- Kentucky applies sales and use tax to prewritten computer software and access services, including those with AI components.
- The tax applies regardless of whether the software is delivered physically, downloaded, or accessed remotely (e.g., SaaS).
- Modifications or enhancements to prewritten software remain taxable unless customization charges are separately stated.
- AI capabilities do not make software tax-exempt; only software specifically designed and developed for a particular purchaser (custom software) is exempt.
- The method of delivery does not affect the taxability of AI-enabled software.
Source: vatabout.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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