Request By:
Mr. Arnd Rehfuss, Advisor
Future Business Leaders of America
Campbell County High School
8000 Alexandria Pike
Alexandria, Kentucky 41001
Opinion
Opinion By: Robert F. Stephens, Attorney General; By: William S. Riley, Assistant Attorney General
In your recent letter to the Attorney General it is stated that the Campbell County Chapter of Future Business Leaders of America sells certain items to students of Campbell County High School. The funds are used for leadership camp, field trips, regional and state meetings, scholarship funds and campaign expenses.
The question is whether sales tax is due on such items.
KRS 139.495(b) provides that sales made by educational, religious and charitable institutions are taxable and the tax may be passed on to the customer as provided by KRS 139.210. The exception is where cafeterias or lunchrooms operated by an educational institution are not open to the public. In such cases sales tax does not apply to food to students.
KRS 139.496(1) provides an exemption for the first $500 of sales made in any calendar year by individuals or nonprofit organizations not engaged in the regular business of selling.
If the Future Business Leaders of America conduct sales on a regular basis, they are required to collect sales tax on such sales.
Exempt institutions regularly engaged in a selling activity are required to hold a sales and use tax permit, file returns and pay the tax due on gross receipts.
Any additional questions you may have concerning this matter please direct them to Claude B. Slone, Director, Sales and Severance Tax Division, Department of Revenue, Frankfort, Kentucky 40601.