In an attempt to collect the state use tax Kentucky recently joined a handful of other states that require out-of-state vendors selling products in Kentucky to now notify purchasers of their obligation to report and pay the state use tax. Primarily targeted at online buyers the notification to pay state use tax is now to be included on the retailer’s website retail catalog and invoices. This bill effects retailers who expect less than $100000 in gross sales to Kentucky residents and businesses in the current calendar year.
The retailer can provide a reference to a supplemental page or link on their website that contains the required use tax notification language. The reference must state “See important Kentucky sales and use tax information regarding tax you may owe directly to the Commonwealth of Kentucky.” Retailers are also prohibited from implying or stating on their website or in their promotional material that there is no Kentucky tax due on purchases made from them as a retailer. http://report.saltcpa.com/2013/04/kentucky-remote-seller-notice-requirement€¦
In other changes all Vendor compensation credit for the collection and remission of sales and use tax has been increased from 1% to 1.5%. Sellers can take this deduction on each tax return due beginning July 1 2013 that is in excess of $1000. In addition the total compensation allowed for each retailer in any reporting period has been reduced from $1500 to $50.
If your business have questions about the new Kentucky Use Tax Notification feel free to contact Lindemeyer CPA. Our firm can help walk you through how this could affect you.