Kentucky2026Active
HB101
Sales and Use Tax Exemption for Religious Institutions
Last scannedAug 24, 2026, 10:26 AM
In one sentence
This bill creates a new rule so that qualified nonprofit religious institutions do not have to pay sales tax on purchases or collect it on certain sales made within Kentucky.
What it does
- Defines 'religious institution' as a resident, nonprofit organization with federal Section 501(c)(3) status.
- Includes single-member limited liability companies wholly owned by qualified religious institutions in the definition of religious institution.
- Exempts purchases made by religious institutions if the items or services are used solely within Kentucky for their religious function.
- Exempts sales of tangible personal property, digital property, or services made by religious institutions.
- Keeps existing tax exemptions and refund rules specifically for educational and charitable institutions separate from this new rule for religious groups.
Who it affects
- Nonprofit religious institutions located in Kentucky with federal Section 501(c)(3) status.
- Single-member limited liability companies wholly owned by qualified nonprofit religious institutions.
- The state department responsible for collecting sales and use taxes.
Limits and unknowns
- The bill does not state when it will officially become law or start taking effect.
- Exemptions for sales of admissions to golf courses and fundraising event sales do not apply if they are part of a tourism development project approved under specific state laws.
Plain language
Terms to know
- Sales tax exemption
- A rule that allows certain groups to buy or sell items without paying the usual government tax on those transactions.
- Section 501(c)(3)
- A part of federal law that gives nonprofit organizations, like churches and charities, special status so they do not have to pay income taxes.
- Single member limited liability company
- A business owned by just one entity, which in this case is a religious institution acting as the sole owner.
Official record
Sources
Official summary
AN ACT relating to an exemption from sales and use tax for religious institutions.