Declaration of Domicile for Purchase of Residential Utilities will be effective January 1, 2023
To assist Kentucky Rural Water Association (KRWA) members, we recommend the following:
1) Utilities review their list of Residential customers (those currently receiving the residential sales tax exemption) and note those customers who have more than one meter. Beginning January 1, 2023, only the meter at a customer’s domicile will be eligible to receive the Residential Sales Tax Exemption. All the other meters of the customer will have to be charged sales tax for services used after January 1, 2023.
Note: KRS 139.470(7) describes a place of domicile as “the place where an individual has his or her legal, true, fixed and permanent home and principal establishment, and to which, whenever the individual is absent, the individual has the intention of returning.”
2) Take the final version of the Declaration of Domicile and add the utility’s name and logo to the form to personalize it for your utility. If the utility provides more than one utility service, e.g., water, sewer, gas, electric, it should put boxes or lines on the form near where the customer signs to indicate the services utilized by the customer.
3) The utility should educate their staff about the need for all “new” customers, who qualify for the Residential Sales Tax Exemption after January 1, 2023, to sign a Declaration of Domicile form. If a “Trigger Event” occurs after January 1, 2023, then the residential customer will need to sign a Declaration of Domicile form.
Note: an example of a trigger event could include, but not limited to, an existing residential customer changing service locations (moving domicile locations).
4) The Declaration of Domicile should be maintained on file at the utility for Department of Revenue audit purposes.
If you have any questions, please contact the KRWA office at 270-843-2291.
The Department of Revenue has issued a FAQs (frequently asked questions) page on their website. KYDOR is also sending out letters (dated 11/30) to all KY utilities regarding the changes in residential exemption for utility purchases. Please view a copy of the KYDOR letter here.
Examples of Completed Domicile Forms
Sales Tax Exemption Recorded Webinar
For more information, please watch the recorded webinar we presented on December, 20th. The first hour of the webinar focuses solely on House Bill 8 and the new sales tax exemption law.