How to Register for a Sales Tax Permit in Kentucky
Most businesses starting in Kentucky selling a product or offering certain services will need to register for a sales tax permit. This is commonly referred to as a seller’s permit, sales & use tax permit, sales tax license, sales tax number, or sales tax registration.
The sales tax permit is obtained through the Kentucky Department of Revenue as a part of the Kentucky Tax Registration Application. In addition to registering for sales and use tax, a business can also register for employers’ withholding tax and a variety of other registrations.
Check out the rest of this guide to determine who needs a sales tax permit, what products and services are taxable, how to register for a permit, and reporting requirements.
Also See: Guide to Starting a Business in Kentucky
Who needs a sales tax permit in Kentucky?
A business must register for a sales tax permit in Kentucky when:
- A business has sales tax nexus. Nexus means having a physical presence in the state, such as having a physical location like a retail store or office or using a warehouse or fulfillment center to store inventory.
- Occasionally selling items at craft shows, fairs, seminars, conventions, etc. in Kentucky
- Employees (including sales representatives or agents) are working in Kentucky
- Renting or leasing tangible or digital property
- An online business located in Kentucky is selling taxable products to Kentucky residents
- A remote seller meets one of the following scenarios:
- Making total sales of tangible personal property to Kentucky residents of $100,000 or more; or
- Shipping 200 or more transactions to Kentucky residents.
What products and services are taxable in Kentucky?
There are a few exceptions, but almost all physical products are taxable when sold at retail in Kentucky. Common examples include:
- Sale of tangible personal property – General merchandise like vehicles, furniture, appliances, and clothing
- Lease or rentals of tangible personal property
- Qualifying food, prescriptions, and medical appliances
Prescription drugs, some medical devices, and food/food items (with the exception of candy, soft drinks, and prepared foods) are tax-exempt.
Digital products are taxable in Kentucky.
Most services aren’t taxable in Kentucky, however, there are a few exceptions, some of which include:
- Admissions (concerts, sporting events, etc.)
- Memberships (gym, golf courses, etc.)
- Short-term lodging
- Installation of replacement parts for tangible property (auto repair shop, computer repair, furniture repair, etc.)
- Production, fabrication, processing, or printing of tangible property (sign making, window tinting, embroidery, screen printing, engraving, etc.)
- Landscaping services
- Janitorial services
- Small animal veterinary services
- Pet care services (pet grooming or pet boarding)
- Dry cleaners
- Indoor skin tanning services
How to register for a sales tax permit in Kentucky
A sales tax permit can be obtained by filling out the Kentucky Tax Registration Application online through the Kentucky Business One Stop or by mailing in the 10A100 Form.
Information needed to register includes:
- The effective date of the business starting, hiring employees or selling products, or offering taxable services
- Legal business name
- Doing Business As Name (DBA)
- Federal Employer Identification Number (FEIN) from the IRS, or owner’s Social Security Number if a sole proprietorship with no employees
- Kentucky Commonwealth Business Identifier
- Secretary of State of State Organization Number
- Primary business location address and phone number
- Business operations (home-based, web-based, office/store-based, transient)
- Accounting period (calendar year or fiscal year)
- Accounting method
- Type of business entity: Sole Proprietorship, General Partnership, Limited Liability Partnership, Corporation, Limited Liability Company (LLC)
- Name, social security number, driver’s license number, and addresses of owners/officers/members
- Description of what products or services are being sold
- North American Industry Classification System (NAICS) code
- Estimated monthly sales tax collected
- Employee information
Sales tax reporting
How is sales tax collected?
When a business sells a taxable product or service, the business charges the appropriate sales tax rate to the customer. This tax is collected by the business which is then sent to the Kentucky Department of Revenue.
How much is sales tax in Kentucky?
The statewide sales tax rate in the state of Kentucky is 6%. There are no additional local, municipal, city, or county taxes.
When are Kentucky sales tax returns due?
The Department of Revenue will determine a filing frequency based on the expected annual sales volume, which will be monthly, quarterly, semiannually, or annually. Generally, a business selling over $1,200 monthly in taxable sales will file monthly.
Filings are due on the 20th day of the month following the reporting period, unless the 20th falls on a weekend or federal holiday, which would move to the next business day.
Even if the business had no sales during the reporting period, a filing is still required indicating no sales.
How much does a sales tax permit cost in Kentucky?
There is no cost for a sales tax permit in Kentucky.
How long does it take to get a Kentucky sales tax account number?
Expect 2-3 weeks to receive your Kentucky sales tax number.
Do you have to renew your Kentucky sales tax permit?
The sales tax permit is a one-time registration, and no renewals are needed. Be mindful that if any information about the business changes, such as the mailing address, additional locations, or change in ownership, those changes need to be updated with the Department of Revenue.
Is a business license the same thing as a sales tax license?
In addition to registering for a sales tax permit, there may be other business licenses needed before starting a business in Kentucky.
How do I get a wholesale license in Kentucky?
A business can purchase items to resell without paying state sales tax. The tax liability is passed from the wholesaler or distributor to the retailer, who will then charge sales tax to the end-user of the item.
Wholesalers and distributors will require a sales tax number and a completed Kentucky Resale Certificate (also referred to as a wholesale license, seller’s permit, or sales tax exemption certificate) to document the items being purchased are for resale.
If you have questions about the sales tax permit, the Kentucky Department of Revenue has a guide to sales taxes in Kentucky or can be contacted:
Kentucky Taxpayer Service Center
Department’s Division of Sales and Use Tax
PO Box 181
Frankfort, KY 40602-0181