Kentucky Sales Tax

The Kentucky State’s Sales tax is 6%, and it applies to the sale of goods or services that are not exempt from the tax. If you have questions about sales taxes in Kentucky, consult an accountant. The new law expands the types of services that are subject to the sales tax, including personal fitness training, photography, home security monitoring, and more. It also includes ride-share companies, transportation network company services, and taxicabs.

In addition, a 6% excise tax will be imposed on the gross receipts of limousine services. It will be collected by the service provider and remitted to the state. The tax will be split evenly between the state’s general fund and road fund. Kentucky is a destination-based sales tax state, meaning that Kentucky’s sales tax rate is determined by the buyer’s location when the transaction occurs. This can complicate the process of calculating and filing sales tax returns.

Another new law that went into effect this year is a provision that requires businesses that offer continuous, automatic renewals to clearly show the terms of their subscriptions and receive the customer’s consent before increasing rates for services they originally offered for free or at a discounted rate. The law also imposes an annual fee on owners of electric vehicles to help improve the state’s roads.

Kentucky Sales Tax Due Date

If you sell taxable goods or services in Kentucky, you are required to collect sales tax and file returns on time. You may be subject to a penalty and interest charges if you don’t. Generally, Kentucky sales tax filings are due on the 20th day of the month following the reporting period. If the filing due date falls on a weekend or holiday, the return is due the next business day.

Kentucky Sales Tax Exemption

To collect sales tax in Kentucky, you must have a valid sales and use tax permit. Certain customers, such as government agencies and some nonprofit organizations, are exempt from paying sales tax. It’s important to keep up-to-date on exemption laws and to collect a valid resale certificate from buyers. Certain goods and services are exempt from Kentucky Sales Tax, including prescription drugs, prosthetic devices, groceries, soft drinks, and vending machine sales.

To claim an exemption from sales tax, you must present a valid sales tax exemption certificate to the seller at the time of each purchase. The certificate must be for a qualifying entity, such as a government agency, 501(c)(3) charitable, educational, or religious institution, or Kentucky historical site. Kentucky also requires that non-collecting sellers notify customers of their potential use tax liability and provide them with a customer information report. For a complete list of sales tax exemptions in Kentucky, see Revenue Form 51A126.