Kentucky Administrative Regulations
Title 103 - FINANCE AND ADMINISTRATION CABINET - DEPARTMENT OF REVENUE
Chapter 31 - Sales and Use Tax; Administration and Accounting
Section 103 KAR 31:080 - Coupons or redemption certificates
Current through Register Vol. 50, No. 9, March 1, 2024
RELATES TO: KRS 139.010, 139.200
NECESSITY, FUNCTION, AND CONFORMITY: KRS 131.130(1) authorizes the Department of Revenue to promulgate administrative regulations for the administration and enforcement of Kentucky tax laws. This administrative regulation interprets the sales and use tax law as it applies to coupons and redemption certificates.
Section 1. Definitions.
Section 2. A retailer shall include within their gross receipts the exchange value of coupons or redemption certificates taken from their customers if the retailer redeems such certificates from their wholesaler or other third party. The exchange value shall be included in gross receipts under either of the following methods:
Section 3. Cash discounts shall not be included in the retailer's gross receipts. The retailer shall not collect tax from customers on the exchange value of such coupons or redemption certificates.
Section 4. Coupons or redemption certificates that represent combinations of those described in Sections 2 and 3 of this administrative regulation shall be taxable on that portion of the coupon or redemption certificate value that may be redeemed from the retailer's wholesaler or other third party. The cash discount portion of such coupons or redemption certificates shall not be subject to tax.
STATUTORY AUTHORITY: KRS 131.130