103 KAR 26:050 - Common carriers
RELATES TO: KRS 139.470, 139.480
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 transactions involving common carriers.
Section 1.
Definition. "Rolling stock" means only that equipment designed to move on rails
and used for the transportation of goods or passengers for hire.
Section 2. All tangible personal property,
digital property, admissions, accommodations, and taxable services sold to or
used by common carriers in this state shall be subject to application of the
sales or use tax with the exceptions noted in Section 3 of this administrative
regulation. Tax shall be applicable to leasing arrangements, or use pursuant to
leasing arrangements, whereby items of equipment (including things such as
tires or batteries) are acquired by common carriers for utilization over
extended periods of time in connection with operations. The purchases, uses,
leases, and uses pursuant to leases shall be subject to the exceptions and
qualifications in Section 3 of this administrative regulation.
Section 3. The following shall be excepted
from application of the sales or use tax:
(1)
Over the road equipment which enters this state in actual use in interstate
commerce at the time of entering, and is used exclusively in interstate
commerce thereafter. This exception shall not be void due to nominal use in
intrastate commerce.
(2) Ships,
vessels, and related equipment which enter this state in actual use in
interstate commerce at the time of entering and are used exclusively in
interstate commerce thereafter. This exception shall not be void due to nominal
use in intrastate commerce.
(3)
Locomotives or rolling stock, including materials for the construction, repair,
or modification thereof, or fuel or supplies for the direct operation of
locomotives or trains, used or to be used in interstate commerce. Supplies
shall not include items used for construction, maintenance, or support of the
railway system.
(4) Aircraft,
repair and replacement parts therefor, and supplies, except fuel, for the
direct operation of aircraft in interstate commerce and used exclusively for
the conveyance of property or passengers for hire. This exception shall not be
void due to nominal use in intrastate commerce.
Notes
STATUTORY AUTHORITY: KRS 131.130(1)
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