Some Kentuckians who own multiple residences may have to pay utility tax

LOUISVILLE, Ky. (WDRB) -- With a new year comes new laws going into effect in Kentucky, including a sales tax on power bills. But it doesn't apply to all Kentuckians.

Residents will be paying less income tax starting in January.

"We are a poor state, we can't tax our way into wealth and so we need to grow," Rep. Jason Nemes, R-D33, said. "Our thought is that House Bill 8 will continue us to grow."

The Republican-led state legislature passed House Bill 8 by overriding Gov. Andy Beshear's veto, which drops the income tax. But it does tack on an expansion of services that will have a sales tax.

One of those is that starting Jan. 1, 2023, there will be a 6% tax applied to utilities at residences if it is not the customer's domicile, or primary, residence. Those services would include water, electric and gas.

"The intention is if it's a place that you live that you're not being taxed on those utilities," Nemes said.

"It's important to note this is a tax, you know, this isn't from our company," Daniel Lowry, with LG&E and KU, said.

Lowry said, about a month ago, the company sent notices out to anyone who has multiple accounts in their system.

"If you only have one house like me, in Kentucky, you don't do anything," Lowry said.

And according to lawmaker David Meade, if you have a meter for an outbuilding, that's exempt as well. Joe Arnold with Kentucky Electric Cooperatives told WDRB News that he advises any utility members who have multiple meters on their property to fill out an exemption form just in case.

"But if you have a lake house (second residence), then obviously there's going to be a sales tax on utilities at your lake house," Nemes said.

Apartments are where things get a bit complicated.

If you are a property owner renting out units, there is an exemption form tenants can fill out if the unit is their primary residence.

If those forms aren't filled out, or the units are vacant, one manager of an apartment company said they could be saddled with the 6% tax on each utility. That's why said they're scrambling right now to get the forms filled out.

There are two different forms available to fill out from the Department of Revenue. One allows customers to declare their primary residence.

The second form is for landlords with multiple tenants at a single-metered property. A form should be filled out for each utility company that provides services.

Lowry said the deadline to fill out an exemption form for LG&E is Dec. 15.

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