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Kentucky Disaster Sales Tax Relief


UPDATE: House Bill 255 was signed as law by Governor Beshear on  April 16, 2012.

Kentucky House Bill 255 (HB 255)* has been sent to Governor Steve Beshear for signature. HB 255 provides sales tax relief to tornado victims in 21 Kentucky counties that were declared disaster areas by President Obama.

According to WSAZ.com, “[t]he bill would allow the state treasury to refund the 6 percent state sales tax for three years for building materials the owners purchase if they rebuild in the counties where their losses occurred.”

Owners who wish to claim the sales tax refund must “…present the state with the receipts and proof of their losses by their insurance companies or the Federal Emergency Management Agency.”

The refund must be for “…sales and use tax paid on the purchase of building materials used to:

  1. Repair that building; or
  2. Construct a new building in a disaster area to replace the building damaged or destroyed by the disaster.”

The sales tax refund is granted for 100% or up to $6,000 “…for each building in the disaster area which is damaged or destroyed by the disaster regardless of the number of legal owners.”

The bill is not expected to cause the state undue hardship, “…lawmakers expected the cost to the state to be minimal because the materials purchased would be from sales that would not have occurred had it not been for the storm damage. Also, it only applies to those counties where the damage occurred and owners have to show proof,” according to Brian Wilkerson, spokesman for Greg Stumbo, D-Prestonsburg, Speaker of the House.

In addition to the sales tax refund, the bill provides that school districts will be allowed to “…waive up to ten instructional days.” This move is to ensure that school districts will not lose funding due to the disaster and lack of attendance. School employees are expected to make up any “…student instructional days waived by participating in instructional activities or professional development or by being assigned additional work responsibilities.”

The bill is retroactive to February 29, 2012 to March 3, 2012 and will take effect once it is signed by the Governor.

*The Kentucky legislature site doesn't allow direct links to bills. Select link and search for the bill titled “AN ACT relating to disaster recovery and declaring an emergency.”

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Avalara Author
Susan McLain
Avalara Author Susan McLain
Susan McLain began her career as a technical writer in technology industries such as satellite networking and medical devices. Her skills encompass technical and marketing writing, usability engineering, verification and validation testing and protocol writing, requirements development, business analysis, technical illustration/graphic design and marketing. She has owned her own business providing service to small to medium sized business and in other positions, she has been in project management, documentation and marketing. She is currently the content specialist for Avalara helping to “make sales tax less taxing.”