LOUISVILLE, Ky. — A new law takes effect that could increase your utility bill taxes, at least for some Kentuckians.
For months now, the Kentucky Electric Cooperatives have informed their customers about the upcoming utility sales tax changes. The coop serves over 1.5 million people across the state.
“Kentucky Electric Cooperatives is the association which supports all 26 local coops all throughout Kentucky. Each one of those coops is locally owned and operated by the members they serve.” Joe Arnold, Vice President of Strategic Communications for Kentucky Electric Cooperatives explained to Spectrum News.
According to the Kentucky Energy and Environment Cabinet, starting in January, if Kentuckians own or rent more than one property in the state, they’ll pay a 6% sales tax on utilities. Specifically, that means electricity, gas, water, sewer and other services. This will be for any property that is not your primary residence.
“It’s unclear when exactly those charges will show up on a bill. But, ultimately, if you have more than one account, and those other accounts are not your primary residence, then yes, those are the ones that will begin seeing that 6% sales tax attached.” Arnold explained.
“This is all part of tax reform by the General Assembly.” Arnold said. “They’re reducing everyone’s income tax and as part of that tax reform, they’re removing some of the exemptions on a number of categories.”
Arnold walked through, from the co-op’s perspective, how the new rules could affect someone who owns more than one home or has more than one meter in their name.
“Because co-ops are owned by the people we serve, we are consumer advocates. We want to make sure that someone is not mistakenly paying a tax for something that they’re tax exempt. So, if someone owns only one home but perhaps they have a second meter that operates a detached garage or maybe a streetlight outside their home but it’s still part of their primary residence, those are still gonna be tax exempt.” Arnold said.
So, what if you live in an apartment or you own one home, or you only have one meter in your name? I asked Arnold how these new rules might affect you.
“My understanding from the Department of Revenue is this will not affect you at all if you have one home and one meter.” Arnold explained. “The biggest concern that the state has and that we have, is to make sure that if you have more than one meter, that you are specifying whether that meter is a primary residence or not.”
These changes go into effect on Jan. 1, 2023. The Kentucky Electric Cooperatives have more information about the tax. So too does the Kentucky Department of Revenue that provides information as an FAQ.