In just the first few months of the 2022 tax year, we have already seen several states introduce legislation that would decrease corporate and individual income tax rates. Idaho became the first state to pass such legislation this year, on February 4. The Eversheds Sutherland SALT team expects other states to follow and will provide
Kentucky
Kentucky letter ruling says SaaS not subject to sales tax
By Jonathan Feldman, Jeremy Gove & Alla Raykin on
Posted in Digital Economy
In a recently published private letter ruling, the Kentucky Department of Revenue concluded that a taxpayer’s service via a Software as a Service (SaaS) model was not a transfer or sale of tangible personal property, and therefore not a taxable transaction. The taxpayer in the ruling charged for access and use of its web-based…
Kentucky enacts sales tax exemptions for cryptocurrency mining facilities
By Jonathan Feldman, Alla Raykin & Jeremy Gove on
Posted in Digital Economy
Effective July 1, 2021, Kentucky has enacted sales tax and utility gross receipts exemptions for certain transactions involving the commercial mining of cryptocurrency. The Kentucky DOR explained the two recently enacted bills here. HB 230 exempts the sale or purchase of electricity used or consumed in the commercial mining of cryptocurrency from sales tax and…
Several State Legislatures to Take Historic Pause Due to COVID-19 Concerns
By Samantha Trencs & Todd Lard on
Posted in In the News
With the threat of COVID-19 looming, several state legislatures will halt or temporarily suspend their legislative sessions, including: Colorado, Delaware, Connecticut, Georgia, Kentucky, Maine, Maryland, New Hampshire, and Vermont. For many states, this is an unprecedented move while in others, the legislature has not adjourned early since the Civil War. Other state legislatures, like California’s…
Kentucky Supreme Court Declines to Hear Ohio CAT Tax Dispute
By Justin Brown & Open Weaver Banks on
Posted in In the News
On December 19, 2019, the Kentucky Supreme Court found in favor of the state of Ohio on its motion to dismiss a suit brought by a taxpayer in Kentucky state court against the State of Ohio. The taxpayer received an assessment for Ohio commercial activity tax (CAT) from the Ohio Department of Taxation, based on…
Kentucky Court of Appeals Holds Parent Company Not Includible in Consolidated Return
By Jessica Eisenmenger & Scott Wright on
Posted in Income Tax
The Kentucky Court of Appeals held in an unpublished opinion that an out-of-state parent company was not an “includible corporation” as defined by Kentucky law and could not file a consolidated return with its in-state subsidiary. The Department argued that the parent company taxpayer was not an includible corporation because it fell within two exceptions…
Kentucky Court of Appeals Holds that Kentucky DOR Must Publish Final Rulings
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Posted in Policy and Legislation, Southeast
By Chris Lutz and Carley Roberts
The Kentucky Court of Appeals held that the Kentucky Department of Revenue must publish final administrative rulings, even when those rulings are not appealed to the Board of Tax Appeals. The Office of Attorney General had previously determined that the Department’s decision not to provide even redacted copies of…
Keep on Streamin’: Kentucky Court Holds Taxes Inapplicable to Streaming Video Service
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By Charles Capouet and Maria Todorova
The Franklin County Circuit Court held that Netflix’s subscription-based streaming video service was not subject to Kentucky’s gross revenues tax, excise tax and school tax (telecommunications taxes) imposed on “multichannel video programming service” (MVPS). Under Kentucky law, MVPS is programming “provided by or generally considered comparable to programming provided…
Kentucky Court of Appeals Finds Retroactive Statute Constitutional
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By Chelsea Marmor and Andrew Appleby
The Kentucky Court of Appeals held that a Kentucky statute, which retroactively reduced vendors’ 1% deduction of the sales tax collected and remitted to Kentucky to $1,500 in any monthly reporting period, did not violate the Kentucky Constitution. Wal-Mart argued that the statute violated the Kentucky Constitution because the…
Kentucky Must Ride on Noah’s Ark: Denial of Tax Incentives to Religious-Based Theme Park Reversed
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Posted in Noteworthy Cases, Southeast
By Stephanie Do and Todd Lard
The U.S. District Court for the Eastern District of Kentucky preliminarily enjoined Kentucky from denying tax incentives to a religious-based theme park. The court held that excluding the company from the state’s tax incentives program on the basis of the company’s religious beliefs, message and conduct violated the Establishment and…