Western Kentucky services prepare for new sales tax

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Starting next week, a new 6% state tax will be added to dozens of services in Kentucky.

Affected businesses across western Kentucky are preparing for the changes and its impact on customers.

“When I got started in the business in the 90s, the associations would talk about how soon they’re going to start making us pay taxes. It just never happened. But I always felt they would before I got out of the business,” says Eddie Tichenor, owner of Harold’s Economy Cleaners

The new 6% state sales tax, part of Kentucky tax law changes approved by the General Assembly this past Spring, applying to services ranging from pet care to camping to dry cleaning. YMCA chapters across Kentucky are expected to apply the new tax on membership fees. Some businesses and tourist attractions are already informing customers and changing their accounting methods.

For some, applying that new tax could be more difficult. The owners of the Diamond Lake Resort & Campground in Daviess County tell us one issue focuses on reservations made for stays happening after July 1st, and whether if they should apply the new tax, or how they should.

“We still haven’t wrapped our arms completely around it because we haven’t known about it very long, and so we’re having to figure out whether we have to do that because a lot of customers pre-pay for a portion of their visit, and they pre-pay before the tax was collected, but it’s also pre-paid before services are rendered,” says Brian Smith of Diamond Lake Resort & Campground.

Some business owners say the state should’ve waited until the start of the new year to start the new tax.

“I think January 1st was a much better time. That also gives people a chance to get used to the idea and a chance for us to make changes,” says Dr. Franklin Mercer, a veterinarian with the Owensboro Animal Hospital.

State officials created a new website, Tax Answers, with information on which services are affected, and other changes to the state tax code.  Link: http://taxanswers.ky.gov

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(This story was originally published June 25, 2018)

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