RELATES TO:
KRS 131.183,
139.590,
139.980,
139.990
NECESSITY, FUNCTION, AND CONFORMITY:
KRS
131.130(1) authorizes the
department to promulgate administrative regulations for the administration and
enforcement of tax laws in this state. To facilitate payment of the sales and
use taxes levied in KRS Chapter 139,
KRS
139.590 authorizes the Department of Revenue,
within its discretion, to permit or require returns or tax payments for periods
other than monthly periods. This administrative regulation establishes a
procedure whereby any taxpayer whose average monthly sales and use tax
liability exceeds $50,000 is required to remit by the 25th of each month, taxes
applicable to the period commencing on the 16th of the previous month and
extending through the 15th of the current month.
Section 1. Any taxpayer whose average monthly
sales and use tax liability exceeds $50,000 shall report and remit by the 25th
of each month, sales and use taxes applicable to the period beginning on the
16th of the previous month and extending through the 15th of the current
month.
Section 2. The department
shall review all taxpayer payments annually on a calendar year basis and
identify those taxpayers who meet the $50,000 test based on the average monthly
tax liability for that period. In determining the amount of tax due from a
taxpayer for a reporting period, the department shall consider the total amount
due based on current tax reporting procedure. Changes in reporting procedure
for the purpose of circumventing the requirements of this administrative
regulation shall not be permitted. The department shall notify taxpayers in
writing of their obligation to begin remitting tax as set forth in this
administrative regulation at least forty (40) days in advance of the date that
the first payment is to be forwarded to the department.
Section 3.
(1) This accelerated filing requirementshall
be effective for the July tax return following the department's calendar year
review and notification referenced in Section 2 of this administrative
regulation.
(2) Those taxpayers
identified in Section 1 of this administrative regulation shall file the July
return no later than August 25th and remit tax for both the full month of July
and for the first fifteen (15) calendar days of August.
(3) The tax due for the first fifteen (15)
days of August may be computed either on an actual basis or an estimated basis.
If the taxpayer elects to use the estimated basis, the tax paid for the first
fifteen (15) days of August cannot be less than one-half (1/2) of the total tax
liability for the month of July.
(4) After the initial return is filed under
this procedure, subsequent returns shall be due on or before the 25th of each
month and shall include payment of tax covering the period from the 16th of the
previous month through the 15th of the current month, with the fifteen (15)
days of the current month reported on either an actual or estimated basis. The
estimated amount cannot be less than one-half (1/2) the total tax computed for
the previous calendar month before applying any credit for
prepayment.
Section 4.
Taxpayers shall make the election to file on an estimated or actual basis
referred to in Section 3(3) of this administrative regulation at the time of
filing the initial return under this administrative regulation, and shall
continue to file on that basis unless a change is authorized in writing by the
department.
Section 5. The
department shall develop procedures for implementing and administering the
payment program set forth in this administrative regulation. Taxpayers electing
to "estimate" tax due may continue to report gross receipts, deductions, and
purchases subject to use tax, on a calendar month basis with appropriate credit
given for the tax already remitted for the first fifteen (15) days.
Section 6. Taxpayers required to remit tax as
described in this administrative regulation shall continue this practice until
notified otherwise in writing by the department. Taxpayers shall be relieved of
the responsibility only if their average monthly tax liability is less than
$40,000 for two (2) consecutive calendar years.
Section 7. Taxpayers failing to comply with
the provisions of this administrative regulation shall be subject to penalties
as provided in
KRS 139.980 and
interest as provided in
KRS
131.183.
