Telecom Companies That Must Register With the Kentucky Department of Revenue
All telecommunications companies doing business in Kentucky must register as a business first. Companies wishing to register a business must do so with the Kentucky Department of State and the Department of Revenue. Local counties may have additional requirements. These steps will assist:
- Obtain a Federal Employer Identification Number (FEIN)
- Check for additional state tax requirements
- Consult local governments for additional tax or license requirements
- Register for unemployment insurance and workers’ compensation (if the company has employees working in Kentucky)
- Obtain all licenses required. These licenses may be federal, operational, environmental, and local
- Learn the regulations and ordinances
Requirements Afer The Registration Process
- Once the business is registered, a Kentucky Tax Registration Application must be completed. Telecommunications companies must have the FEIN number, and a sales and use tax number, corporation tax number, or withholding tax number. If none of these are available, they must contact a representative at the Division of Sales and Use Tax.
- The person named as account administrator will be responsible for paying the taxes, granting additional access to users, and must be an officer of the company. Processing the application takes a few days. Once registered, access will be granted, along with an E-Tax e-mail confirmation to use the Telecommunications Tax System.
- Telecommunications taxes can be paid electronically, by Tax Payment Solution (TPS), or Telecommunications Tax Electronic Filing.
Renewal for Kentucky Telecommunications Companies
Telecommunications companies in Kentucky will be notified when it is time to renew their licenses unless there is a change in operations or termination of business. If this is the case, the company must notify the Department of Revenue.
The FAStek team can handle all areas of compliance, including registrations and renewals.
Telecom Tax Exemptions in Kentucky
The Telecom Tax has a prohibition provision that stops local governments from assessing or collecting a franchise fee or additional taxes from MVP and communications service providers based on a ruling by the Kentucky Supreme Court.
While the General Assembly has the right to give municipalities authority to collect license fees on franchises, the power to collect those fees for the use of public services is not delegated by the General Assembly, but the Constitution.
The State of Kentucky telecom tax rates required by the Kentucky Department of Revenue are broken into three areas:
- 3% excise tax for multichannel video programming and audio programming
- 2.4% gross revenues on multichannel video programming and communications services tax
- 1.3% gross revenues tax on telephone communications
The tax imposed should be reflected on one return.
How to File a Voluntary Disclosure Agreement in Kentucky
Kentucky has a Voluntary Disclosure Program (VDP) designed to assist businesses and enhance compliance for those who have outstanding tax liabilities and obligations. These businesses have not filed returns or paid taxes due to the Kentucky Department of Revenue and could face stiff penalties if not addressed.
Businesses that have tax liability in multiple states may have their VDA submitted to the Multistate Tax Commission. To qualify for a VDA, the business must not have been contacted by the Department of Revenue or Multistate Tax Commission about the taxes in question. The business must not have any additional outstanding tax liabilities and must not be under audit.
In addition to the initial criteria, the business must agree to pay the taxes due plus any accrued interest within 60 days from the DOR’s acceptance of the agreement. The business must also be willing to provide their tax records for audit and verification of the liability and claims.
The application process can be tedious. Businesses must submit in writing:
- Description of the business, number of years in operation, nature, and extent of business operations in the state, property ownership, employees, and any additional taxable activities taking place in the state.
- Whether the business receives payment for goods and services provided by the federal government or the Commonwealth of Kentucky.
- Whether the business was contacted by the Department of Revenue.
- The disclosure terms, including the four-year lookback period.
All information provided by the company will be included in a Statement of Representations and Inducements. Once the agreement is forwarded for signature, the company has 90 days to sign and execute it. The taxpayer will then have 90 days to file returns and pay taxes due.
Conquer Kentucky Telecom Tax Requirements Once and For All
If you need help registering, reporting, recording, or otherwise managing Kentucky telecom tax issues, contact us at FAStek.
Our experienced agents have worked with many telecommunications companies in Kentucky, and have the expertise to help you conquer communications tax once and for all.