or other digital files that are not 23
stored on the purchaser's communications device; 24
(52)[(43)] (a) "Sale" means: 25
1. The furnishing of any services included in KRS 139.200; 26
2. Any transfer of title or possession, exchange, barter, lease, or rental, 27 UNOFFICIAL COPY 25 RS BR 1036
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conditional or otherwise, in any manner or by any means whatsoever, 1
of: 2
a. Tangible personal property; or 3
b. Digital property transferred electronically; 4
for a consideration. 5
(b) "Sale" includes but is not limited to: 6
1. The producing, fabricating, processing, printing, or imprinting of 7
tangible personal property or digital property for a consideration for 8
purchasers who furnish, either directly or indirectly, the materials used 9
in the producing, fabricating, processing, printing, or imprinting; 10
2. A transaction whereby the possession of tangible personal property or 11
digital property is transferred, but the seller retains the title as security 12
for the payment of the price; and 13
3. A transfer for a consideration of the title or possession of tangible 14
personal property or digital property which has been produced, 15
fabricated, or printed to the special order of the purchaser. 16
(c) This definition shall apply regardless of the classification of a transaction 17
under generally accepted accounting principles, the Internal Revenue Code, or 18
other provisions of federal, state, or local law; 19
(53)[(44)] "Seller" includes every person engaged in the business of selling tangible 20
personal property, digital property, or services of a kind, the gross receipts from the 21
retail sale of which are required to be included in the measure of the sales tax, and 22
every person engaged in making sales for resale; 23
(54)[(45)] (a) "Storage" includes any keeping or retention in this state for any purpose 24
except sale in the regular course of business or subsequent use solely outside 25
this state of tangible personal property, digital property, or prewritten 26
computer software access services purchased from a retailer. 27 UNOFFICIAL COPY 25 RS BR 1036
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(b) "Storage" does not include the keeping, retaining, or exercising any right or 1
power over tangible personal property for the purpose of subsequently 2
transporting it outside the state for use thereafter solely outside the state, or 3
for the purpose of being processed, fabricated, or manufactured into, attached 4
to, or incorporated into, other tangible personal property to be transported 5
outside the state and thereafter used solely outside the state; 6
(55)[(46)] "Tangible personal property" means personal property which may be seen, 7
weighed, measured, felt, or touched, or which is in any other manner perceptible to 8
the senses and includes natural, artificial, and mixed gas, electricity, water, steam, 9
and prewritten computer software; 10
(56)[(47)] "Taxpayer" means any person liable for tax under this chapter; 11
(57)[(48)] "Telemarketing services" means services provided via telephone, facsimile, 12
electronic mail, text messages, or other modes of communications to another 13
person, which are unsolicited by that person, for the purposes of: 14
(a) 1. Promoting products or services; 15
2. Taking orders; or 16
3. Providing information or assistance regarding the products or services; 17
or 18
(b) Soliciting contributions; 19
(58)[(49)] "Transferred electronically" means accessed or obtained by the purchaser by 20
means other than tangible storage media; and 21
(59)[(50)] (a) "Use" includes the exercise of: 22
1. Any right or power over tangible personal property or digital property 23
incident to the ownership of that property, or by any transaction in 24
which possession is given, or by any transaction involving digital 25
property or tangible personal property where the right of access is 26
granted; or 27 UNOFFICIAL COPY 25 RS BR 1036
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2. Any right or power to benefit from any services subject to tax under 1
KRS 139.200(2)(p) to (ax). 2
(b) "Use" does not include the keeping, retaining, or exercising any right or 3
power over: 4
1. Tangible personal property or digital property for the purpose of: 5
a. Selling tangible personal property or digital property in the regular 6
course of business; or 7
b. Subsequently transporting tangible personal property outside the 8
state for use thereafter solely outside the state, or for the purpose 9
of being processed, fabricated, or manufactured into, attached to, 10
or incorporated into, other tangible personal property to be 11
transported outside the state and thereafter used solely outside the 12
state; or 13
2. Prewritten computer software access services purchased for use outside 14
the state and transferred electronically outside the state for use thereafter 15
solely outside the state. 16
Section 2. KRS 139.480 is amended to read as follows: 17
Any other provision of this chapter to the contrary notwithstanding, the terms "sale at 18
retail," "retail sale," "use," "storage," and "consumption," as used in this chapter, shall not 19
include the sale, use, storage, or other consumption of: 20
(1) Locomotives or rolling stock, including materials for the construction, repair, or 21
modification thereof, or fuel or supplies for the direct operation of locomotives and 22
trains, used or to be used in interstate commerce; 23
(2) Coal for the manufacture of electricity; 24
(3) (a) All energy or energy-producing fuels used in the course of manufacturing, 25
processing, mining, or refining and any related distribution, transmission, and 26
transportation services for this energy that are billed to the user, to the extent 27 UNOFFICIAL COPY 25 RS BR 1036
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that the cost of the energy or energy-producing fuels used, and related 1
distribution, transmission, and transportation services for this energy that are 2
billed to the user exceed three percent (3%) of the cost of production. 3
(b) Cost of production shall be computed on the basis of a plant facility, which 4
shall include all operations within the continuous, unbroken, integrated 5
manufacturing or industrial processing process that ends with a product 6
packaged and ready for sale. 7
(c) A person who performs a manufacturing or industrial processing activity for a 8
fee and does not take ownership of the tangible personal property that is 9
incorporated into, or becomes the product of, the manufacturing or industrial 10
processing activity is a toller. For periods on or after July 1, 2018, the costs of 11
the tangible personal property shall be excluded from the toller's cost of 12
production at a plant facility with tolling operations in place as of July 1, 13
2018. 14
(d) For plant facilities that begin tolling operations after July 1, 2018, the costs of 15
tangible personal property shall be excluded from the toller's cost of 16
production if the toller: 17
1. Maintains a binding contract for periods after July 1, 2018, that governs 18
the terms, conditions, and responsibilities with a separate legal entity, 19
which holds title to the tangible personal property that is incorporated 20
into, or becomes the product of, the manufacturing or industrial 21
processing activity; 22
2. Maintains accounting records that show the expenses it incurs to fulfill 23
the binding contract that include but are not limited to energy or energy-24
producing fuels, materials, labor, procurement, depreciation, 25
maintenance, taxes, administration, and office expenses; 26
3. Maintains separate payroll, bank accounts, tax returns, and other records 27 UNOFFICIAL COPY 25 RS BR 1036
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that demonstrate its independent operations in the performance of its 1
tolling responsibilities; 2
4. Demonstrates one (1) or more substantial business purposes for the 3
tolling operations germane to the overall manufacturing, industrial 4
processing activities, or corporate structure at the plant facility. A 5
business purpose is a purpose other than the reduction of sales tax 6
liability for the purchases of energy and energy-producing fuels; and 7
5. Provides information to the department upon request that documents 8
fulfillment of the requirements in subparagraphs 1. to 4. of this 9
paragraph and gives an overview of its tolling operations with an 10
explanation of how the tolling operations relate and connect with all 11
other manufacturing or industrial processing activities occurring at the 12
plant facility; 13
(4) Livestock of a kind the products of which ordinarily constitute food for human 14
consumption, provided the sales are made for breeding or dairy purposes and by or 15
to a person regularly engaged in the business of farming; 16
(5) Poultry for use in breeding or egg production; 17
(6) Farm work stock for use in farming operations; 18
(7) Seeds, the products of which ordinarily constitute food for human consumption or 19
are to be sold in the regular course of business, and commercial fertilizer to be 20
applied on land, the products from which are to be used for food for human 21
consumption or are to be sold in the regular course of business; provided the sales 22
are made to farmers who are regularly engaged in the occupation of tilling and 23
cultivating the soil for the production of crops as a business, or who are regularly 24
engaged in the occupation of raising and feeding livestock or poultry or producing 25
milk for sale; and provided further that tangible personal property so sold is to be 26
used only by those persons designated above who are so purchasing; 27 UNOFFICIAL COPY 25 RS BR 1036
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(8) Insecticides, fungicides, herbicides, rodenticides, and other farm chemicals to be 1
used in the production of crops as a business, or in the raising and feeding of 2
livestock or poultry, the products of which ordinarily constitute food for human 3
consumption; 4
(9) Feed, including pre-mixes and feed additives, for livestock or poultry of a kind the 5
products of which ordinarily constitute food for human consumption; 6
(10) Machinery for new and expanded industry; 7
(11) Farm machinery. As used in this section, the term "farm machinery": 8
(a) Means machinery used exclusively and directly in the occupation of: 9
1. Tilling the soil for the production of crops as a business; 10
2. Raising and feeding livestock or poultry for sale; or 11
3. Producing milk for sale; 12
(b) Includes machinery, attachments, and replacements therefor, repair parts, and 13
replacement parts which are used or manufactured for use on, or in the 14
operation of farm machinery and which are necessary to the operation of the 15
machinery, and are customarily so used, including but not limited to combine 16
header wagons, combine header trailers, or any other implements specifically 17
designed and used to move or transport a combine head; and 18
(c) Does not include: 19
1. Automobiles; 20
2. Trucks; 21
3. Trailers, except combine header trailers; or 22
4. Truck-trailer combinations; 23
(12) Tombstones and other memorial grave markers; 24
(13) On-farm facilities used exclusively for grain or soybean storing, drying, processing, 25
or handling. The exemption applies to the equipment, machinery, attachments, 26
repair and replacement parts, and any materials incorporated into the construction, 27 UNOFFICIAL COPY 25 RS BR 1036
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renovation, or repair of the facilities; 1
(14) On-farm facilities used exclusively for raising poultry or livestock. The exemption 2
shall apply to the equipment, machinery, attachments, repair and replacement parts, 3
and any materials incorporated into the construction, renovation, or repair of the 4
facilities. The exemption shall apply but not be limited to vent board equipment, 5
waterer and feeding systems, brooding systems, ventilation systems, alarm systems, 6
and curtain systems. In addition, the exemption shall apply whether or not the seller 7
is under contract to deliver, assemble, and incorporate into real estate the 8
equipment, machinery, attachments, repair and replacement parts, and any materials 9
incorporated into the construction, renovation, or repair of the facilities; 10
(15) Gasoline, special fuels, liquefied petroleum gas, and natural gas used exclusively 11
and directly to: 12
(a) Operate farm machinery as defined in subsection (11) of this section; 13
(b) Operate on-farm grain or soybean drying facilities as defined in subsection 14
(13) of this section; 15
(c) Operate on-farm poultry or livestock facilities defined in subsection (14) of 16
this section; 17
(d) Operate on-farm ratite facilities defined in subsection (23) of this section; 18
(e) Operate on-farm llama or alpaca facilities as defined in subsection (25) of this 19
section; or 20
(f) Operate on-farm dairy facilities; 21
(16) Textbooks, including related workbooks and other course materials, purchased for 22
use in a course of study conducted by an institution which qualifies as a nonprofit 23
educational institution under KRS 139.495. The term "course materials" means only 24
those items specifically required of all students for a particular course but shall not 25
include notebooks, paper, pencils, calculators, tape recorders, or similar student 26
aids; 27 UNOFFICIAL COPY 25 RS BR 1036
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(17) Any property which has been certified as an alcohol production facility as defined 1
in KRS 247.910; 2
(18) Aircraft, repair and replacement parts therefor, and supplies, except fuel, for the 3
direct operation of aircraft in interstate commerce and used exclusively for the 4
conveyance of property or passengers for hire. Nominal intrastate use shall not 5
subject the property to the taxes imposed by this chapter; 6
(19) Any property which has been certified as a fluidized bed energy production facility 7
as defined in KRS 211.390; 8
(20) (a) 1. Any property to be incorporated into the construction, rebuilding, 9
modification, or expansion of a blast furnace or any of its components or 10
appurtenant equipment or structures as part of an approved supplemental 11
project, as defined by KRS 154.26-010; and 12
2. Materials, supplies, and repair or replacement parts purchased for use in 13
the operation and maintenance of a blast furnace and related carbon 14
steel-making operations as part of an approved supplemental project, as 15
defined by KRS 154.26-010. 16
(b) The exemptions provided in this subsection shall be effective for sales made: 17
1. On and after July 1, 2018; and 18
2. During the term of a supplemental project agreement entered into 19
pursuant to KRS 154.26-090; 20
(21) Beginning on October 1, 1986, food or food products purchased for human 21
consumption with food coupons issued by the United States Department of 22
Agriculture pursuant to the Food Stamp Act of 1977, as amended, and required to 23
be exempted by the Food Security Act of 1985 in order for the Commonwealth to 24
continue participation in the federal food stamp program; 25
(22) Machinery or equipment purchased or leased by a business, industry, or 26
organization in order to collect, source separate, compress, bale, shred, or otherwise 27 UNOFFICIAL COPY 25 RS BR 1036
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handle waste materials if the machinery or equipment is primarily used for 1
recycling purposes; 2
(23) Ratite birds and eggs to be used in an agricultural pursuit for the breeding and 3
production of ratite birds, feathers, hides, breeding stock, eggs, meat, and ratite by-4
products, and the following items used in this agricultural pursuit: 5
(a) Feed and feed additives; 6
(b) Insecticides, fungicides, herbicides, rodenticides, and other farm chemicals; 7
and 8
(c) On-farm facilities, including equipment, machinery, attachments, repair and 9
replacement parts, and any materials incorporated into the construction, 10
renovation, or repair of the facilities. The exemption shall apply to incubation 11
systems, egg processing equipment, waterer and feeding systems, brooding 12
systems, ventilation systems, alarm systems, and curtain systems. In addition, 13
the exemption shall apply whether or not the seller is under contract to 14
deliver, assemble, and incorporate into real estate the equipment, machinery, 15
attachments, repair and replacement parts, and any materials incorporated into 16
the construction, renovation, or repair of the facilities; 17
(24) Embryos and semen that are used in the reproduction of livestock, if the products of 18
these embryos and semen ordinarily constitute food for human consumption, and if 19
the sale is made to a person engaged in the business of farming; 20
(25) Llamas and alpacas to be used as beasts of burden or in an agricultural pursuit for 21
the breeding and production of hides, breeding stock, fiber and wool products, 22
meat, and llama and alpaca by-products, and the following items used in this 23
pursuit: 24
(a) Feed and feed additives; 25
(b) Insecticides, fungicides, herbicides, rodenticides, and other farm chemicals; 26
and 27 UNOFFICIAL COPY 25 RS BR 1036
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(c) On-farm facilities, including equipment, machinery, attachments, repair and 1
replacement parts, and any materials incorporated into the construction, 2
renovation, or repair of the facilities. The exemption shall apply to waterer 3
and feeding systems, ventilation systems, and alarm systems. In addition, the 4
exemption shall apply whether or not the seller is under contract to deliver, 5
assemble, and incorporate into real estate the equipment, machinery, 6
attachments, repair and replacement parts, and any materials incorporated into 7
the construction, renovation, or repair of the facilities; 8
(26) Baling twine and baling wire for the baling of hay and straw; 9
(27) Water sold to a person regularly engaged in the business of farming and used in the: 10
(a) Production of crops; 11
(b) Production of milk for sale; or 12
(c) Raising and feeding of: 13
1. Livestock or poultry, the products of which ordinarily constitute food 14
for human consumption; or 15
2. Ratites, llamas, alpacas, buffalo, cervids or aquatic organisms; 16
(28) Buffalos to be used as beasts of burden or in an agricultural pursuit for the 17
production of hides, breeding stock, meat, and buffalo by-products, and the 18
following items used in this pursuit: 19
(a) Feed and feed additives; 20
(b) Insecticides, fungicides, herbicides, rodenticides, and other farm chemicals; 21
and 22
(c) On-farm facilities, including equipment, machinery, attachments, repair and 23
replacement parts, and any materials incorporated into the construction, 24
renovation, or repair of the facilities. The exemption shall apply to waterer 25
and feeding systems, ventilation systems, and alarm systems. In addition, the 26
exemption shall apply whether or not the seller is under contract to deliver, 27 UNOFFICIAL COPY 25 RS BR 1036
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assemble, and incorporate into real estate the equipment, machinery, 1
attachments, repair and replacement parts, and any materials incorporated into 2
the construction, renovation, or repair of the facilities; 3
(29) Aquatic organisms sold directly to or raised by a person regularly engaged in the 4
business of producing products of aquaculture, as defined in KRS 260.960, for sale, 5
and the following items used in this pursuit: 6
(a) Feed and feed additives; 7
(b) Water; 8
(c) Insecticides, fungicides, herbicides, rodenticides, and other farm chemicals; 9
and 10
(d) On-farm facilities, including equipment, machinery, attachments, repair and 11
replacement parts, and any materials incorporated into the construction, 12
renovation, or repair of the facilities and, any gasoline, special fuels, liquefied 13
petroleum gas, or natural gas used to operate the facilities. The exemption 14
shall apply, but not be limited to: waterer and feeding systems; ventilation, 15
aeration, and heating systems; processing and storage systems; production 16
systems such as ponds, tanks, and raceways; harvest and transport equipment 17
and systems; and alarm systems. In addition, the exemption shall apply 18
whether or not the seller is under contract to deliver, assemble, and 19
incorporate into real estate the equipment, machinery, attachments, repair and 20
replacement parts, and any materials incorporated into the construction, 21
renovation, or repair of the facilities; 22
(30) Members of the genus cervidae permitted by KRS Chapter 150 that are used for the 23
production of hides, breeding stock, meat, and cervid by-products, and the 24
following items used in this pursuit: 25
(a) Feed and feed additives; 26
(b) Insecticides, fungicides, herbicides, rodenticides, and other chemicals; and 27 UNOFFICIAL COPY 25 RS BR 1036
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(c) On-site facilities, including equipment, machinery, attachments, repair and 1
replacement parts, and any materials incorporated into the construction, 2
renovation, or repair of the facilities. In addition, the exemption shall apply 3
whether or not the seller is under contract to deliver, assemble, and 4
incorporate into real estate the equipment, machinery, attachments, repair and 5
replacement parts, and any materials incorporated into the construction, 6
renovation, or repair of the facilities; 7
(31) (a) Repair or replacement parts for the direct operation or maintenance of a motor 8
vehicle, including any towed unit, used exclusively in interstate commerce for 9
the conveyance of property or passengers for hire, provided the motor vehicle 10
is licensed for use on the highway and its declared gross vehicle weight with 11
any towed unit is forty-four thousand and one (44,001) pounds or greater. 12
Nominal intrastate use shall not subject the property to the taxes imposed by 13
this chapter; and 14
(b) Repair or replacement parts for the direct operation and maintenance of a 15
motor vehicle operating under a charter bus certificate issued by the 16
Transportation Cabinet under KRS Chapter 281, or under similar authority 17
granted by the United States Department of Transportation. 18
(c) For the purposes of this subsection, "repair or replacement parts" means tires, 19
brakes, engines, transmissions, drive trains, chassis, body parts, and their 20
components. "Repair or replacement parts" shall not include fuel, machine 21
oils, hydraulic fluid, brake fluid, grease, supplies, or accessories not essential 22
to the operation of the motor vehicle itself, except when sold as part of the 23
assembled unit, such as cigarette lighters, radios, lighting fixtures not 24
otherwise required by the manufacturer for operation of the vehicle, or tool or 25
utility boxes; 26
(32) Food donated by a retail food establishment or any other entity regulated under 27 UNOFFICIAL COPY 25 RS BR 1036
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KRS 217.127 to a nonprofit organization for distribution to the needy; 1
(33) Drugs and over-the-counter drugs, as defined in KRS 139.472, that are purchased 2
by a person regularly engaged in the business of farming and used in the treatment 3
of cattle, sheep, goats, swine, poultry, ratite birds, llamas, alpacas, buffalo, aquatic 4
organisms, or cervids; 5
(34) (a) Building materials, fixtures, or supplies purchased by a construction 6
contractor if: 7
1. Fulfilled by a construction contract for a sewer or water project with: 8
a. A municipally owned water utility organized under KRS Chapter 9
96; 10
b. A water district or water commission formed or organized under 11
KRS Chapter 74; 12
c. A sanitation district established under KRS Chapter 220 or formed 13
pursuant to KRS Chapter 65; 14
d. A nonprofit corporation created under KRS 58.180 to act on behalf 15
of a governmental agency in the acquisition and financing of 16
public projects; 17
e. Regional wastewater commissions formed under KRS Chapter 18
278; 19
f. A municipally owned joint sewer agency formed under KRS 20
Chapter 76; or 21
g. Any other governmental agency; and 22
2. The building materials, fixtures, or supplies: 23
a. Will be permanently incorporated into a structure or improvement 24
to real property, or will be completely consumed, in fulfilling a 25
construction contract for the purpose of furnishing water or sewer 26
services to the general public; and 27 UNOFFICIAL COPY 25 RS BR 1036
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b. Would be exempt if purchased directly by the entities listed in 1
subparagraph 1. of this paragraph. 2
(b) As used in this subsection, "construction contract" means a: 3
1. Lump sum contract; 4
2. Cost plus contract; 5
3. Materials only contract; 6
4. Labor and materials contract; or 7
5. Any other type of contract. 8
(c) The exemption provided in this subsection shall apply without regard to the 9
payment arrangement between the construction contractor, the retailer, and 10
the entities listed in paragraph (a)1. of this subsection or to the place of 11
delivery for the building materials, fixtures, or supplies; 12
(35) (a) On or after February 25, 2022, the rental of space for meetings, conventions, 13
short-term business uses, entertainment events, weddings, banquets, parties, 14
and other short-term social events, as referenced in KRS 139.200, if the tax 15
established in KRS 139.200 is paid by the primary lessee to the lessor. 16
(b) For the purpose of this subsection, "primary lessee" means the person who 17
leases the space and who has a contract with the lessor of the space only if: 18
1. The contract between the lessor and the lessee specifies that the lessee 19
may sublease, subrent, or otherwise sell the space; and 20
2. The space is then sublet, subrented, or otherwise sold to exhibitors, 21
vendors, sponsors, or other entities and persons who will use the space 22
associated with the event to be conducted under the primary lease; 23
(36) Prewritten computer software access services sold to or purchased by a retailer that 24
develops prewritten computer software for print technology and uses and sells 25
prewritten computer software access services for print technology; 26
(37) (a) Currency or bullion. 27 UNOFFICIAL COPY 25 RS BR 1036
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(b) As used in this subsection: 1
1. "Bullion": 2
a. Means bars, ingots, or coins, which are: 3
i. Made of gold, silver, platinum, palladium, or a combination 4
of these metals; 5
ii. Valued based on the content of the metal and not its form; 6
and 7
iii. Used, or have been used, as a medium of exchange, security, 8
or commodity by any state, the United States government, or 9
a foreign nation; and 10
b. Does not include medallions or coins that are incorporated into a 11
pendant or other jewelry; and 12
2. "Currency": 13
a. Means a coin or currency made of gold, silver, platinum, 14
palladium, or other metal or paper money that is or has been used 15
as legal tender and is sold based on its value as a collectible item 16
rather than the value as a medium of exchange; and 17
b. Does not include a coin or currency that has been incorporated into 18
jewelry;[ and] 19
(38) Medicinal cannabis as defined in KRS 218B.010 when sold, used, stored, or 20
consumed in accordance with KRS Chapter 218B; and 21
(39) (a) Ammunition, antique firearms, body armor, firearms, firearm-related 22
accessories, firearm safety courses, firearm safety devices, and firearm 23
storage devices; 24
(b) Admissions or other program fees relating to: 25
1. A trade show that lasts less than seven (7) days, in which firearms are 26
available for sale or purchase by the public; or 27 UNOFFICIAL COPY 25 RS BR 1036
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2. A facility which offers indoor or outdoor target practice for firearms to 1
the public; and 2
(c) Noise cancelling ear protection with a noise reduction rating of twenty-five 3
(25) decibels or more. 4
Section 3. This Act takes effect July 1, 2025. 5