This blog was last updated on October 15, 2026
Kentucky Sales Tax
Kentucky imposes a 6% statewide sales and use tax. Cities and counties do not add a general local sales tax, which makes the rate structure simpler than in many other states. The rules governing what is taxable, who must register and which exemptions apply still require transaction-specific analysis.
What’s taxable in Kentucky?
Kentucky sales and use tax generally applies to retail sales of tangible personal property, digital property and services specifically listed in state law. Sellers of taxable products or services must collect and remit tax when they have a Kentucky collection obligation.
Common examples include:
- Clothing and apparel
- Prewritten computer software and prewritten computer software access services, including many SaaS offerings
- Specified digital property, depending on the product, delivery method and rights provided
- Telecommunications services
- Certain landscaping, janitorial, parking and household moving services
- Prepared food, candy, soft drinks and dietary supplements
Sales tax nexus in Kentucky
A business may have to register, collect and remit Kentucky sales and use tax when it has physical nexus or exceeds the state’s economic nexus threshold.
Physical nexus
Physical nexus may arise from maintaining property, inventory, an office or another place of business in Kentucky, or from in-state activities performed by employees, agents or other representatives. The outcome depends on the particular activities and facts.
Economic nexus for remote sellers
A remote retailer meets Kentucky’s economic nexus threshold when, during the previous or current calendar year, it has either:
- $100,000 or more in gross receipts from Kentucky sales; or
- 200 or more separate Kentucky sales.
Once either threshold is met, the seller should begin the registration process and collect Kentucky sales and use tax prospectively. Marketplace-provider rules may affect who is responsible for collecting tax on marketplace sales.
Kentucky sales tax exemptions
Kentucky provides product-, entity- and use-based exemptions. Many are subject to definitions, qualifying uses, approval requirements and documentation. Examples may include:
- Food and food ingredients for home consumption, while prepared food, candy, soft drinks and dietary supplements remain taxable
- Prescription drugs and certain prescribed medical devices
- Certain qualifying agricultural machinery, supplies and inputs
- Qualifying manufacturing machinery and energy used directly in eligible manufacturing processes
- Certain required textbooks and qualifying educational materials
- Qualifying data-center property under applicable Kentucky provisions
- Certain investment-grade bullion. The exemption applies retroactively to March 27, 2025; jewelry and collectible items are not generally covered by the same treatment
- Sales for resale and qualifying sales to approved governmental, charitable, educational, nonprofit or religious organizations
An organization’s federal tax status does not, by itself, establish that every Kentucky purchase is exempt. The purchaser, transaction, use and supporting documentation must satisfy the applicable Kentucky requirements.
How to document an exemption
A purchaser claiming an exemption generally must give the seller the certificate or documentation applicable to that exemption. Common forms include:
- Kentucky Form 51A105, Resale Certificate – for qualifying resale purchases.
- Kentucky Form 51A260, Streamlined Sales Tax Certificate of Exemption – for eligible exemption claims under the form’s instructions.
Not every certificate or exemption reason applies to every transaction. Kentucky limits the Multistate Tax Commission uniform certificate to resale use, and it may not be used to claim resale treatment for a taxable service.
Filing and remittance
Kentucky requires electronic filing and payment for designated sales and excise tax returns as the Department of Revenue makes electronic functionality available for the applicable tax type. Filing frequency is assigned by the Department and can vary by account.
Frequently asked questions
Is Kentucky a Streamlined Sales Tax state?
Yes. Kentucky is a member of the Streamlined Sales and Use Tax Agreement, which standardizes defined elements of sales and use tax administration among participating states.
Does Kentucky have a sales tax holiday?
Kentucky does not currently offer a general sales tax holiday.
Does Kentucky tax shipping and delivery charges?
Generally, delivery charges associated with a taxable sale are taxable. The treatment can depend on the underlying sale and the facts of the transaction.
Is Kentucky origin- or destination-based?
Kentucky generally uses destination sourcing for shipped sales. Specific sourcing rules and exceptions may apply.
Is clothing taxable in Kentucky?
Yes. Clothing is generally taxable at the 6% state sales tax rate.
Is SaaS taxable in Kentucky?
Kentucky taxes prewritten computer software access services. This category, effective January 1, 2023, includes many arrangements commonly described as SaaS. The contract and delivery model should be reviewed because not every technology service is identical.
Can a non-Model 1 seller use the Simplified Electronic Return?
Kentucky accepts the Simplified Electronic Return from eligible filers and transmitters that satisfy applicable Streamlined Sales Tax and Kentucky technical requirements. Use of the return is not limited solely to Model 1 sellers.
What point-of-sale fees may apply?
Kentucky imposes product- or service-specific charges in addition to sales tax, including telecommunications-related E911/988 charges and the motor vehicle tire fee. Applicability depends on the product or service sold.
How to register for Kentucky sales tax
Businesses selling taxable products or services to Kentucky customers may need to register before collecting tax. Registration information is available through the Kentucky Department of Revenue.
Register a business with the Kentucky Department of Revenue
Official resources
Important: This guide provides general information and does not constitute legal or tax advice. Kentucky taxability, nexus, exemption and filing outcomes depend on the facts. Check current Department of Revenue guidance before acting.