While there’s been confusion and speculation about who is affected by an amended Kentucky sales tax law that applies to utility services, it essentially boils down to this: residents with utility services at a single property aren’t affected and don’t have to fill out any forms; those with services at multiple properties have some work to do to avoid being assessed state sales tax.
The change to utility billing was introduced through House Bill 8 during the 2022 Regular Legislative Session. Gov. Andy Beshear’s veto of the bill was overridden 72-25 in the House and 28-8-1 in the Senate.
Beginning January 1, 2023, residential utilities will be taxable for any property location that is not utilized and declared as a primary residential domicile.
Residents with a utility service in their name at only one occupied location are not required to submit any forms.
However, residents with a utility service in their name at more than one occupied property must fill out either a “Declaration of Domicile” form or a “Multi-Unit Declaration of Domicile” form depending on the type of property. In order for the additional properties to also be sales tax exempt:
- Landlords holding utility accounts for single and multi-unit residential rental properties may have tenants fill out the “Declaration of Domicile” form to classify the rental property as a residential account.
- Landlords must submit a completed “Multi-Unit Declaration of Domicile” form along with the individual tenant domicile forms to qualify for the residential exemption.
An exemption form must be completed for every utility service provider, though they all use the same general form. There’s no hard deadline for when the forms need to be filled out, but providers urge customers to complete them sooner than later as the taxes can start being collected on January 1.
The Kentucky Department of Revenue has published some basic guidance and FAQs here. For more questions, contact the department at 502-564-5170 or [email protected].
Anyone with questions about whether or not they need to fill out a form are also encouraged to first contact their utility provider.
