The Kentucky sales and use tax is imposed on receipts from sales of tangible personal property and enumerated services. A use tax is imposed on the purchase and use within Kentucky of tangible personal property and enumerated services where sales tax was not charged by the retailer. The state sales and use taxes are imposed at the rate of 6%. There are no local sales or use taxes in Kentucky.
Kentucky conforms to the provisions of the Multistate Streamlined Sales and Use Tax Agreement (SSUTA).
For all participating states, the SSUTA sets uniform definitions of sales and use tax terms, a central registration system, simplified local sales and use tax collection procedures, and uniform standards for:
(a) the sourcing of transactions to taxing jurisdictions;
(b) the administration of exempt sales;
(c) the allowances a seller can take for bad debts; and
(d) sales and use tax returns and remittances.
For those Kentucky Derby enthusiasts, you might be interested in knowing that, with certain exceptions, sales of horses are generally subject to the Kentucky sales and use taxes.
And should you have a winner in the Derby, please note that fees paid for breeding a stallion to a mare within Kentucky are subject to the state sales and use taxes.
Otherwise, Kentucky is one of the more straightforward states from a sales and use tax perspective. With a low sales tax rate and no local sales or use taxes, Kentucky is generally sales tax friendly.
Stay tuned for more of Jeff's EYE ON series as he blogs aboout sales and use tax State by State.