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AN ACT relating to sales and use taxes. 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 1470
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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" does[shall] not include video greeting cards, 20
video 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" does[shall] not include audio greeting cards sent by 27 UNOFFICIAL COPY 25 RS BR 1470
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electronic 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" does[shall] not include digital audio-visual works, digital 6
audio works, periodicals, magazines, newspapers, or other news or 7
information 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" does[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 25 RS BR 1470
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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" does[shall] not include digital audio-visual works or 5
satellite 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 25 RS BR 1470
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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 25 RS BR 1470
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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 25 RS BR 1470
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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" does[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. Document fees, lien fees, insurance passed through from the 21
manufacturer, interest, financing, and carrying charges from credit 22
extended on the sale of tangible personal property, digital property, or 23
services, if the amount is separately stated on the invoice, bill of sale, or 24
similar document given to the purchaser; 25
3. Any taxes legally imposed directly on the purchaser that are separately 26
stated on the invoice, bill of sale, or similar document given to the 27 UNOFFICIAL COPY 25 RS BR 1470
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purchaser; or 1
4. Local alcohol regulatory license fees authorized under KRS 243.075 that 2
are separately stated on the invoice, bill of sale, or similar document 3
given to the purchaser. 4
(d) As used in this subsection, "third party" means a person other than the 5
purchaser; 6
(18) "In this state" or "in the state" means within the exterior limits of the 7
Commonwealth and includes all territory within these limits owned by or ceded to 8
the United States of America; 9
(19) "Industrial processing" includes: 10
(a) Refining; 11
(b) Extraction of minerals, ores, coal, clay, stone, petroleum, or natural gas; 12
(c) Mining, quarrying, fabricating, and industrial assembling; 13
(d) The processing and packaging of raw materials, in-process materials, and 14
finished products; and 15
(e) The processing and packaging of farm and dairy products for sale; 16
(20) (a) "Lease or rental" means any transfer of possession or control of tangible 17
personal property for a fixed or indeterminate term for consideration. A lease 18
or rental shall include future options to: 19
1. Purchase the property; or 20
2. Extend the terms of the agreement and agreements covering trailers 21
where the amount of consideration may be increased or decreased by 22
reference to the amount realized upon sale or disposition of the property 23
as defined in 26 U.S.C. sec. 7701(h)(1). 24
(b) "Lease or rental" does[shall] not include: 25
1. A transfer of possession or control of property under a security 26
agreement or deferred payment plan that requires the transfer of title 27 UNOFFICIAL COPY 25 RS BR 1470
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upon completion of the required payments; 1
2. A transfer of possession or control of property under an agreement that 2
requires the transfer of title upon completion of the required payments 3
and payment of an option price that does not exceed the greater of one 4
hundred dollars ($100) or one percent (1%) of the total required 5
payments; or 6
3. Providing tangible personal property and an operator for the tangible 7
personal property for a fixed or indeterminate period of time. To qualify 8
for this exclusion, the operator must be necessary for the equipment to 9
perform as designed, and the operator must do more than maintain, 10
inspect, or setup the tangible personal property. 11
(c) This definition shall apply regardless of the classification of a transaction 12
under generally accepted accounting principles, the Internal Revenue Code, or 13
other provisions of federal, state, or local law; 14
(21) (a) "Lobbying services" means the act of promoting or securing passage of 15
legislation or an attempt to influence or sway a public official or other public 16
servant toward a desired action, including but not limited to the support of or 17
opposition to a project or the passage, amendment, defeat, approval, or veto of 18
any legislation, regulation, rule, or ordinance; 19
(b) "Lobbying services" includes but is not limited to the performance of 20
activities described as executive agency lobbying activities as defined in KRS 21
11A.201, activities described under the definition of lobby in KRS 6.611, and 22
any similar activities performed at the local, state, or federal levels; 23
(22) (a) "Machinery for new and expanded industry" means machinery: 24
1. Directly used in the manufacturing or industrial processing process of: 25
a. Tangible personal property at a plant facility; 26
b. Distilled spirits or wine at a plant facility or on the premises of a 27 UNOFFICIAL COPY 25 RS BR 1470
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distiller, rectifier, winery, or small farm winery licensed under 1
KRS 243.030 that includes a retail establishment on the premises; 2
or 3
c. Malt beverages at a plant facility or on the premises of a brewer or 4
microbrewery licensed under KRS 243.040 that includes a retail 5
establishment; 6
2. Which is incorporated for the first time into: 7
a. A plant facility established in this state; or 8
b. Licensed premises located in this state; and 9
3. Which does not replace machinery in the plant facility or licensed 10
premises unless that machinery purchased to replace existing machinery: 11
a. Increases the consumption of recycled materials at the plant 12
facility by not less than ten percent (10%); 13
b. Performs different functions; 14
c. Is used to manufacture a different product; or 15
d. Has a greater productive capacity, as measured in units of 16
production, than the machinery being replaced. 17
(b) "Machinery for new and expanded industry" does not include repair, 18
replacement, or spare parts of any kind, regardless of whether the purchase of 19
repair, replacement, or spare parts is required by the manufacturer or seller as 20
a condition of sale or as a condition of warranty; 21
(23) "Manufacturing" means any process through which material having little or no 22
commercial value for its intended use before processing has appreciable 23
commercial value for its intended use after processing by the machinery; 24
(24) "Marketplace" means any physical or electronic means through which one (1) or 25
more retailers may advertise and sell tangible personal property, digital property, or 26
services, or lease tangible personal property or digital property, such as a catalog, 27 UNOFFICIAL COPY 25 RS BR 1470
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Internet website, or television or radio broadcast, regardless of whether the tangible 1
personal property, digital property, or retailer is physically present in this state; 2
(25) (a) "Marketplace provider" means a person, including any affiliate of the person, 3
that facilitates a retail sale by satisfying subparagraphs 1. and 2. of this 4
paragraph as follows: 5
1. The person directly or indirectly: 6
a. Lists, makes available, or advertises tangible personal property, 7
digital property, or services for sale by a marketplace retailer in a 8
marketplace owned, operated, or controlled by the person; 9
b. Facilitates the sale of a marketplace retailer's product through a 10
marketplace by transmitting or otherwise communicating an offer 11
or acceptance of a retail sale of tangible personal property, digital 12
property, or services between a marketplace retailer and a 13
purchaser in a forum including a shop, store, booth, catalog, 14
Internet site, or similar forum; 15
c. Owns, rents, licenses, makes available, or operates any electronic 16
or physical infrastructure or any property, process, method, 17
copyright, trademark, or patent that connects marketplace retailers 18
to purchasers for the purpose of making retail sales of tangible 19
personal property, digital property, or services; 20
d. Provides a marketplace for making retail sales of tangible personal 21
property, digital property, or services, or otherwise facilitates retail 22
sales of tangible personal property, digital property, or services, 23
regardless of ownership or control of the tangible personal 24
property, digital property, or services, that are the subject of the 25
retail sale; 26
e. Provides software development or research and development 27 UNOFFICIAL COPY 25 RS BR 1470
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activities related to any activity described in this subparagraph, if 1
the software development or research and development activities 2
are directly related to the physical or electronic marketplace 3
provided by a marketplace provider; 4
f. Provides or offers fulfillment or storage services for a marketplace 5
retailer; 6
g. Sets prices for a marketplace retailer's sale of tangible personal 7
property, digital property, or services; 8
h. Provides or offers customer service to a marketplace retailer or a 9
marketplace retailer's customers, or accepts or assists with taking 10
orders, returns, or exchanges of tangible personal property, digital 11
property, or services sold by a marketplace retailer; or 12
i. Brands or otherwise identifies sales as those of the marketplace 13
provider; and 14
2. The person directly or indirectly: 15
a. Collects the sales price or purchase price of a retail sale of tangible 16
personal property, digital property, or services; 17
b. Provides payment processing services for a retail sale of tangible 18
personal property, digital property, or services; 19
c. Through terms and conditions, agreements, or arrangements with a 20
third party, collects payment in connection with a retail sale of 21
tangible personal property, digital property, or services from a 22
purchaser and transmits that payment to the marketplace retailer, 23
regardless of whether the person collecting and transmitting the 24
payment receives compensation or other consideration in exchange 25
for the service; or 26
d. Provides a virtual currency that purchasers are allowed or required 27 UNOFFICIAL COPY 25 RS BR 1470
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to use to purchase tangible personal property, digital property, or 1
services. 2
(b) "Marketplace provider" includes but is not limited to a person that satisfies the 3
requirements of this subsection through the ownership, operation, or control 4
of a digital distribution service, digital distribution platform, online portal, or 5
application store; 6
(26) "Marketplace retailer" means a seller that makes retail sales through any 7
marketplace owned, operated, or controlled by a marketplace provider; 8
(27) (a) "Occasional sale" includes: 9
1. A sale of tangible personal property or digital property not held or used 10
by a seller in the course of an activity for which he or she is required to 11
hold a seller's permit, provided such sale is not one (1) of a series of 12
sales sufficient in number, scope, and character to constitute an activity 13
requiring the holding of a seller's permit. In the case of the sale of the 14
entire, or a substantial portion of the nonretail assets of the seller, the 15
number of previous sales of similar assets shall be disregarded in 16
determining whether or not the current sale or sales shall qualify as an 17
occasional sale; or 18
2. Any transfer of all or substantially all the tangible personal property or 19
digital property held or used by a person in the course of such an activity 20
when after such transfer the real or ultimate ownership of such property 21
is substantially similar to that which existed before such transfer. 22
(b) For the purposes of this subsection, stockholders, bondholders, partners, or 23
other persons holding an interest in a corporation or other entity are regarded 24
as having the "real or ultimate ownership" of the tangible personal property or 25
digital property of such corporation or other entity; 26
(28) (a) "Other direct mail" means any direct mail that is not advertising and 27 UNOFFICIAL COPY 25 RS BR 1470
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promotional direct mail, regardless of whether advertising and promotional 1
direct mail is included in the same mailing. 2
(b) "Other direct mail" includes but is not limited to: 3
1. Transactional direct mail that contains personal information specific to 4
the addressee, including but not limited to invoices, bills, statements of 5
account, and payroll advices; 6
2. Any legally required mailings, including but not limited to privacy 7
notices, tax reports, and stockholder reports; and 8
3. Other nonpromotional direct mail delivered to existing or former 9
shareholders, customers, employees, or agents, including but not limited 10
to newsletters and informational pieces. 11
(c) "Other direct mail" does not include the development of billing information or 12
the provision of any data processing service that is more than incidental to the 13
production of printed material; 14
(29) "Person" includes any individual, firm, copartnership, joint venture, association, 15
social club, fraternal organization, corporation, estate, trust, business trust, receiver, 16
trustee, syndicate, cooperative, assignee, governmental unit or agency, or any other 17
group or combination acting as a unit; 18
(30) "Permanent," as the term applies to digital property, means perpetual or for an 19
indefinite or unspecified length of time; 20
(31) (a) "Photography and photofinishing services" means: 21
1. The taking, developing, or printing of an original photograph; or 22
2. Image editing, including shadow removal, tone adjustments, vertical and 23
horizontal alignment and cropping, composite image creation, 24
formatting, watermarking printing, and delivery of an original 25
photograph in the form of tangible personal property, digital property, or 26
other media. 27 UNOFFICIAL COPY 25 RS BR 1470
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(b) "Photography and photofinishing services" does not include photography 1
services necessary for medical or dental health; 2
(32) "Plant facility" means a single location that is exclusively dedicated to 3
manufacturing or industrial processing activities. A location shall be deemed to be 4
exclusively dedicated to manufacturing or industrial processing activities even if 5
retail sales are made there, provided that the retail sales are incidental to the 6
manufacturing or industrial processing activities occurring at the location. The term 7
"plant facility" shall not include any restaurant, grocery store, shopping center, or 8
other retail establishment; 9
(33) (a) "Prewritten computer software" means: 10
1. Computer software, including prewritten upgrades, that are not designed 11
and developed by the author or other creator to the specifications of a 12
specific purchaser; 13
2. Software designed and developed by the author or other creator to the 14
specifications of a specific purchaser when it is sold to a person other 15
than the original purchaser; or 16
3. Any portion of prewritten computer software that is modified or 17
enhanced in any manner, where the modification or enhancement is 18
designed and developed to the specifications of a specific purchaser, 19
unless there is a reasonable, separately stated charge on an invoice or 20
other statement of the price to the purchaser for the modification or 21
enhancement. 22
(b) When a person modifies or enhances computer software of which the person 23
is not the author or creator, the person shall be deemed to be the author or 24
creator only of the modifications or enhancements the person actually made. 25
(c) The combining of two (2) or more prewritten computer software programs or 26
portions thereof does not cause the combination to be other than prewritten 27 UNOFFICIAL COPY 25 RS BR 1470
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computer software; 1
(34) "Prewritten computer software access services" means the right of access to 2
prewritten computer software where the object of the transaction is to use the 3
prewritten computer software while possession of the prewritten computer software 4
is maintained by the seller or a third party, wherever located, regardless of whether 5
the charge for the access or use is on a per use, per user, per license, subscription, or 6
some other basis; 7
(35) (a) "Purchase" means any transfer of title or possession, exchange, barter, lease, 8
or rental, conditional or otherwise, in any manner or by any means 9
whatsoever, of: 10
1. Tangible personal property; 11
2. An extended warranty service; 12
3. Digital property transferred electronically; or 13
4. Services included in KRS 139.200; 14
for a consideration. 15
(b) "Purchase" includes: 16
1. When performed outside this state or when the customer gives a resale 17
certificate, the producing, fabricating, processing, printing, or imprinting 18
of tangible personal property for a consideration for consumers who 19
furnish either directly or indirectly the materials used in the producing, 20
fabricating, processing, printing, or imprinting; 21
2. A transaction whereby the possession of tangible personal property or 22
digital property is transferred but the seller retains the title as security 23
for the payment of the price; and 24
3. A transfer for a consideration of the title or possession of tangible 25
personal property or digital property which has been produced, 26
fabricated, or printed to the special order of the customer, or of any 27 UNOFFICIAL COPY 25 RS BR 1470
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publication; 1
(36) "Recycled materials" means materials which have been recovered or diverted from 2
the solid waste stream and reused or returned to use in the form of raw materials or 3
products; 4
(37) "Recycling purposes" means those activities undertaken in which materials that 5
would otherwise become solid waste are collected, separated, or processed in order 6
to be reused or returned to use in the form of raw materials or products; 7
(38) "Remote retailer" means a retailer with no physical presence in this state; 8
(39) (a) "Repair, replacement, or spare parts" means any tangible personal property 9
used to maintain, restore, mend, or repair machinery or equipment. 10
(b) "Repair, replacement, or spare parts" does not include machine oils, grease, or 11
industrial tools; 12
(40) (a) "Retailer" means: 13
1. Every person engaged in the business of making retail sales of tangible 14
personal property, digital property, or furnishing any services in a retail 15
sale included in KRS 139.200; 16
2. Every person engaged in the business of making sales at auction of 17
tangible personal property or digital property owned by the person or 18
others for storage, use or other consumption, except as provided in 19
paragraph (c) of this subsection; 20
3. Every person making more than two (2) retail sales of tangible personal 21
property, digital property, or services included in KRS 139.200 during 22
any twelve (12) month period, including sales made in the capacity of 23
assignee for the benefit of creditors, or receiver or trustee in bankruptcy; 24
4. Any person conducting a race meeting under the provision of KRS 25
Chapter 230, with respect to horses which are claimed during the 26
meeting. 27 UNOFFICIAL COPY 25 RS BR 1470
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(b) When the department determines that it is necessary for the efficient 1
administration of this chapter to regard any salesmen, representatives, 2
peddlers, or canvassers as the agents of the dealers, distributors, supervisors or 3
employers under whom they operate or from whom they obtain the tangible 4
personal property, digital property, or services sold by them, irrespective of 5
whether they are making sales on their own behalf or on behalf of the dealers, 6
distributors, supervisors or employers, the department may so regard them and 7
may regard the dealers, distributors, supervisors or employers as retailers for 8
purposes of this chapter. 9
(c) 1. Any person making sales at a charitable auction for a qualifying entity 10
shall not be a retailer for purposes of the sales made at the charitable 11
auction if: 12
a. The qualifying entity, not the person making sales at the auction, is 13
sponsoring the auction; 14
b. The purchaser of tangible personal property at the auction directly 15
pays the qualifying entity sponsoring the auction for the property 16
and not the person making the sales at the auction; and 17
c. The qualifying entity, not the person making sales at the auction, is 18
responsible for the collection, control, and disbursement of the 19
auction proceeds. 20
2. If the conditions set forth in subparagraph 1. of this paragraph are met, 21
the qualifying entity sponsoring the auction shall be the retailer for 22
purposes of the sales made at the charitable auction. 23
3. For purposes of this paragraph, "qualifying entity" means a resident: 24
a. Church; 25
b. School; 26
c. Civic club; or 27 UNOFFICIAL COPY 25 RS BR 1470
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d. Any other nonprofit charitable, religious, or educational 1
organization; 2
(41) "Retail sale" means any sale, lease, or rental for any purpose other than resale, 3
sublease, or subrent; 4
(42) (a) "Ringtones" means digitized sound files that are downloaded onto a device 5
and that may be used to alert the customer with respect to a communication. 6
(b) "Ringtones" does[shall] not include ringback tones or other digital files that 7
are not stored on the purchaser's communications device; 8
(43) (a) "Sale" means: 9
1. The furnishing of any services included in KRS 139.200; 10
2. Any transfer of title or possession, exchange, barter, lease, or rental, 11
conditional or otherwise, in any manner or by any means whatsoever, 12
of: 13
a. Tangible personal property; or 14
b. Digital property transferred electronically; 15
for a consideration. 16
(b) "Sale" includes but is not limited to: 17
1. The producing, fabricating, processing, printing, or imprinting of 18
tangible personal property or digital property for a consideration for 19
purchasers who furnish, either directly or indirectly, the materials used 20
in the producing, fabricating, processing, printing, or imprinting; 21
2. A transaction whereby the possession of tangible personal property or 22
digital property is transferred, but the seller retains the title as security 23
for the payment of the price; and 24
3. A transfer for a consideration of the title or possession of tangible 25
personal property or digital property which has been produced, 26
fabricated, or printed to the special order of the purchaser. 27 UNOFFICIAL COPY 25 RS BR 1470
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(c) This definition shall apply regardless of the classification of a transaction 1
under generally accepted accounting principles, the Internal Revenue Code, or 2
other provisions of federal, state, or local law; 3
(44) "Seller" includes every person engaged in the business of selling tangible personal 4
property, digital property, or services of a kind, the gross receipts from the retail 5
sale of which are required to be included in the measure of the sales tax, and every 6
person engaged in making sales for resale; 7
(45) (a) "Storage" includes any keeping or retention in this state for any purpose 8
except sale in the regular course of business or subsequent use solely outside 9
this state of tangible personal property, digital property, or prewritten 10
computer software access services purchased from a retailer. 11
(b) "Storage" does not include the keeping, retaining, or exercising any right or 12
power over tangible personal property for the purpose of subsequently 13
transporting it outside the state for use thereafter solely outside the state, or 14
for the purpose of being processed, fabricated, or manufactured into, attached 15
to, or incorporated into, other tangible personal property to be transported 16
outside the state and thereafter used solely outside the state; 17
(46) "Tangible personal property" means personal property which may be seen, 18
weighed, measured, felt, or touched, or which is in any other manner perceptible to 19
the senses and includes natural, artificial, and mixed gas, electricity, water, steam, 20
and prewritten computer software; 21
(47) "Taxpayer" means any person liable for tax under this chapter; 22
(48) "Telemarketing services" means services provided via telephone, facsimile, 23
electronic mail, text messages, or other modes of communications to another 24
person, which are unsolicited by that person, for the purposes of: 25
(a) 1. Promoting products or services; 26
2. Taking orders; or 27 UNOFFICIAL COPY 25 RS BR 1470
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3. Providing information or assistance regarding the products or services; 1
or 2
(b) Soliciting contributions; 3
(49) "Transferred electronically" means accessed or obtained by the purchaser by means 4
other than tangible storage media; and 5
(50) (a) "Use" includes the exercise of: 6
1. Any right or power over tangible personal property or digital property 7
incident to the ownership of that property, or by any transaction in 8
which possession is given, or by any transaction involving digital 9
property or tangible personal property where the right of access is 10
granted; or 11
2. Any right or power to benefit from any services subject to tax under 12
KRS 139.200(2)(p) to (ax). 13
(b) "Use" does not include the keeping, retaining, or exercising any right or 14
power over: 15
1. Tangible personal property or digital property for the purpose of: 16
a. Selling tangible personal property or digital property in the regular 17
course of business; or 18
b. Subsequently transporting tangible personal property outside the 19
state for use thereafter solely outside the state, or for the purpose 20
of being processed, fabricated, or manufactured into, attached to, 21
or incorporated into, other tangible personal property to be 22
transported outside the state and thereafter used solely outside the 23
state; or 24
2. Prewritten computer software access services purchased for use outside 25
the state and transferred electronically outside the state for use thereafter 26
solely outside the state. 27 UNOFFICIAL COPY 25 RS BR 1470
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Section 2. This Act takes effect July 1, 2025. 1