Current through Register Vol. 50, No. 6, December 1, 2023
RELATES TO:
KRS
131.155,
131.180,
131.183,
131.990, Chapter 139,
141.310
NECESSITY, FUNCTION, AND CONFORMITY:
KRS
131.130(1) authorizes the
Department of Revenue to promulgate administrative regulations for the
administration and enforcement of all tax laws of this state.
KRS
131.155(3) requires the
department to promulgate administrative regulations establishing electronic
fund transfer requirements for the payment of taxes and fees administered by
the department. This administrative regulation establishes requirements
relating to the remittance of funds to the department via electronic fund
transfer.
Section 1. Definitions.
(1) "Credit method" means the method of
payment where the taxpayer or his authorized agent initiates the transfer of
funds from the taxpayer or agent controlled account in a financial institution
to the designated Commonwealth bank account to satisfy taxes or fees
due.
(2) "Debit method" means the
method of payment where the taxpayer or his authorized agent authorizes the
Department of Revenue or its authorized agent to initiate the transfer of a set
amount of funds on a set date from a taxpayer or agent-controlled account in a
financial institution to satisfy taxes or fees due based on required
information transmitted to the department prior to the department effecting the
transfer.
(3) "Lookback period"
means the twelve (12) month period ending on September 30 of the year
immediately preceding the current calendar year. For example, the lookback
period for calendar year 2001 is the period beginning on October 1, 1999 and
ending on September 30, 2000.
Section
2. Reporting and Payment Requirements.
(1) Any taxpayer whose average payment per
reporting period during the lookback period for the sales and use tax required
to be collected or paid under KRS Chapter 139 exceeds $25,000 or any employer
whose average payment per reporting period during the lookback period for the
income tax required to be withheld under
KRS
141.310 exceeds $25,000 shall submit to the
department a properly executed Revenue Form 10A070 "Authorization Agreement for
Electronic Funds Transfer" stating the method requested to be used and upon
written approval of the method by the department shall pay the tax by
electronic fund transfer using the debit method or other method approved by the
department, including the credit method, provided the method complies with the
guidelines set out in subsection (3) of this section.
(2) Persons required by
KRS
131.155(2) to remit funds by
electronic fund transfer on behalf of other taxpayers shall conform to the
provisions of subsection (1) of this section. In addition, these persons shall,
for each taxpayer represented and for each payment period, provide the
information necessary to properly credit the account as required in subsection
(3) of this section.
(3) Execution
of any electronic fund transfer transaction shall conform to the guidelines and
procedures of each participating financial institution. Any electronic transfer
of funds shall provide information necessary to properly credit the taxpayer
account, including:
(a) Taxpayer account
number;
(b) Type tax
code;
(c) Tax period end
date;
(d) Amount of
transfer;
(e) Date of payment
transfer; and
(f) Any other
information deemed necessary by the department to properly credit the
account.
(4) The
department may withdraw approval to utilize the credit method or any method
employed other than the debit method if the taxpayer or his authorized agent
fails to provide required information necessary to effect the transfer and
credit funds to the proper taxpayer account.
(5) Any taxpayer or employer may volunteer to
pay the tax by electronic fund transfer by making a written request to the
department and, if approved by the department, shall be subject to the same
requirements as any taxpayer or employer required to electronically transfer
the tax. The taxpayer or employer shall comply with the electronic fund
transfer requirements until a written request to change methods is filed and
approved by the department.
Section
3. Alternative Payment Method.
(1) A taxpayer or authorized agent for a
taxpayer or taxpayers shall make a request to remit funds by electronic means
other than the previously approved method. This request may be either written
or oral.
(2) The department may
approve this method if extreme circumstances are demonstrated.
(3) The following information shall be
provided with the request or upon approval of the request:
(a) Reason for requesting alternate
remittance method; and
(b) Method
of remittance proposed.
Section 4. Procedures.
(1) Due date of electronic fund transfer.
(a) The due date of any electronic fund
transfer for any tax shall be governed by the applicable law and administrative
regulations pertaining to that tax.
(b) The initiation date recorded in the
automated clearing house system by the originating financial depository
institution for any electronic fund transfer shall be the payment
date.
(2) Manner of
electronic fund transfer. Separate electronic fund transfers shall be made for
each type tax account number designated as an electronic fund transfer account
under the provisions of KRS Chapter 131.
(3) Overpayment or underpayment of tax. Any
overpayment of tax may be applied toward the amount due for the next tax period
or may be refunded upon request by the taxpayer or employer. If the amount of
tax liability for a taxable period exceeds the total amount electronically
transferred for the same period, the taxpayer or employer shall pay the
additional tax due.
Section
5. Change in Reporting and Payment Requirements for Electronic
Fund Transfer. After the department makes a determination regarding a
taxpayer's or employer's reporting and payment requirements for electronic fund
transfer, the taxpayer or employer shall comply with the requirements until a
written request to change is filed with and approved by the
department.
Section 6. Penalties
and Interest. Any taxpayer or employer who fails to comply with the provisions
of this administrative regulation shall be subject to penalties as provided in
KRS
131.180 and
131.990 and interest as
provided in
KRS
131.183.
Section 7. Form 10A70 may be inspected,
copied, or obtained, subject to applicable copyright law, at the Kentucky
Department of Revenue, 501 High Street, Frankfort, Kentucky 40601, or at any
Kentucky Department of Revenue Taxpayer Service Center, Monday through Friday,
8 a.m. to 4:30 p.m. or online at https://revenue.ky.gov.
21 Ky.R. 143; Am.
911; eff. 9-12-94; Recodified as 103 KAR 1:060, 8-14-2000; Am. 27 Ky.R. 2552;
3072; eff. 5-14-2001; 46 Ky.R. 48, 862, eff.
10-4-2019.
STATUTORY AUTHORITY:
KRS
131.130,
131.155(3)