Request By:
Mr. Arnd M. Rehfuss, Chairman
Business Education Department
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 clarification is requested regarding the tax status of a high school paying tax on the sales which it conducts.
KRS 139.495 which became effective March 29, 1967 provides that sales tax does not apply to sales of tangible personal property or services to such institutions provided the property or service is to be used solely within the exempt function of such institutions. Sales made by the institution are taxable and the tax may be passed on to the customer. Where cafeterias are not open to the public, tax does not apply to sales of food to students.
Educational institutions making sales must hold a sales and use tax permit and report and pay tax to the department. All schools, churches and related organizations have been informed of their tax obligations.
Since sales tax can be collected from the customer, the economic incidence of the tax is not on the school, church or other organization. In such cases, it is not necessary for the institution to direct any funds used in financing its programs to payment of the tax.
We are enclosing Form 51D011, mailed to all educational institutions in the state, explaining the proper application of the tax.
If you have additional questions concerning the application of this tax to your operation, please direct them to Claude Slone, Director, General Property Tax Division, Department of Revenue, Frankfort, Kentucky 40601.