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AN ACT relating to a sales and use tax holiday. 1
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 2
SECTION 1. A NEW SECTION OF KRS CHAPTER 139 IS CREATED TO 3
READ AS FOLLOWS: 4
(1) As used in this section: 5
(a) "Clothing" means all human wearing apparel suitable for general use: 6
1. "Clothing" includes but is not limited to: 7
a. Aprons, household and shop; 8
b. Athletic supporters; 9
c. Bathing suits and caps and beach capes and coats; 10
d. Belts and suspenders; 11
e. Boots, overshoes, shoes, steel-toed shoes, sandals, slippers, 12
sneakers, and shoelaces and insoles for shoes; 13
f. Coats and jackets; 14
g. Costumes; 15
h. Disposable and cloth diapers for children or adults and rubber 16
pants; 17
i. Formal wear; 18
j. Garters, garter belts, and girdles; 19
k. Gloves and mittens for general use; 20
l. Hats, caps, ear muffs, and scarves; 21
m. Hosiery, pantyhose, socks, footlets, and stockings; 22
n. Lab coats; 23
o. Neckties; 24
p. Rainwear; 25
q. Underwear; 26
r. Uniforms, athletic and nonathletic; and 27 UNOFFICIAL COPY 25 RS BR 1784
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s. Wedding apparel. 1
2. "Clothing" does not include: 2
a. Belt buckles sold separately; 3
b. Costume masks sold separately; 4
c. Patches and emblems sold separately; 5
d. Sewing equipment and supplies, including but not limited to 6
knitting needles, patterns, pins, scissors, sewing needles, tape 7
measures, and thimbles; and 8
e. Sewing materials that become part of "clothing," including but 9
not limited to buttons, fabric, lace, thread, yarn, and zippers; 10
(b) 1. "Clothing accessories or equipment" means items worn on the person 11
or in conjunction with clothing and is mutually exclusive of apparel 12
within the definitions of "clothing," "protective equipment," and 13
"sport or recreational equipment." 14
2. "Clothing accessories or equipment" includes but is not limited to: 15
a. Briefcases; 16
b. Cosmetics; 17
c. Hair notions, including but not limited to barrettes, hair bows, 18
and hair nets; 19
d. Handbags; 20
e. Jewelry; 21
f. Nonprescription sunglasses; 22
g. Umbrellas; 23
h. Wallets; 24
i. Watches; and 25
j. Wigs and hair pieces; 26
(c) "Computer" means an electronic device that accepts information in digital 27 UNOFFICIAL COPY 25 RS BR 1784
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or similar form and manipulates it for a result based on a sequence of 1
instructions; 2
(d) "Eligible property" means any item of a type that qualifies for a sales tax 3
holiday exemption; 4
(e) "Layaway sale" means a transaction in which property is set aside for 5
future delivery to a customer who makes a deposit, agrees to pay the 6
balance of the purchase price over a period of time, and, at the end of the 7
payment period, receives the property. An order is accepted for layaway by 8
the seller when the seller removes the property from normal inventory or 9
clearly identifies the property as sold to the purchaser; 10
(f) "Menstrual discharge collection devices" means tampons, panty liners, 11
menstrual cups, pads, and other similar tangible personal property designed 12
for use in connection with the human menstrual cycle, but does not include 13
"grooming and hygiene products" as defined in KRS 139.472; 14
(g) 1. "Protective equipment" means items for human wear that are 15
designed to protect the wearer or other persons against injury or 16
disease or to protect property from damage but is not suitable for 17
general use. "Protective equipment" is mutually exclusive of apparel 18
within the definition of "clothing," "clothing accessories or 19
equipment," and "sport or recreational equipment." 20
2. "Protective equipment" includes but is not limited to: 21
a. Breathing masks; 22
b. Clean room apparel and equipment; 23
c. Ear and hearing protectors; 24
d. Face shields; 25
e. Hard hats and helmets; 26
f. Paint or dust respirators; 27 UNOFFICIAL COPY 25 RS BR 1784
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g. Protective gloves; 1
h. Safety glasses and goggles; 2
i. Safety belts; 3
j. Tool belts; and 4
k. Welder's gloves and masks; 5
(h) "Purchase" has the same meaning as in KRS 139.010, excluding lease or 6
rental as defined in KRS 139.010; 7
(i) "Rain check" means the seller allows a customer to purchase an item at a 8
certain price at a later time because the particular item was out of stock; 9
(j) "Sale" has the same meaning as in KRS 139.010, excluding lease or rental 10
as defined in KRS 139.010; 11
(k) "Sales tax holiday" means the period beginning 12:01 a.m. on the first 12
Friday in August and ending at 12 midnight the following Sunday each 13
year; 14
(l) "School art supplies" means and is limited to: 15
1. The following paints: 16
a. Acrylic; 17
b. Tempera; and 18
c. Oil; 19
2. Clay and glazes; 20
3. Paintbrushes for artwork; 21
4. Sketch pads and drawing pads; and 22
5. Watercolors; 23
(m) "School computer supplies" means and is limited to: 24
1. Computer storage media, including diskettes and compact disks; 25
2. Handheld electronic schedulers, except devices that are cellular 26
phones; 27 UNOFFICIAL COPY 25 RS BR 1784
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3. Computer printers; and 1
4. Printer supplies for computers, including printer paper and printer 2
ink; 3
(n) "School supplies" means and is limited to: 4
1. Binders; 5
2. Book bags; 6
3. Calculators; 7
4. Cellophane tape; 8
5. Blackboard chalk; 9
6. Compasses, protractors, and rulers; 10
7. Composition books, legal pads, writing tablets, and notebooks; 11
8. Crayons, pens, pencils, and erasers; 12
9. Pencil sharpeners, pencil boxes, and school supply boxes; 13
10. Highlighters and markers; 14
11. Glue, paste, and paste sticks; 15
12. Index cards and index card boxes; 16
13. Folders, whether expandable, pocket, plastic, or manila; 17
14. Lunch boxes; 18
15. Scissors; and 19
16. Writing paper, loose-leaf ruled notebook paper, copy paper, graph 20
paper, tracing paper, manila paper, colored paper, poster board, and 21
construction paper; and 22
(o) 1. "Sport or recreational equipment" means items that are designed for 23
human use and worn in conjunction with an athletic or recreational 24
activity and that are not suitable for general use. "Sport and 25
recreational equipment" are mutually exclusive of apparel within the 26
definition of "clothing," "clothing accessories or equipment," and 27 UNOFFICIAL COPY 25 RS BR 1784
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"protective equipment." 1
2. "Sport and recreation equipment" includes but is not limited to: 2
a. Ballet and tap shoes; 3
b. Cleated or spiked athletic shoes; 4
c. Gloves, including but not limited to baseball, bowling, boxing, 5
hockey, and golf; 6
d. Goggles; 7
e. Hand and elbow guards; 8
f. Life preservers and vests; 9
g. Mouth guards; 10
h. Roller and ice skates; 11
i. Shin guards; 12
j. Shoulder pads; 13
k. Ski boots; 14
l. Waders; and 15
m. Wetsuits and fins. 16
(2) Notwithstanding any other provision of this chapter to the contrary, the taxes 17
imposed by this chapter shall not apply to the sale or purchase of the following 18
during a sales tax holiday: 19
(a) Clothing with a sales price of less than one hundred dollars ($100) per item; 20
(b) School supplies; 21
(c) School art supplies; 22
(d) Computers with a sales price of less than one thousand five hundred dollars 23
($1,500) per item; 24
(e) School computer supplies with a sales price of less than five hundred 25
dollars ($500) per item; and 26
(f) Menstrual discharge collection devices. 27 UNOFFICIAL COPY 25 RS BR 1784
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(3) The clothing exemption provided in subsection (2)(a) of this section shall not 1
include: 2
(a) Clothing accessories or equipment; 3
(b) Protective equipment; or 4
(c) Sport or recreational equipment. 5
(4) The exemption provided in this section shall be subject to the following 6
provisions: 7
(a) The sale of eligible property shall qualify for exemption if: 8
1. The property is both delivered to and paid for by the purchaser during 9
the sales tax holiday exemption period; or 10
2. The purchaser orders and pays for the eligible property, and the seller 11
accepts the order, during the sales tax holiday for immediate 12
shipment, even if delivery is made after the sales tax holiday. The 13
seller accepts the order when the seller has taken action to fill the 14
order for immediate shipment. Actions to fill an order include 15
placement of an "in date" stamp on a mail order or assignment of an 16
"order number" to an order submitted by telephone or electronically. 17
An order is for immediate shipment when the customer does not 18
request delayed shipment. An order is for immediate shipment, 19
notwithstanding that the shipment may be delayed because of a 20
backlog of orders or because stock is currently unavailable to, or on 21
back order by, the seller; 22
(b) A sale of eligible property under a layaway sale qualifies for exemption 23
under this section if: 24
1. Final payment on a layaway order is made by, and the eligible 25
property is given to, the purchaser during the sales tax holiday; or 26
2. The purchaser selects the eligible property, and the retailer accepts the 27 UNOFFICIAL COPY 25 RS BR 1784
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order for the property, during the sales tax holiday, for immediate 1
delivery upon full payment, even if delivery is made after the sales tax 2
holiday; 3
(c) 1. A discount by the seller reduces the sales price of the property and the 4
discounted sales price determines whether the sales price is within the 5
sales tax holiday price threshold. 6
2. A coupon that reduces the sales price is treated as a discount if the 7
seller is not reimbursed for the coupon amount by a person other than 8
the purchaser. 9
3. If a discount applies to the total amount paid by a purchaser, rather 10
than to the sales price of a particular item, and the purchaser has 11
purchased both eligible property and taxable property, the seller shall 12
allocate the discount based on the total sales price of the taxable 13
property compared to the total sales price of all property sold in that 14
same transaction; 15
(d) Articles that are normally sold as a single unit shall continue to be sold in 16
that manner. Articles that are normally sold as a single unit, such as a pair 17
of shoes, shall not be priced and sold separately in order to obtain the 18
exemption; 19
(e) Eligible property purchased with the use of a rain check during the sales tax 20
holiday shall qualify for the exemption regardless of when the rain check 21
was issued. Issuance of a rain check during the sales tax holiday shall not 22
qualify the eligible property for the exemption if the property is actually 23
purchased after the sales tax holiday; 24
(f) The procedure for an exchange of eligible property shall be as follows: 25
1. If an item of eligible property is purchased during the sales tax 26
holiday, but the purchaser later exchanges the item for similar eligible 27 UNOFFICIAL COPY 25 RS BR 1784
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property, even if a different size, different color, or other feature, no 1
additional tax is due, even if the exchange is made after the sales tax 2
holiday; 3
2. If an item of eligible property is purchased during the sales tax 4
holiday, but the purchaser returns the item and receives credit on the 5
purchase of a different item, the appropriate sales tax is due on the 6
sale of the newly purchased item if not otherwise exempt under this 7
chapter; and 8
3. If an item of eligible property is purchased during the sales tax 9
holiday, but during the sales tax holiday the purchaser returns the 10
item and receives credit on the purchase of a different item of eligible 11
property, no sales tax is due on the sale of the new item if the new item 12
is purchased during the sales tax holiday; 13
(g) Delivery charges as defined in KRS 139.010 shall be included in the sales 14
price of eligible property. For purposes of determining a sales tax holiday 15
price threshold, if all property in a shipment is eligible property and within 16
the sales tax holiday price threshold, then the seller is not required to 17
allocate the delivery charges to determine whether the price threshold is 18
exceeded, and the shipment shall be considered a sale of eligible property. If 19
a shipment includes eligible property and taxable property, including 20
eligible property with a sales price in excess of the price threshold, the seller 21
shall allocate the delivery charges by using: 22
1. A percentage based on the total sales price of the taxable property 23
compared to the total sales price of all property in the shipment; or 24
2. A percentage based on the total weight of the taxable property 25
compared to the total weight of all property in the shipment. The seller 26
shall tax the percentage of the delivery charge allocated to the taxable 27 UNOFFICIAL COPY 25 RS BR 1784
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property, but the seller is not required to tax the percentage allocated 1
to the eligible property; 2
(h) 1. If, within sixty (60) days immediately following the sales tax holiday, a 3
purchaser returns an item to the seller that would have qualified as 4
exempt eligible property if purchased during the sales tax holiday, the 5
seller may issue a credit or refund of the tax paid only if: 6
a. The purchaser provides to the seller a receipt or invoice 7
indicating that the tax was paid; or 8
b. The seller has sufficient documentation that indicates that sales 9
tax was paid on the specific returned item. 10
2. The sixty (60) day time period is not intended to change a seller's 11
policy on the time period during which the seller will accept returns; 12
and 13
(i) If the purchaser and the seller are located in different time zones, the time 14
zone of the seller's location determines the authorized time period 15
applicable to the sales tax holiday. 16
Section 2. Whereas Kentucky is a full member state of the Streamlined Sales 17
and Use Tax Agreement, a multistate agreement providing for simplification of the 18
nation's varying sales tax laws, and whereas Kentucky is required by the agreement to 19
provide notification to both sellers and purchasers located within and without Kentucky 20
of the implementation of a sales tax holiday exemption period at least 60 days prior to the 21
first day of the calendar month in which the exemption period will begin, an emergency 22
is declared to exist, and this Act takes effect May 1, 2025. 23