New Kentucky sales tax will begin in 2023. Expect to pay more for these services
Starting in January, Kentuckians can expect to see higher costs for services like personal training and parking structures, along with more than 30 other services that will be included in the state’s sales tax.
The change is the result of Kentucky Republicans’ support of House Bill 8, itself a vehicle for eventually doing away with the state’s 5% income tax, the Herald-Leader previously reported.
While Republicans in support of the measure argue it will help bring jobs to Kentucky, critics of House Bill 8 say it will hit middle and low-income earners harder while favoring the rich.
Beginning Jan. 1, 2023, the state’s income tax is set to drop to 4.5%, and the bill’s supporters in the General Assembly have plans to approve additional 0.5% reductions if they deem the state’s budget can afford it.
The caveat is that House Bill 8 attaches a 6% sales tax rate to a number of services that were previously exempt, according to a brief from the Kentucky Department of Revenue.
Here’s a look at just a few of the services set to become more expensive in Kentucky in 2023.
Parking services: According to the text of H.B. 8, “parking services” includes not only valet services, but also “the use of parking lots and parking structures.” It does not, however, apply to parking services at an educational institution, like a college campus for instance.
Personal fitness training services: In addition to one-on-one fitness training at your gym, you can also expect to pay more for instructor-led classes like yoga lessons or swimming lessons, according to another analysis from the state’s revenue agency. In another provision, examples of “leisure, recreational and athletic instructional services” include charges for youth to participate in Little League or tennis lessons.
Recreational camp tuition and fees: According to the department of revenue, this change will also be broadly applied. “As the language implies, this category includes charges for camp enrollment that include recreational activities. All types of camp tuition and related charges will not become taxable. However, camps of all types, whether non-profit or for-profit, that include recreation as more than 10% of planned activities for participants will become taxable as of January 1, 2023.”
Body modification services: You may not want to wait to get that tattoo or body piercing, as this provision includes “tattooing, piercing, scarification, branding, tongue splitting, transdermal and subdermal implants, ear pointings, teeth pointing and any other modifications that are not necessary for medical or dental health.”
Household moving services.
Sevices subject to Kentucky sales tax as of Jan. 1, 2023
The full list of services includes the following:
Photography and photo finishing services
Marketing services
Telemarketing services
Public opinion and research polling services
Lobbying services
Executive employee recruitment services
Website design and development services
Website hosting services
Facsimile transmission services
Private mail room services
Bodyguard services
Residential and nonresidential security system monitoring services
Private investigation services
Process server services
Repossession of tangible personal property services
Personal background check services
Parking services
Road and travel services provided by automobile clubs as defined by KRS 281.010
Condominium time-share exchange services
Rental of space for meetings, conventions, short-term business uses, entertainment events, weddings, banquets, parties and other short-term social events
Social event planning and coordination services
Leisure, recreational and athletic instructional services
Recreational camp tuition and fees
Personal fitness training services
Massage services, except when medically necessary
Cosmetic surgery services
Body modification services, including tattooing, piercing, scarification, branding, tongue splitting, transdermal and subdermal implants, ear pointing, teeth pointing and any other modifications that are not necessary for medical or dental health
Testing services, except testing for medical, educational or veterinary reasons
Interior decorating and design services
Household moving services
Specialized design services, including the design of clothing, costumes, fashion, furs, jewelry, shoes, textiles and lighting
Lapidary services, including cutting, polishing and engraving precious stones
Labor and services to repair or maintain commercial refrigeration equipment and systems when no tangible personal property is sold in that transaction, including service calls and trip charges
Labor to repair or alter apparel, footwear, watches or jewelry when no tangible personal property is sold in that transaction
Pre-written computer software access services
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