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Most businesses starting in Kentucky that are 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 employer’s withholding tax and a variety of other registrations.

Check out the rest of this guide to find out who needs a sales tax permit, what products and services are taxable, how to register for a permit and reporting requirements.

Who needs a sales tax permit in Kentucky?

A business must register for a sales tax permit in Kentucky when:

  • A business has “nexus” (significant presence in the state) such as a retail store, office or warehouse where products are produced, stored and/or delivered
  • Occasionally selling items at craft shows, fairs, seminars, conventions, etc in Kentucky
  • Employees (including sales representatives or agents) are working in Kentucky
  • An online business located in Kentucky is selling taxable products to Kentucky residents
  • An out-of-state business selling to Kentucky residents and one of the following:
    • Total sales of tangible personal property to Kentucky residents is $100,000 or more; or
    • Having 200 or more transactions to Kentucky residents.

What products and services are taxable in Kentucky?

Physical products

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

Digital products are taxable in Kentucky.

Services

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 Kentucky One Stop or by mailing in the 10A100 Form.

Information needed to register includes:

  • Effective date of a business starting, hiring employees or selling products or offering services that are taxable
  • Legal business name
  • Doing Business As Name (DBA)
  • Federal Employer Identification Number (FEIN), or SSN 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
  • Business structure (Sole Proprietorship, Partnership, Corporation, LLC)
  • Names, 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

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 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.

Sales tax reporting

How is sales tax collected?

When a business makes a sale of a taxable product or service, the business charges the appropriate sales tax rate to the customer.  This tax is collected by the business who then sends it to the Kentucky Department of Revenue.

How much sales tax is charged?

The statewide sales tax rate in 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 volume of annual sales, 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 the 20th day of the month following the reporting period, unless the 20th falls on a weekend or federal holiday, in which case 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 occurred.

Sales tax on purchases for resale

A business is able to 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 in many cases require the reseller to fill out a Resale Certificate (Form 51A105) to document the items being purchased are for resale. 

Questions

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
Phone: 502-564-5170

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