KRS 243.884: Wholesale sales tax imposed -- Rates -- Report and payment --

Exemptions.

(1) (a) For the privilege of making "wholesale sales" or "sales at wholesale" of malt

beverages, wine, distilled spirits, or cannabis -infused beverages, a tax is

hereby imposed upon all wholesalers of wine and distilled spirits, all

distributors of malt beverages or cannabis -infused beverages, all direct

shipper licensees shipping alcoholic beverages or cannabis -infused beverages

to a consumer at a Kentucky address , all distillers making sales pursuant to

KRS 243.0305(3), (4)(a)1. and 2. and (c), (7), (9), (10), (12), and (13), all

microbreweries selling malt beverages under KRS 243.157, all small farm

wineries selling wine under KRS 243.155, and all manufacturers o f cannabis-

infused beverages permitted by the Department for Public Health.

(b) Prior to July 1, 2015, the tax shall be imposed at the rate of eleven percent

(11%) of the gross receipts of any wholesaler or distributor derived from

"sales at wholesale" or "wholesale sales" made within the Commonwealth,

except as provided in subsection (3) of this section. For the purposes of this

section, the gross receipts of a microbrewery making "wholesale sales" shall

be calculated by determining the dollar value amount that the microbrewer

would have collected had it conveyed to a distributor the same volume sold to

a consumer as allowed under KRS 243.157(3)(b) and (c).

(c) The following rates shall apply to wholesale sales or sales at wholesale:

1. For distilled spirit s and cannabis -infused beverages, eleven percent

(11%); and

2. For wine and malt beverages, ten percent (10%).

(d) The following rates shall apply for direct shipper sales:

1. For distilled spirits and cannabis -infused beverages shipments, eleven

percent (11%) for wholesale sales or sales at wholesale; and

2. For wine and malt beverage shipments, ten percent (10%) for wholesale

sales or sales at wholesale.

(e) For direct shipper sales or sales made pursuant to KRS 243.0305, if a

wholesale price is not readily available, the direct shipper licensee or distillery

shall calculate the wholesale price to be seventy percent (70%) of the retail

price of the alcoholic beverages.

(2) Wholesalers of distilled spirits and wine, distributors of malt beverages or cannabis-

infused beverages, microbreweries, distillers, manufacturers of cannabis -infused

beverages permitted by the Department for Public Health, and direct shipper

licensees shall pay and report the tax levied by this section on or before the

twentieth day of the calendar month next succeeding the month in which possession

or title of the distilled spirits, wine, malt beverages, or cannabis -infused beverages

is transferred from the wholesaler or distributor to retailers, or by microbreweries,

distillers, manufacturers of cannabis -infused beverages permitted by the

Department for Public Health, or direct shipper licensees to consumers in this state,

in accordance with administrative regulations promulgated under KRS Chapter 13A

designed reasonably to protect the revenues of the Commonwealth.

(3) Gross receipts from sales at wholesale or wholesale sales shall not include the

following sales:

(a) Sales made between whole salers, between distributors, or between

manufacturers of cannabis-infused beverages permitted by the Department for

Public Health;

(b) Sales from the first fifty thousand (50,000) gallons of wine produced by a

small farm winery in a calendar year made by:

1. The small farm winery; or

2. A wholesaler of that wine produced by the small farm winery; and

(c) Sales made between a direct shipper licensee and a consumer located outside

of Kentucky.