Kentucky Sales & Use Tax

Economic Nexus

Effective December 1, 2018, marketplace facilitators are also retailers. Effective July 1, 2018, remote sellers selling tangible personal property or digital property delivered or transferred electronically to a purchaser in Kentucky to collect sales tax, if the remote seller had 200 or more separate transactions in the state or their gross receipts exceeded $100,000 in the previous or current calendar years.

To learn more, read our article on how economic nexus affects your business.

Physical Nexus

Your business has physical nexus if it has any of the following items within the state of Kentucky:

Physical offices or storefronts
Employees reside in the state
Affiliates who refer business either directly or indirectly to the retailer of tangible products
Tradeshow presence

Here is a more extensive list of what the state of Kentucky considers instances of creating sales tax nexus.

Taxability

In general, Kentucky imposes tax on the retail sales price of tangible personal property, digital property, and sales of certain services. Physical products are taxable in-state with a few exceptions. Taxability can change state to state and often depends on how your product/services are defined.

Determine whether software and SaaS are subject to taxation here.

Like much of sales tax, this can often be difficult to manage alone. Reach out if you need help understanding the taxability of your products/services.

When Are Sales Taxes Due?

Sales tax returns are dependent upon the state's due dates and the vendor's filing frequency. If the seller exceeds the economic threshold, they are liable to file on a monthly basis. If the seller does not exceed the threshold, then returns could be due quarterly or annually. The state of Kentucky's due dates vary, it is best to contact the state to determine when returns are due.