Dear Clients of The McCoy Group and other readers. We are writing to inform you of a significant change to tax legislation in the state of Kentucky. As part of ongoing updates to the state's taxation system, a new law has been enacted that now requires digital services to be taxed. This law has important implications for all businesses and consumers who use or provide digital services within the state.
Effective from January 1, 2023, all digital services provided within Kentucky's jurisdiction will be subject to a digital service tax. This tax covers a broad range of digital services, including but not limited to streaming services, software services, cloud computing, and digital marketplace transactions.
It is vital for all businesses, particularly those who operate online or use digital services as part of their operations, to be aware of this change and take appropriate measures to comply with the new law. This could involve updating accounting practices, reviewing pricing structures, and informing customers about the changes.
The tax rate for these services is set at 6%, and will be collected at the point of sale or point of consumption, depending on the nature of the service provided. Please note that there may be exceptions and specific conditions depending on the exact nature of the digital services you provide or use.
We strongly recommend that you consult with a tax professional to understand the full implications of this new legislation on your business. It is crucial to remain compliant with all state tax laws to avoid penalties and unnecessary complications.
Should you require further information or have any queries regarding this matter, please do not hesitate to contact me at your earliest convenience.
Thank you for your attention to this important matter.
Article for Reference: https://www.blueandco.com/kentucky-sales-tax-expansion-hb8/
