Kentucky state seal

KentuckySales Tax

A Complete Guide For Businesses

Automate My KentuckySales Tax Filings

State Rate
6.00%

Local Tax
no

State Portal
Department of Revenue

Phone
(502) 564-5170

General requirements

Kentucky is a destination-based state (sales are taxed where the buyer is located).

  • Sales tax is charged on the gross receipts from the retail sale of tangible personal property (TPP), digital property, and the sale of certain services
  • Items purchased for resale aren’t taxed

Businesses may file online using KY eFile.

Rates

Kentucky’s sales tax rate is 6%. There are no additional sales taxes imposed by any city or county.

How food is taxed

Food and food items are tax exempt in Kentucky with the exception of candy, soft drinks, and prepared foods.

Nexus in Kentucky

Business activities that establish a tax presence in the state include:

  • Maintaining a business location in Kentucky, including any kind of office, warehouse, or distribution center
  • Having employees or representatives who solicit and accept orders in Kentucky
  • Leasing or owning property in Kentucky

Economic nexus in Kentucky:

  • According to state law, out-of-state sellers whose sales into Kentucky exceed $100,000 gross revenue or 200 separate transactions in the current or previous calendar year are required to register with the state, collect sales tax on sales to Kentucky, and remit that sales tax to the state.
  • Effective date: July 1, 2018
  • Want more information? Kentucky provides a remote sellers FAQ and a statement.

Want more information? Check out this page.

Filing schedule

The timely filing discount amounts to 1.75% of the first $1,000 and 1.5% of the tax due in excess of $1,000 on each return up to a maximum of $50.

Based on the tax liability estimates you make when you register for a tax permit, you’ll be set up on a monthly, quarterly, or annual filing schedule.

Returns are due on the 20th of the month following the end of the reporting period.

Registering to collect sales tax in Kentucky

A new business must register with the Department of Revenue for a valid Sales and Use tax permit and then register for online filing at the Kentucky One Stop.

Penalties

Penalties are charged as follows:

  • Late filing: 2% of the total tax due for every 30 days that a tax return is late, with the maximum penalty being 20% of the total tax due
  • Late payment: 2% percent of the total tax due for every 30 days that a payment is late, with the maximum penalty being 20% of the tax due

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