Kentucky Sales Tax Guide 2025: The Newest Regulations

Are you navigating the complexities of Kentucky’s taxation system? Whether you’re a resident, business owner, or planning a move to the Bluegrass State, understanding how to manage Kentucky’s tax obligations is crucial to saving time and money. This guide will walk you through everything you need to know about Kentucky’s state taxes, including sales tax, use tax, excise tax, filing requirements, and more.

Sales Tax in Kentucky

Kentucky sales tax law, established in 1960, imposes a 6% state sales tax on most retail goods and taxable services. Sales tax in Kentucky applies to tangible personal property, while the Kentucky sales and use tax ensures compliance for out-of-state purchases.

Kentucky Sales Tax Rate

Kentucky’s base sales tax rate is 6.0%, and it applies uniformly across the state, as there are no additional local sales taxes.

Jurisdiction	Sales tax rate
State Tax	6.00%
County Tax	0.00%
City Tax	0.00%
Special Tax	0.00%
Combined Tax	6.00%

For more information on city-based tax rates in Kentucky check out Kintsugi’s City Level Sales Tax Guides.

Kentucky Sales Tax Calculator

Imagine you own a business in Lexington, Kentucky, and sell a television priced at $800. You want to calculate the sales tax and the total amount the customer will pay at checkout.

Step 1: Determine the Sales Tax Rate

In Kentucky, the state sales tax rate is 6%. Since there are no local taxes, the total sales tax rate is 6% (or 0.06 in decimal form).

Step 2: Calculate the Sales Tax

Use the formula for calculating sales tax:

Sales Tax = Item Price × Sales Tax Rate

Plug in the values:

Sales Tax = 800 × 0.06 = 48

The sales tax on the $800 television is $48.

Step 3: Calculate the Total Price

Add the sales tax to the original price of the item to determine the total amount the customer will pay:

Total Price = Item Price + Sales Tax

Total Price = 800 + 48 = 848

Final Answer:

The total price of the television, including sales tax, is $848.

Additional Considerations:

1. Exemptions: Certain items, such as prescription drugs and medical supplies, are exempt from Kentucky’s sales tax. Always check the Kentucky Department of Revenue guidelines for exemptions.
2. Use Tax: If a customer purchases an item from out-of-state and no sales tax is charged, they may owe use tax at the same 6% rate.
3. Remote Sales: Online businesses selling to Kentucky customers must collect the 6% sales tax if they meet the economic nexus threshold of $100,000 in gross sales or 200 transactions annually.

By following this method, businesses in Kentucky can calculate sales tax accurately, ensuring compliance with state regulations.

FAQ on Sales Tax in Kentucky

What is the Kentucky Sales Tax Rate?

The sales tax rate in Kentucky is 6%, with no additional local sales taxes applied statewide.

What is the Tax Rate in Kentucky for 2025?

For 2025, Kentucky’s state sales tax rate remains at 6%, uniformly applied across all jurisdictions.

How to Calculate Sales Tax in KY?

Multiply the item's price by the 6% sales tax rate. For example, on a $100 item: $100 × 0.06 = $6 in sales tax.

Sales Tax Nexus in Kentucky​

Kentucky’s base sales tax rate is 6%, and businesses must register for sales tax collection if they meet the state’s nexus thresholds or engage in taxable activities.

Effective Date	Threshold	Includable Sales (Gross, Retail, or Taxable)	When You Need to Register
October 1, 2018	$100,000 in gross sales or 200 transactions annually	Gross Sales	First of the month following 30 days after exceeding the threshold in the current calendar year.
Ongoing	Any physical presence in Kentucky	Retail and Taxable Sales	Immediately upon establishing physical presence, such as an office, warehouse, or employees.

FAQ on Sales Tax Nexus in Kentucky

What is the Sales Tax Nexus in Kentucky?

Sales tax nexus in Kentucky is established when a business has a physical presence or exceeds the economic nexus threshold of $100,000 in gross sales or 200 transactions annually.

What Constitutes Sales Tax Nexus in Kentucky?

Nexus in Kentucky is triggered by physical presence (e.g., office, employees, inventory) or economic activity meeting the $100,000 sales or 200 transactions threshold in the current calendar year.

Kentucky Sales Tax Exemptions​

Kentucky offers a range of sales tax exemptions to support specific industries, nonprofits, and government entities. These exemptions include purchases related to agriculture, manufacturing, and nonprofit activities that meet the state’s qualification criteria.

Category	Exemption Description
Agricultural Equipment	Farm machinery and equipment used directly in farming are exempt from sales tax.
Manufacturing Equipment	Machinery and tools used directly in manufacturing or industrial processes are exempt.
Nonprofit Organizations	Qualified nonprofits can claim exemptions for purchases directly related to their exempt activities.
Prescription Drugs	Prescription medications and certain medical supplies are tax-exempt.
Educational Institutions	Purchases made by qualifying schools and universities are exempt.
Government Purchases	Sales to federal, state, and local government agencies are tax-exempt.
Energy Used in Manufacturing	Energy consumed directly in the production process is exempt from sales tax.

FAQ on Sales Tax Exemptions in Kentucky

How do I Apply for a Kentucky Sales Tax Exemption Certificate?

To apply for a Kentucky Sales Tax Exemption Certificate, complete the Form 51A126 or other relevant forms for your exemption category. Submit the completed form to the seller when making exempt purchases. More details and forms can be found on the Kentucky Department of Revenue website.

What are the Kentucky Sales Tax Exemptions?

Kentucky sales tax exemptions include items like agricultural machinery, prescription drugs, and manufacturing equipment. For a detailed list, visit this blog on Kentucky sales tax exemptions or review the official exemptions guide.

What is the Kentucky SaaS Sales Tax?

SaaS (Software as a Service) is taxable in Kentucky as part of prewritten computer software. For a deeper dive into how SaaS is taxed, check this blog on Kentucky SaaS sales tax.

Does Kentucky have a Sales Tax on Clothing?

Yes, clothing in Kentucky is subject to the 6% state sales tax, as there are no exemptions for clothing items. Visit this blog on Kentucky clothing sales tax for more information.

What are the Exemptions for Sales Tax in Kentucky? 

Exemptions include agricultural equipment, energy used in manufacturing, nonprofit purchases, and prescription medications. These exemptions are outlined on the Kentucky Department of Revenue exemptions page.

What Items are Exempt from Sales Tax in Kentucky?

Items exempt from Kentucky sales tax include prescription drugs, agricultural machinery, manufacturing equipment, and energy used in production processes. Nonprofit organizations may also qualify for exemptions for certain purchases.

What is the Sales Tax on Clothing in Kentucky?

Clothing is taxed at Kentucky’s 6% sales tax rate, with no special exemptions for apparel items.

Is Clothing Taxable in Kentucky?

Yes, all clothing is taxable in Kentucky, as it is considered tangible personal property under state sales tax laws.

Kentucky Sales Tax Filing

Businesses must file Kentucky sales tax returns electronically using the Kentucky Department of Revenue portal. Returns are filed monthly, quarterly, or annually depending on sales volume.

What are the Kentucky Sales Filing Requirements?​

Businesses in Kentucky must file sales tax returns based on their assigned filing frequency (monthly, quarterly, or annually). All filings must be submitted electronically through the Kentucky Department of Revenue portal.

How often do I need to file sales tax in Kentucky?

Filing frequency is based on gross receipts and sales volume. High-volume businesses typically file monthly, while smaller businesses may file quarterly or annually.

How can I Apply for Kentucky Sales Tax Registration?

Registering for sales tax in Kentucky is essential for businesses selling taxable goods or services in the state, and it may require obtaining a resale certificate to purchase items tax-free for resale. The Kentucky Department of Revenue provides an online platform to simplify the registration process and ensure compliance with state tax regulations.

1. Visit the Kentucky Department of Revenue Registration Page: Go to the Kentucky Department of Revenue. Locate the option to “Register for Sales and Use Tax” or “Start a New Business.”
2. Create an Account on the Kentucky Online Gateway (KOG): If you’re a first-time user, click “Sign Up” to create an account in the Kentucky Online Gateway (KOG). Provide your email address, create a password, and verify your email to activate the account.
3. Log In to Your Account: After creating your account, log in to the system using your credentials. Navigate to the “Business Services” section to begin the registration process.
4. Start the Sales Tax Registration Process: Select the “Register a New Business” or “Sales and Use Tax” option. Fill out the online application with your business details.
5. Provide Required Business Information:
   • Business name and legal structure (e.g., LLC, sole proprietorship)
   • Federal Employer Identification Number (FEIN) or Social Security Number (for sole proprietors)
   • Business location and mailing address
   • Description of taxable goods or services your business offers
   • Date your business began or will begin taxable activities in Kentucky.
6. Add Additional Locations (if applicable): If your business operates in multiple locations, provide the details for each location where taxable sales occur in Kentucky.
7. Review and Submit Your Application: Carefully review the information you’ve entered for accuracy. Once you’re confident everything is correct, submit the application electronically.
8. Receive Your Sales Tax Permit: Upon approval, you’ll receive a Kentucky Sales Tax Permit, which authorizes your business to collect and remit sales tax.
9. Begin Collecting and Filing Sales Tax: Start collecting sales tax on all taxable sales immediately. Use the Kentucky Department of Revenue’s online portal to file returns and remit payments by the due date.

By following these steps, you’ll complete your Kentucky sales tax registration efficiently and ensure compliance with state tax laws. For further details, visit the Kentucky Department of Revenue.

Kentucky Sales Tax Due Date​

Sales tax returns are generally due on the 20th of the month following the reporting period. Businesses must adhere to these deadlines to avoid penalties.

Filing Frequency	Due Date
Monthly	20th of the following month
Quarterly	20th of the month following the quarter's end
Annually	January 20th of the following year

What Day is Kentucky Sales Tax Due?

Kentucky sales tax is due on the 20th of the month following the reporting period for all filing frequencies.

What is the Penalty for Filing Sales Tax Late in Kentucky?

The penalty for late filing is 2% per 30 days, up to a maximum of 20% of the unpaid tax, plus applicable interest on overdue balances.

For More Information

For more information on how to file your sales tax, visit the Kentucky Sales Tax Revenue Service website.