Current through Register Vol. 50, No. 6, December 1, 2023
RELATES TO:
KRS
131.110,
139.010,
139.200,
139.260,
139.270,
139.310,
139.330,
139.480,
139.540,
139.550,
139.590,
139.720
NECESSITY, FUNCTION, AND CONFORMITY:
KRS
131.130 and
139.710
authorize the Department of Revenue to promulgate administrative regulations
for the assessment, collection, refunding, administration, and enforcement of
the Kentucky tax laws. This administrative regulation establishes requirements
and guidelines for the application of the sales and use tax exemption for
repair and replacement parts for the direct operation or maintenance of a motor
vehicle, including any towed unit, used exclusively in interstate commerce for
the conveyance of property or passengers for hire as provided in
KRS
139.480(31).
Section 1. Definitions.
(1) "Exclusively in interstate commerce"
means the conveyance of property or passengers by a motor vehicle in more than
one (1) state. A motor vehicle used in the conveyance of property or passengers
only within the borders of this state is not used in interstate
commerce.
(2) "For hire" means a
motor carrier receiving compensation for transportation of property owned by
others or passengers under the requirements of the Federal Motor Carrier Safety
Administration (FMCSA) 49 C.F.R. 325 to 399.
(3) "Truck Part Direct Pay Authorization" or
"TP DPA" means an authorization issued by the Department of Revenue that
permits a taxpayer to report Kentucky sales and use tax directly to the
department on applicable repair, replacement parts, and labor or services
rendered in installing or applying applicable repair and replacement
parts.
Section 2.
Application Process.
(1) The applicant shall
complete the Application for Truck Part Direct Pay Authorization, Revenue Form
51A160.
(2) To qualify for the TP
DPA, the applicant shall be:
(a) Designated as
an interstate motor carrier with the Federal Motor Carrier Safety
Administration and the Kentucky Transportation Cabinet;
(b) Registered with a Kentucky sales and use
tax account number or a Kentucky consumer use tax account number; and
(c) Operating one (1) or more motor vehicles
exclusively in interstate commerce.
(3) The department shall issue qualifying
applicants a TP DPA (Revenue Form 51A161).
Section 3. Exemption Procedures. The TP DPA
holder shall:
(1) Issue a copy of the
authorization to all its truck part vendors;
(2) Report and remit the sales or use tax to
the Department of Revenue on purchases of repair, replacement parts, and labor
or services rendered in installing or applying applicable repair and
replacement parts used on nonqualifying motor vehicles that the purchaser's
vendor would have remitted if the authorization had not been issued;
(3) Report and pay all taxable purchases in
accordance with
KRS
139.540,
139.550,
and
139.590;
(4) Maintain records pursuant to
KRS
139.720(2); and
(5) File by February 15 of each year the
"Truck Part Direct Pay Authorization Purchase Report," Revenue Form 51A162, to
report the total tax savings from purchases of repair, replacement parts, and
labor or services rendered in installing or applying applicable repair and
replacement parts that are exempt from sales and use tax pursuant to
KRS
139.480(31).
Section 4. Vendor Requirements.
(1) Vendors shall be relieved of the duty to
collect and pay the sales or use tax on sales of repair, replacement parts, and
labor or services rendered in installing or applying applicable repair and
replacement parts if they:
(a) Accept a copy
of the purchaser's TP DPA pursuant to
KRS
139.270; and
(b) Retain the copy in the company records
pursuant to
KRS
139.720(2).
(2) Vendors shall:
(a) Report sales to a TP DPA holder on Line
1, Gross Receipts, of Revenue Form 51A102, "Sales and Use Tax Return";
and
(b) Take a corresponding
deduction Code 190 on the return and identify the deduction as "TP DPA
Sales".
Section
5. Transfer of Authorization.
(1) A TP DPA shall not be transferable upon
the sale, lease, or other transfer of the business.
(2) A TP DPA holder shall notify the
department within ten (10) days of the effective date of the sale, lease, or
other transfer of the business.
Section 6. Termination.
(1) The department shall terminate a TP DPA
if the holder:
(a) Fails or ceases to be an
eligible taxpayer;
(b) Fails to
timely file its sales and use tax returns and timely pay any tax due;
or
(c) Fails to comply with any of
the provisions of this administrative regulation.
(2) The department shall notify a TP DPA
holder of the termination by certified mail at the last known business
address.
(3) Upon receipt of the
notification of termination, a TP DPA holder shall notify all truck repair and
replacement part vendors within thirty (30) days of the date of
termination.
(4) The effective date
of the termination shall be the date of the mailing of the termination
notice.
Section 7. Forms.
The forms listed in this administrative regulation may be inspected, copied, or
obtained, subject to applicable copyright law, at:
(1) The Kentucky Department of Revenue, 501
High Street, Frankfort, Kentucky 40601;
(2) A Kentucky Taxpayer Service Center;
or
(3) The department Web site at
http://revenue.ky.gov.
30 Ky.R. 1382;
1763; eff. 1-13-2004; 44 Ky.R. 770; eff. 1-5-2018; Crt eff 1-28-2020; 46
Ky.R.1282; eff. 4-1-2020.
STATUTORY AUTHORITY:
KRS
131.130,
139.710
