Current through Register Vol. 50, No. 9, March 1, 2024
RELATES TO:
KRS
139.010,
139.200,
139.260,
139.290,
139.480,
42 U.S.C.
12101
NECESSITY, FUNCTION, AND CONFORMITY:
KRS
131.130(1) authorizes the
Department of Revenue to promulgate administrative regulations for the
assessment, collection, refunding, administration, and enforcement of Kentucky
tax laws. This administrative regulation interprets the sales and use tax law
as it applies to transactions involving veterinarians and pet care service
providers.
Section 1. Definitions.
(1) "Pet care services" means non-medical
services performed for the benefit of pets and other companion animals such as
the services listed in
KRS
139.200.
(2) "Small animal veterinary services" means:
(a) All activities related to the wellness,
diagnosis, or treatment of pets and other companion animals performed by
veterinarians or other persons in support of the veterinary services provided;
and
(b) Does not include veterinary
services that are excluded under
KRS
139.200.
Section 2. Small Animal Veterinary Services.
(1) Small animal veterinary services are
subject to sales tax pursuant to
KRS
139.200.
(2) The list in this subsection shall serve
as general examples of small animal veterinary services:
(a) Bloodwork;
(b) Dentistry and teeth cleaning;
(c) Emergency care;
(d) Euthanasia services (excluding
cremation);
(e) Health and wellness
examinations;
(f) Laboratory
testing and examination of lab work;
(g) Surgical procedures;
(h) Prescriptions for medicines and
treatments;
(i) Preventive
care;
(j)
Spaying/neutering;
(k)
Vaccinations; or
(l) X-rays and
ultrasounds.
Section
3. Animals Treated by Small Animal Veterinary Service Providers.
The list in this section shall serve as general examples of the types of
animals treated by small animal veterinary service providers:
(1) Birds, except poultry and ratite
birds;
(2) Cats;
(3) Dogs;
(4) Ferrets;
(5) Gerbils;
(6) Guinea pigs;
(7) Hamsters;
(8) Rabbits;
(9) Reptiles; or
(10) Turtles.
Section 4. Tangible Personal Property,
Digital Property, or Services Purchased by Small Animal Veterinary Service
Providers for Resale.
(1) Effective July 1,
2018, a small animal veterinary service provider may purchase tangible personal
property or digital property, which is for resale to an end customer, exempt
from the sales and use tax according to the provisions of
KRS
139.260. Examples include items such as:
(a) Items sold at retail, such as
prescription and non-prescription dog food, animal shampoos, collars and
toys;
(b) Medicines, vaccines,
surgical sutures, flea treatments, and anesthetics injected into or remaining
with the animal; and
(c) Food
supplied to the animals while under veterinary care or while providing pet care
services exempt for resale.
(2) Effective July 1, 2019, a small animal
veterinary service provider may purchase small animal veterinary services
exempt for resale to the end customer according to the provisions of
KRS
139.260. An example of a service for resale
is a lab-testing service which is requested by a small animal veterinary
service provider for a specific customer. The bill from the laboratory to the
small animal veterinary service provider shall indicate the service performed
for the specific customer. The resale exemption only applies to services that
are specifically resold by the provider to the customer.
(3) The small animal veterinary service
provider shall issue the Resale Certificate (Form 51A105) or the Streamlined
Sales and Use Tax Certificate (Form 51A26) for the purchases made for
resale.
(4) Small animal veterinary
service providers are the consumers of the materials, supplies, and general
services used or consumed while providing veterinary services. Providers of
small animal veterinary services may not claim a resale exemption on purchases
of products used or consumed while providing veterinary services. Examples of
these items include items such as surgical tools, tables, paper towels,
syringes, needles, lab testing kits, general supplies, and janitorial
services.
Section 5.
Veterinary Services Provided for Animals Excluded from Small Animal Veterinary
Services.
(1) Veterinary services for animals
excluded from small animal veterinary services are not subject to sales tax and
the providers are the consumers of the tangible personal property, digital
property, or services that they use in performing their services.
(2) As the consumer, providers of veterinary
services for animals excluded from small animal veterinary services are
responsible for paying the applicable sales and use tax on all products used in
performing their services including any medicines, vaccines, surgical sutures,
flea treatments, anesthetics, surgical tools, tables, paper towels, syringes,
needles, general supplies, and taxable services that are used or consumed in
the provision of their veterinary services.
Section 6. Mixed Veterinary Practices.
(1) Persons providing both small animal
veterinary services and veterinary services for animals excluded from small
animal veterinary services shall maintain records in a manner that documents
and distinguishes the specific products and supplies used while rendering both
types of veterinary services.
(2)
Persons providing both types of veterinary services may issue a resale
certificate for tangible personal property held in inventory if it is unknown
at the time of purchase whether the property will be resold or used in the
provision of veterinary services not subject to sales tax. If any portion of
the tangible personal property is used or consumed in the provision of
veterinary services not subject to sales tax, then the purchaser shall report
and pay the sales and use tax on that portion directly to the department
according to the provisions of
KRS
139.290.
Section 7. Pet Care Services.
(1) Pet care services are subject to sales
tax pursuant to
KRS
139.200. Any person, including a veterinarian
that provides pet care services is subject to the sales tax on the gross
receipts derived from the provision of these services.
(2) Pet care services include services such
as the services listed under the provisions of
KRS
139.200.
(3) Persons providing pet care services are
the consumers of the tangible personal property, digital property, or services
they use in performing their services.
(a) Pet
care service providers may not claim a resale exemption on purchases of
products used or consumed while providing their taxable services. Examples of
these items include items such as grooming equipment, shampoo, toothpaste,
toys, bedding, and general supplies.
(b) Pet care service providers may claim a
resale exemption on purchases of products provided to and remaining with the
animals. Examples of these items include items such as flea treatments, food,
and treats.
Section
8. Treatment of other transactions.
(1) Pet adoption fees are taxable receipts
subject to sales and use tax. Payment of these fees is consideration made for
the transfer of tangible personal property in a retail sale.
(2) Services provided to service animals
covered under the Americans with Disabilities Act (ADA),
42 U.S.C.
12101 et. seq. and any amendments to the act,
are not small animal veterinary services or pet care services subject to sales
tax.
(3) Services provided to farm
work stock animals that are exempt under the provisions of
KRS 139.480 are
not small animal veterinary services or pet care services subject to sales
tax.
STATUTORY AUTHORITY:
KRS
131.130