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Nonprofit Kentucky Sales Tax Exemption Effective March 26

4/2/19 – Robin Teeters & Stephanie Allgeyer

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Effective March 26, 2019, sales of admissions and tangible property sales at fundraising events by all nonprofit groups and governmental organizations are now exempt from Kentucky sales tax.  Therefore, they should discontinue charging sales tax to their customers and benefactors on these transactions immediately. 

Sales of admissions by nonprofits and government organizations prior to the effective date March 26, 2019 are still taxable, and the tax collected on these transactions should be remitted by the organizations when they file their regularly scheduled sales tax returns.  Also, the new exemption does not apply to sales by retail businesses such as bookstores and thrift stores owned or operated by nonprofit or governmental groups.

Any of these organizations that will no longer have taxable sales (admissions or fundraising event sales) should cancel their sales tax account numbers effective at the end of March.  This can be done when filing the return for the March ending period by including a request for the Kentucky Department of Revenue to accept the return as the final return and to close the account. Organizations that submit returns by paper may include the cancellation request with their returns. Those filing electronically should submit a request by email to KRC.WEBResponseSalesTax@ky.gov.  Please include the account number and organization name in the emailed request. If you have further question, please contact your VonLehman advisor.