Kentucky Administrative Regulations
Title 103 - FINANCE AND ADMINISTRATION CABINET - DEPARTMENT OF REVENUE
Chapter 28 - Sales and Use Tax; Miscellaneous Retail Transactions
Section 103 KAR 28:030 - Producing, fabricating and processing
Current through Register Vol. 50, No. 9, March 1, 2024
RELATES TO: KRS 139.010, 139.260
NECESSITY, FUNCTION, AND CONFORMITY: KRS 131.130(1) authorizes the Department of Revenue to promulgate administrative regulations necessary for the administration and enforcement of all tax laws in Kentucky. This administrative regulation establishes sales and use tax requirements for the producing, fabricating or processing of property furnished by consumers.
Section 1. Tax shall apply to charges for producing, fabricating, processing, printing, or imprinting tangible personal property for consumers who furnish either directly or indirectly the materials used.
Section 2. "Producing," " fabricating," and "processing" shall include any labor which results in the creation or production of tangible personal property or which is a step in a process or series of operations resulting in the creation or production of tangible personal property.
Section 3. Tangible personal property which is cut, threaded, shaped, bent, polished, welded, sheared, engraved, punched, drilled, machined, monogrammed, decoratively stitched, or in some other way has work performed on it to change it from its original state into something else with different characteristics shall be considered to have been fabricated. Examples of taxable charges shall include the items listed in this section:
Section 4. "Producing," "fabricating," and "processing" shall not include labor which does not result in the creation or production of tangible personal property or which does not constitute a step in a process or series of operations resulting in the creation or production of tangible personal property, but which constitute merely the repair or reconditioning of tangible personal property to refit it for the use for which it was originally produced. This repair and reconditioning shall be governed by the provisions of 103 KAR 27:150.
Section 5.
STATUTORY AUTHORITY: KRS 131.130(1)