Legislative Changes from House Bill 8
Gross Receipts Exemption for Taxable Services
Effective January 1, 2025, KRS 139.470(23) and (24) provide an exemption for the first $12,000 in gross receipts from the sale of a service listed under KRS 139.200 (2)(g) to (ax) during a calendar year. The previous exemption threshold was $6,000 per year. Retailers that make sales solely of services that became taxable effective July 1, 2018, or January 1, 2023, which do not have gross receipts over $12,000 during calendar year 2024 are not required to maintain an active sales tax permit for calendar year 2025 if sales are not expected to exceed the $12,000 threshold during 2025.
However, for the first calendar year when gross receipts exceed $12,000, all gross receipts over $12,000 are taxable in that calendar year. Once a seller crosses the threshold, all gross receipts from sales by the retailer are subject to tax in subsequent calendar years. This exemption does not apply to retailers engaged in the business of selling tangible personal property, digital property, or services listed in subsection (2)(a) to (f) of KRS 139.200. Likewise, the exemption does not apply to retailers with gross receipts from sales in any combination of taxable services, tangible personal property or digital property.