Beginning Jan. 1, 2023, Kentucky law requires sales tax to be charged for residential utility services furnished to any location that is not your place of domicile (basically, not your primary residence). The Kentucky Department of Revenue provides more details and answers to frequently asked questions about the new law online:
“Due to the passing of House Bill 8, sewer services, water and fuel, including natural gas and electricity, will be taxable after the first of the year. Only utilities at primary residences can be exempted.
In most cases, only one of your addresses will qualify for a residential exemption as your place of domicile. If you are a landlord or owner of a multi-unit dwelling, you should contact your utility service providers for further information.
Local utilities are responsible for enforcing the new state law.
If you only have one residential address and it is a single-family residence, you will continue to receive the sales tax exemption and do not need to file anything additional at this time.
Most customers are exempt with no action needed. Most of the area utility companies are communicating with customers directly who are impacted by the new state law.”
How will House Bill 8 affect you?
House Bill 8 will not affect individuals with only one residential utility account at each utility company. For example, if you have only one account for your primary residence, you have not been paying sales tax and will not be affected by these tax changes. Those in this situation do not need to take any further action with their utility providers.
Existing single-account residential customers do not need to complete the respective utility tax exemption form (i.e., KU, Kentucky American Water, Columbia Gas, etc.). After January 1, if there is activity on your account (i.e. transfer of service when moving to a new residence), the form will be required.
If you have further questions, contact your residential utilities service provider(s).
This article appears on pages 20-21 of the January 2023 edition of Ace. To subscribe, click here.