{"data":{"id":"us-ky/krs-139.270","jurisdiction":"us-ky","citation":"KRS 139.270","heading":"Resale certificate and certificates of exemption.","body":"(1) The  resale certificate, certificate of exemption, agriculture exemption license\nnumber,  or Streamlined Sales and  Use  Tax  Agreement  Certificate of\nExemption relieves the retailer or seller from the burden of proof if the retailer\nor seller:\n(a) Within ninety (90) days after the date of sale:\n1. Obtains a fully completed resale certificate, certificate of exemption,\nor  Streamlined Sales and  Use  Tax  Agreement  Certificate of\nExemption;\n2. Obtains  an  agriculture exemption  license number  from  the\npurchaser or a fully completed Streamlined Sales and Use  Tax\nAgreement  Certificate of Exemption that contains an agriculture\nexemption license number; or\n3. Captures  the relevant data elements that correspond to the\ninformation that the purchaser would otherwise provide to the\nretailer or seller on the Streamlined Sales and Use Tax Agreement\nCertificate of Exemption; and\n(b) Maintains a file of the certificate, agriculture exemption license number, or\nStreamlined Sales and Use  Tax Agreement  Certificate of Exemption\nobtained or relevant data elements captured in accordance with KRS\n139.720.\n(2) The relief from liability provided to the retailer or the seller in this section does\nnot apply to a retailer or seller who:\n(a) Fraudulently fails to collect the tax;\n(b) Solicits purchasers to participate in the unlawful claiming of an\nexemption; or\n(c) Accepts  an  exemption  certificate when  the purchaser claims an\nentity-based exemption when:\n1. The  product sought to be covered by the exemption certificate is\nactually received by the purchaser at a location operated by the\nretailer or seller; and\n2. The  state in which that location resides provides an exemption\ncertificate that clearly and affirmatively indicates that the claimed\nexemption is not available in that state.\nFor  purposes of this paragraph, \"entity-based exemption\" means  an\nexemption based on who purchases the product or who sells the product.\nAn  exemption available to all individuals shall not be considered an\nentity-based exemption.\n(3) (a) If the department requests that the seller or retailer substantiate that the\nsale was a sale for resale or an exempt sale and the retailer or seller has\nnot complied with subsection (1) of this section, the seller or retailer shall\nbe relieved of any liability for the tax on the transaction if the seller or\nretailer, within one  hundred twenty (120) days of the department's\nrequest:\n1. Obtains a fully completed resale certificate, exemption certificate,\nagriculture exemption license number, or Streamlined Sales and\nUse  Tax Agreement Certificate of Exemption from the purchaser for\nan exemption that:\na. Was  available under this chapter on the date the transaction\noccurred;\nb. Could be applicable to the item being purchased; and\nc. Is reasonable for the purchaser's type of business; or\n2. Obtains other information establishing that the transaction was not\nsubject to the tax.\n(b) Notwithstanding paragraph (a) of this subsection, if the department\ndiscovers through the audit process that the seller or retailer had\nknowledge  or had reason to know  at the time the information was\nprovided that the information relating to the exemption claimed was\nmaterially false, or the seller or retailer otherwise knowingly participated in\nactivity intended to purposefully evade the tax that is properly due on the\ntransaction, the seller or retailer shall not be relieved of the tax on the\ntransaction. The department shall bear the burden of proof that the seller\nor retailer had knowledge or had reason to know  at the time the\ninformation was provided that the information was materially false.\n(4) Notwithstanding subsections (1) and (3) of this section, the seller or retailer\nmay  still offer additional documentation that is acceptable by the department\nthat the transaction is not subject to tax and to relieve the seller or retailer from\nthe tax liability.\n(5) If the department later finds that the retailer or seller complied with subsections\n(1), (3), and (4) of this section, but that the purchaser used the property or\nservice in a manner  that would not have qualified for resale status or the\npurchaser issued a certificate of exemption, an agriculture exemption license\nnumber,  or a Streamlined Sales and  Use  Tax  Agreement  Certificate of\nExemption and used the property or service in some other manner or for some\nother purpose, the department shall hold the purchaser liable for the remittance\nof the tax originally due and may apply penalties provided in KRS 139.990.","path":["KRS Chapter 139"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=52085","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:50:31Z","sha256":"3e4ab22fa89c43b0b124960cae70bb3744e3c4244d1594e12c3eeaaf34c80ad4","source_id":"us-ky","stale":false,"prev":"us-ky/krs-139.260","next":"us-ky/krs-139.280"},"notice":"GroundRules: Original legal text. Not legal advice."}