Key takeaways
- Kentucky sales tax rates: A flat 6% rate applies statewide with no local sales taxes, so the same rate covers all taxable sales of tangible personal property, digital property and specified services.
- Economic nexus: Remote sellers must collect once sales into Kentucky exceed $100,000 or 200 transactions in the current or previous calendar year. Under HB 757, the 200-transaction threshold is eliminated effective August 1, 2026.
- Filing & penalties: Returns are due on the 20th of the month after the period, with a timely-filing discount capped at $50 per return. Late filing and late payment each cost 2% per 30 days, up to 20%.
Kentucky sales tax key facts (2026)
| Item | Kentucky |
|---|---|
| Statewide rate | 6% (no local sales tax) |
| Economic nexus threshold | $100,000 or 200 transactions (200-prong ends Aug 1, 2026) |
| Sourcing | Destination-based |
Collect and file Kentucky sales tax with Taxually: LumaTax monitors your nexus, registers you and files your returns.
Is SaaS taxable?
Yes (since Jan 1, 2023).
| Item | Kentucky |
|---|---|
| Digital property | Taxable |
| Groceries | Exempt (candy/soda/prepared food taxable) |
| Timely-filing discount | 1.75% / 1.5% (max $50 per return) |
| Return due date | 20th of the month after the period |
| Governing agency | Kentucky Department of Revenue |
What is the sales tax rate in Kentucky?
Kentucky’s sales and use tax rate is a flat 6% with no local sales taxes — the same rate applies statewide to taxable sales of tangible personal property, digital property, and specified services.
Do you have sales tax nexus in Kentucky?
Nexus is the connection that obligates your business to collect and remit Kentucky sales tax. You can establish it two ways — physically or economically. Either one is enough.
Physical nexus
You have physical nexus if you have a tangible presence in Kentucky, such as:
- A business location in Kentucky (office, warehouse, or distribution center)
- Employees or representatives who solicit and accept orders in the state
- Leasing or owning property in Kentucky
- Storing inventory in a Kentucky warehouse
- Participating in trade shows or craft fairs in Kentucky for 15 days or more a year
Economic nexus
Out-of-state sellers establish economic nexus once sales into Kentucky exceed $100,000 in gross revenue or 200 separate transactions in the current or previous calendar year. Heads-up: under HB 757, Kentucky will eliminate the 200-transaction threshold effective August 1, 2026 — after that, nexus is based on the $100,000 dollar amount only.
What is taxable in Kentucky?
Tangible personal property and digital property are generally taxable; notable exemptions include prescription medicine and certain farm and construction equipment. Most services are not taxed, but Kentucky has expanded the list of taxable services in recent years.
Is SaaS taxable in Kentucky?
Yes. SaaS has been taxable in Kentucky since January 1, 2023 (as a prewritten computer software access service). Digital property is taxable too.
How is food taxed in Kentucky?
Most groceries are exempt. Candy, soft drinks, and prepared foods are taxable at the 6% rate.
How to register for a Kentucky sales tax permit
Obtain a sales and use tax permit before collecting. Taxually can register for you, or you can apply online through the Kentucky Business One Stop Portal or by mailing Form 10A100. Registration is free.
Have ready: effective date, legal business name, any previous account numbers, primary business location, ownership type, NAICS code, and your SSN or EIN.
How to collect sales tax in Kentucky
Simple here: with no local taxes, collect a flat 6% on all taxable Kentucky sales, whether you’re in-state or remote.
Filing and paying Kentucky sales tax
Returns are due the 20th of the month following the period, with monthly, quarterly, or annual frequency based on your liability. Kentucky offers a timely-filing discount of 1.75% on the first $1,000 of tax and 1.5% on the amount above $1,000, capped at $50 per return.
File and pay through the Kentucky DOR’s KY E-Tax / One Stop system. Taxually’s software automates the full process.
Penalties for late or non-compliant filing
Failing to file or pay on time triggers these penalties:
- Late filing: 2% of the tax due per 30 days, up to 20%.
- Late payment: 2% of the tax due per 30 days, up to 20%.
- Interest accrues on unpaid tax at the rate set annually by the Department.
Frequently asked questions
What is the sales tax rate in Kentucky in 2026?
A flat 6% statewide, with no local sales taxes.
What is the economic nexus threshold for Kentucky?
$100,000 in gross revenue or 200 transactions in the current or previous calendar year. The 200-transaction threshold is scheduled to be removed on August 1, 2026 (HB 757).
Is SaaS taxable in Kentucky?
Yes. SaaS has been taxable since January 1, 2023, and digital property is taxable too.
Are groceries taxed in Kentucky?
Most groceries are exempt. Candy, soft drinks, and prepared food are taxable.
When are Kentucky sales tax returns due?
The 20th of the month following your reporting period.
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