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Kentucky Updates Streamline Matrix

By Erica Horn and Maddie Schueler

The KDOR has revised the Streamlined Sales Tax Taxability Matrix effective August 1, 2015.  The revised matrix makes several technical corrections.  It clarifies that the definition of “prepared food” excludes prepared food sold without eating utensils provided by the seller whose primary NAICS classification is manufacturing in sector 311, except subsector 3118 (bakeries), and bakery items that meet the definition of prepared food sold without eating utensils provided by the seller, including bread, rolls, buns, biscuits, bagels, croissants, pastries, donuts, Danish, cakes, tortes, pies, tarts, muffins, bars, cookies, and tortillas.  By contrast, the following items are included in the definition of “prepared food”: (1) prepared food sold without eating utensils provided by the seller in an unheated state by weight or volume as a single item; (2) meat or seafood products that meet the definition of prepared food sold without eating utensils provided by the seller in an unheated state by weight or volume as a single item; and (3) prepared food sold without eating utensils provided by the seller that ordinarily requires cooking (as opposed to just reheating) by the consumer prior to consumption.  The KDOR also has revised provisions related to drugs to clarify the following: (1) drugs, except over-the-counter drugs, sold with a prescription for human use are exempt; (2) drugs, except over-the-counter drugs, sold without a prescription for human use are taxable; (3) over-the-counter drugs for human use sold to hospitals and other medical facilities are taxable; (4) drugs, except over-the-counter drugs, for animal use with or without a prescription are taxable; and (5) over-the-counter drugs and prescription drugs for animal use sold to veterinary hospitals and other animal medical facilities also are taxable.