2011 Uk Income Tax Seminars Program Registration Form

A REVENUE PUBLICATION FOR THE TAX PROFESSIONAL

September 2011, Vol. 30, No. 4

SALES TAX TREATMENT OF GIFT CARDS

partner, member or shareholder; and (ii) corporate

partner or member that is doing business in Kentucky

Per KRS 139.200, Kentucky assesses the 6 percent sales

only through its ownership interest in a pass-through

tax on retail sales. KRS 139.010(28) deﬁ nes retail sale as

entity. Withholding shall be at the maximum rate

“any sale, lease or rental for any purpose other than resale,

provided by KRS 141.020 or 141.040.

sublease or sub rent.” KRS 139.010(30) further deﬁ nes a sale

KRS 141.206(16)(a) provides that a pass-through

as “the furnishing of any services included in KRS 139.200;

entity may file a composite income tax return on

any transfer of title or possession, exchange, barter, lease,

behalf of electing nonresident individual partners,

or rental, conditional or otherwise, in any manner or by any

members

shareholders.

The

pass-through

means whatsoever, of tangible personal

entity shall report and pay tax at the maximum

property; or digital property transferred

rate provided by KRS 141.020 on any portion of

electronically for a consideration.” The

a partner’s, member’s or shareholder’s pro rata or

sale of a gift card is not in essence the

distributive share income of the pass-through entity

sale of tangible personal property and is

apportioned to this state.

excluded from the deﬁ nition of digital property; therefore,

the retail sale of the card itself is not subject to Kentucky

(A composite return should only be used if

sales tax. Sales tax is due, however, at the time of redemption

the nonresident individual is exempt from the

of the gift card, provided the item being purchased is subject

withholding requirement and elects to be included

to Kentucky sales tax. The tax applies to the entire sales price

in the composite return.)

of the transaction with no discount for the value of the gift

For m 740NP-WH-ES, Kentucky Estimated Tax

card redeemed.

Vouchers, shall be used to make the estimated tax

payments required by KRS 141.206(6). On or after

FORM 740NP-WH-ES

Jan. 1, 2012, For m 740NP-WH-ES and instr uctions

may be obtained at all Kentucky Taxpayer Ser vice

Effective for taxable years beginning on or after

Centers; by writing FORMS, Kentucky Department

Jan. 1, 2012, every pass-through entity required to

of Revenue, 501 High Street, Frankfort, KY 40601-

withhold Kentucky income tax as provided by KRS

2103; by calling (502) 564-3658; or downloaded from

141.206(5) or file a composite income tax return

as provided by KRS 141.206(16)(a) shall make a

declaration and payments of estimated tax as required

by KRS 141.206(6) if: (i) a nonresident individual

partner’s, member’s or shareholder’s estimated tax

TABLE OF CONTENTS

liability can reasonably be expected to exceed $500;

or (ii) a corporate partner’s or member’s estimated

tax liability can reasonably be expected to exceed

Sales Tax Treatment of Gift Cards .........................1

$5,000.

Form 740-NP-WH-ES ..............................................1

KRS 141.206(5) provides that every pass-through

entity required to file a return under KRS 141.206(2),

Louis A. Grief Tax Planning Institute ....................2

except publicly traded partnerships as defined in

University of Kentucky 45th Annual 2011 Income

KRS 141.0401(6)(r), shall withhold Kentucky income

Tax Seminars .................................................... 2-4

tax on the distributive share, whether distributed or

undistributed, of each: (i) nonresident individual

2011 Uk Income Tax Seminars Program Registration Form - Kentucky

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