Request By:
Mr. Jerry A. Kasperski
Ski Enterprises Incorporated
P.O. Box 36131
Louisville, Kentucky 40233
Opinion
Opinion By: Steven L. Beshear, Attorney General; By Alex W. Rose, Assistant Attorney General
In your letter of January 15, 1982, you asked whether the Kentucky sales tax applied to the purchase of products which are ordered by mail or telephone from out of state companies and which are subsequently shipped into Kentucky by those companies.
The Kentucky sales tax is imposed upon all retailers within the Commonwealth for the privilege of making sales of services, facilities or tangible personal property as defined in KRS Chapter 139. The amount of the sales tax is measured by the retailer's gross receipts. While the sales tax may be collected from the consumer, the legal incidence of this tax is placed on the retailer.
Marcum v. Louisville Municipal Housing Comm., Ky., 374 S.W.2d 865 (1963).
KRS Chapter 139 also imposes a use tax on "the storage, use or other consumption in this state of tangible personal property. " The legal incidence of the use tax is upon the purchaser as provided in KRS 139.330. Pursuant to KRS 139.500, the storage, use or consumption of property in Kentucky is not subject to the use tax in any instance in which the sales tax has been levied on the sale of that property.
An out of state company which is not engaged in business in this state may collect the use tax on sales to Kentucky purchasers and remit this tax to the Commonwealth. The collection of the use tax by such a company, however, is completely voluntary. When an out of state company declines to collect the Kentucky use tax, the Kentucky purchaser is required by law to file a return and pay the five percent (5%) use tax to the Commonwealth.
In summary, the Kentucky sales tax does not apply to the sale of products when these products are ordered from out of state retailers and shipped into Kentucky. However, the Kentucky purchaser is required to pay the use tax on such purchases whether such payment is remitted directly to the Commonwealth or through the out of state retailer.