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By Zachary Atkins and Madison Barnett
The Kentucky Court of Appeals held that a constitutional exemption for property owned by institutions of purely public charity prevented the state from assessing use tax on natural gas a taxpayer purchased without paying sales tax. The public charity exemption applies only to property taxes, but the court concluded that the use tax, an excise tax, functions like a property tax. Accordingly, the court held that use tax could not be imposed on the taxpayer’s use of natural gas in the state. Interstate Gas Supply, Inc. v. Commonwealth of Ky., Fin. & Admin. Cabinet, Dep’t of Revenue, No. 2013-CA-001766-MR (Ky. Ct. App. Feb. 26, 2016).