{"data":{"id":"us-ky/krs-139.505","jurisdiction":"us-ky","citation":"KRS 139.505","heading":"Refundable credit of portion of sales tax paid on interstate business","body":"communications service.\n(1) For the purpose of this section, \"gross receipts\" means:\n(a) Sales of tangible personal property in this state if:\n1. The property is delivered or shippe d to a purchaser, other than the\nUnited States government, or to the designee of the purchaser within this\nstate regardless of the f.o.b. point or other conditions of the sale; or\n2. The property is shipped from an office, store, warehouse, factory, or\nother place of storage in this state and the purchaser is the United States\ngovernment; and\n(b) Sales other than sales of tangible personal property in this state if the income -\nproducing activity is performed in this state; or the income -producing activity\nis performed both in and outside this state and a greater proportion of the\nincome-producing activity is performed in this state than in any other state,\nbased on cost of performance, or gross receipt allocation method as provided\nby statute and elected by the taxpayer.\n(2) Any business whose interstate communications service, subject to the sales tax\nimposed under KRS Chapter 139 and deducted for federal income tax purposes,\nexceeds five percent (5%) of the business's Kentucky gross receipts during the\npreceding calendar year is entitled to a refundable credit if:\n(a) The business's annual Kentucky gross receipts are equal to or more than one\nmillion dollars ($1,000,000); and\n(b) The majority of the interstate communications service billed to a Kentucky\nservice address for the annual period is for communications service\noriginating outside of this state and terminating in this state.\n(3) The refundable credit shall be equal to the sales tax paid on the difference by which\nthe interstate communications service purchased by the business exceeds five\npercent (5%) of the business's Kentucky gross receipts.\n(4) Any business that qualifies for the refundable credit authorized by subsection (2) of\nthis section shall make an annual application for the refund on or after June 1, 2002,\nand on or after every June 1 thereafter. The application shall be made to the\ndepartment on forms as the department may prescribe and shall contain information\nregarding interstate communications service purchases and any other information\ndeemed necessary for the department to determine the business's eligibility to\nreceive a refund.\n(5) Notwithstanding the provisions of KRS 134.580 to the contrary, the department,\nupon receipt of a properly documented refund application, shall cause a time ly\nrefund to be made directly to the eligible business. Interest shall not be allowed or\npaid on any refund made under this section.\n(6) To facilitate the administration of the refundable tax credit, the department shall\ngrant eligible businesses that appl y for the tax credit permission to directly report\nand pay the sales tax applicable to the purchase of communications service. Once\nthe business receives permission to directly report and pay the tax, refunds issued\naccording to subsection (2) of this sect ion shall not include any sales tax collected\nand paid by a communications service provider.\n(7) Any refund application submitted under this section is subject to examination by the\ndepartment. The examination shall occur within four (4) years from the date the\nrefund application is received by the department. Any overpayment resulting from\nthe examin ation shall be repaid to the State Treasury. In addition, the amount\nrequired to be repaid is subject to the interest provisions of KRS 131.183 and to the\npenalty provisions of KRS 131.180.\n(8) If a business owns directly or indirectly fifty percent (50%) or more of another\nbusiness, the credit computed under subsection (2) of this section shall be computed\non a combined basis, excluding any intercompany Kentucky gross receipts.","path":["KRS Chapter 139"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=28907","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:50:32Z","sha256":"b49a180d953727cc89bb89470f8b6fd821e951e05d7190502fd951f6b1af3f5d","source_id":"us-ky","stale":false,"prev":"us-ky/krs-139.500","next":"us-ky/krs-139.510"},"notice":"GroundRules: Original legal text. Not legal advice."}