160.613 Utility gross receipts license tax -- Exemptions -- User liable if
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/ky/160-613A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
supplier is exempt -- Direct pay authorization -- Tollers. (Effective July
1, 2021)
(1)There is hereby authorized a utility gross receipts license tax for schools not to
exceed three percent (3%) of the gross receipts derived from the furnishing,
within the district, of utility services, except that "gross receipts" shall not
include amounts received for furnishing:
(a)Energy or energy-producing fuels to a person engaged in manufacturing
or industrial processing as provided in subsection
(3)or
(4)of this section,
if that person provides the utility services provider with a copy of its utility
gross receipts license tax energy direct pay authorization, as provided in
subsection
(3)of this section, and the utility service provider retains a
copy of the authorization in its records;
(b)Utility services which are to be resold; or
(c)Notwithstanding subsection
(2)of this section, electricity used or
consumed at a colocation facility in commercial mining of cryptocurrency:
1. If the facility operator provides the utility services provider with a
copy of its utility gross receipts license tax exemption certificate, as
authorized by subsection
(6)of this section, and the utility service
provider retains a copy of the exemption certificate in its records; or
2. If the utility service provider is a governmental agency, the facility
operator shall retain the exemption certificate in its records.
(2)If any user of utility services purchases the utility services directly from any
supplier who is exempt either by state or federal law from the utility gross
receipts license tax, then the user of the utility services, if the tax has been
levied in the user's school district, shall be liable for the tax and shall register
with and pay directly to the department, in accordance with the provisions of
KRS 160.615, a utility gross receipts license tax for schools computed by
multiplying the gross cost of all utility services received by the tax rate levied
under the provisions of this section.
(3)A person engaged in manufacturing or industrial processing whose cost of
energy or energy-producing fuels used in the course of manufacturing or
industrial processing exceeds an amount equal to three percent (3%) of the
cost of production may apply to the department for a utility gross receipts
license tax energy direct pay authorization. Cost of production shall be
computed on the basis of a plant facility, which shall include all operations
within the continuous, unbroken, integrated manufacturing or processing
production process that ends with a product packaged and ready for sale. If the
person receives confirmation of eligibility from the department, the person shall:
(a)Provide the utility services provider with a copy of the utility gross receipts
license tax energy direct pay authorization issued by the department for
all purchases of energy and energy-producing fuels; and
(b)Report and pay directly to the department, in accordance with the
provisions of KRS 160.615, the utility gross receipts license tax due.
(4)A person who performs a manufacturing or industrial processing activity for a
fee and does not take ownership of the tangible personal property that is
incorporated into, or becomes the product of, the manufacturing or industrial
processing activity is a toller. For periods on or after July 1, 2018, the costs of
the tangible personal property shall be excluded from the toller's cost of
production at a plant facility with tolling operations in place as of July 1, 2018.
(5)For plant facilities that begin tolling operations after July 1, 2018, the costs of
tangible personal property shall be excluded from the toller's cost of production
if the toller:
(a)Maintains a binding contract for periods after July 1, 2018, that governs
the terms, conditions, and responsibilities with a separate legal entity,
which holds title to the tangible personal property that is incorporated into,
or becomes the product of, the manufacturing or industrial processing
activity;
(b)Maintains accounting records that show the expenses it incurs to fulfill the
binding contract that include but are not limited to energy or
energy-producing fuels, materials, labor, procurement, depreciation,
maintenance, taxes, administration, and office expenses;
(c)Maintains separate payroll, bank accounts, tax returns, and other records
that demonstrate its independent operations in the performance of its
tolling responsibilities;
(d)Demonstrates one
(1)or more substantial business purposes for the
tolling operations germane to the overall manufacturing, industrial
processing activities, or corporate structure at the plant facility. A
business purpose is a purpose other than the reduction of utility gross
receipts license tax liability for the purchases of energy and
energy-producing fuels; and
(e)Provides information to the department upon request that documents
fulfillment of the requirements in paragraphs
(a)to
(d)of this subsection
and gives an overview of its tolling operations with an explanation of how
the tolling operations relate and connect with all other manufacturing or
industrial processing activities occurring at the plant facility.
(a)The operator of a colocation facility primarily engaged in the commercial
mining of cryptocurrency may apply to the department for a utility gross
receipts license tax exemption certificate. If the operator receives
confirmation of eligibility from the department, it:
1. Shall provide the utility services provider with a copy of the utility
gross receipts license tax exemption certificate issued by the
department for all purchases of electricity; or
2. Keep the certificate on file if the utility service provider is a
governmental agency.
(b)The utility gross receipts license tax exemption shall be effective from the
date of confirmation of eligibility until June 30, 2030.