Total Range for 2025
| Base state sales tax rate | 6% | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate |
| Local rate range | N/A | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate |
| Total rate range | 6% | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate |
| Economic sales nexus threshold | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate | |
| Transactions threshold | N/A | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate |
| Sales tax return filing due date | 20th of following month | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate |
The base state sales tax rate in Kentucky is 6%, and since their is no local tax range the total sales tax is just 6%.
How to calculate your sales tax rate
Use our online sales tax calculator to determine the combined state and local sales tax rate for each location where you have a physical or economic nexus. Just enter your state and ZIP code to get your sales tax rate.
Example of using the sales tax rate in a tax calculation:
- Since Kentucky has a 6% state sales tax, you’ll need to calculate the amount of sales tax to be added:
- Sales Tax = Price of Item x Sales Tax Rate
- Sales Tax = $50 x 6%
- Sales Tax = $3
- The total price you would pay for the jacket, including sales tax, would be:
- Total Price = Price of Item + Sales Tax
- Total Price = $50 + $3
- Total Price = $53
Nexus: Why do you need to collect sales tax in Kentucky?
If you’re selling goods and services in Kentucky then sales tax might apply! To determine your obligation, you need to understand “nexus,” which ties businesses to states for tax purposes.
Two types of nexus exist:
- Physical Nexus: Having a physical presence, like an office, warehouse, or employees in Kentucky, triggers this type. If you do, you likely need to collect sales tax.
- Economic Nexus: This kicks in when your sales within Kentucky exceed a certain economic threshold. Even without a physical presence, surpassing this threshold requires collecting sales tax.
In Kentucky, there is also a transaction threshold of 200, which means that even if your sales aren’t over $100,000 if you’ve sold more than 200 items then you still need to pay sales tax.
Services
- Generally not taxable: Most services in Kentucky are not taxable. However, there are some exceptions.
- For example, cleaning services, landscaping services, and pest control services may be taxable depending on the specific service provided.
Goods
- Tangible personal property (goods) sold in Kentucky is subject to state sales tax. There may also be local sales taxes depending on the location.
- There are some exemptions for certain goods, such as prescription drugs, farm equipment, and construction equipment.
Freight/Shipping
- The cost of shipping and freight charges is generally not taxable in Kentucky. However, there may be exceptions depending on the specific circumstances.
Clothing
- In Kentucky clothing is subject to the 6% sales tax
Electronics
- Electronics are taxable in Kentucky
SaaS
- Since the beginning of 2023 SaaS has been taxable in Kentucky
Digital Products
- Digital products, such as digital photographs, music and video games, are generally taxable
Software
- Pre-written software downloaded or streamed online is considered tangible personal property and is subject to sales tax in Kentucky.
- Custom software development services may be considered non-taxable services.
How to register for sales tax in Kentucky
There are two main ways to register for a sales tax permit in Kentucky:
- Online: This is the recommended method as it’s faster and easier.
- Visit the Kentucky Online Gateway (https://kog.chfs.ky.gov/home/).
- You will need to register with the Kentucky Department of Revenue (DOR) before applying for a sales tax permit.
- The online application will ask for information about your business, such as:
- Business name, address, and contact information
- Federal Employer Identification Number (EIN)
- Date your business began or will begin operations
- Projected monthly sales
- Projected monthly taxable sales
- Products or services you will be selling
- Paper Application:
- Download the Kentucky Tax Registration Application (Form 10A100) from the Kentucky Department of Revenue website.
- Fill out the application completely and mail it to the Kentucky Department of Revenue.
How to collect sales tax in Kentucky
Here’s a breakdown of how to collect sales tax in Kentucky:
- Know the Rate: It’s 6% state sales tax (no local taxes).
- Charge & Record: Add the tax to your prices and keep track of sales and collected tax.
- File & Pay: File your sales tax returns (monthly, quarterly, or annually) and send the collected tax to the Kentucky Department of Revenue (online, mail, or phone).
How to get a sales tax permit/license in Kentucky?
After your business is registered, apply for a sales tax permit with the Kentucky Department of Revenue. This can be done online through the Kentucky One Stop Business Portal.
During the application, you will need to provide information about your business activities, estimated sales, and other relevant details. Once your application is processed, you will receive your Kentucky Sales and Use Tax Permit.
When are Kentucky’s sales tax returns due?
Kentucky sales tax returns are generally due on the 20th of the month following the end of the reporting period. There’s a bit of flexibility, though, depending on the day of the week and holidays.
The frequency of filing your Kentucky sales tax returns depends on your business’s sales volume.
- Monthly: If your projected monthly sales tax liability is $10,000 or more, you’ll likely file monthly.
- Quarterly: Businesses with lower sales tax liability may be able to file quarterly.
- Annually: Low-volume sellers might only need to file annually.
Is anyone exempt from sales tax in Kentucky?
In Kentucky, there are no general exemptions from sales tax for people (residents or non-residents). However, there are exemptions for certain types of purchases:
- Non-Taxable Goods: Certain goods are not subject to sales tax, such as:
- Prescription drugs and medical equipment
- Food (except prepared food sold by restaurants and similar establishments)
- Farm equipment
- Certain construction materials used for residential or farm buildings
- Tax-Exempt Organizations: Organizations like qualified charities, religious organizations, and some government entities may be exempt from paying sales tax on purchases they make. They will typically need to provide a valid exemption certificate to the seller.
Do I Have to Collect Sales Tax from Kentucky Customers if I Sell on Amazon, Walmart, Ebay, or Etsy?
No.
Kentucky has a marketplace facilitator law. This means that marketplaces like Amazon or Etsy should collect sales tax on behalf of third-party sellers on their platforms.
However, if you have sales outside of the marketplace in Kentucky, you must collect sales tax on your non-marketplace sales when you have a physical or economic nexus.
