Sales and use taxes
What goods are subject to sales and use tax in your state (at both state and local level)?
Kentucky sales tax applies to each retailer’s gross receipts derived from sales of non-exempt tangible personal property, including natural, artificial, and mixed gas, electricity, water, steam, and prewritten computer software, as well as digital property (Kentucky Revised Statutes (KRS) 139.200). Kentucky use tax applies to non-exempt tangible personal property used in Kentucky that was purchased for use in Kentucky.
What is the state sales tax rate?
Kentucky’s sales tax rate is 6%.
What is the range of local sales tax rates levied in your state?
There are no local sales taxes in Kentucky.
What goods are exempt from sales and use tax?
Certain goods are exempt from sales and use tax including coal and other energy-producing fuels, certain medical items, locomotives or rolling stock, certain farm machinery and livestock, certain seeds and farm chemicals, machinery for new and expanded industry, tombstones, textbooks, property certified as an alcohol production facility, aircrafts and replacement parts, food purchased with food stamps, recycling machinery, repair and replacement parts of certain trucks and buses, and donated food items (KRS 139.480). Additional goods that are exempt include certain materials, supplies, and tools used in manufacturing, water used in the raising of equine as a business, newspaper inserts and catalogues delivered out of state, uranium sold out-of-state, and metal retail fixtures sold out-of-state (KRS 139.470). Motor vehicles, gasoline, and special fuels are exempt from sales and use tax but subject to excise taxes imposed pursuant to KRS Chapter 138 (KRS 139.470). Food for human consumption and medical supplies and equipment are exempt (KRS 139.485; KRS 139.472). There are exemptions for other items.
Certain transactions are exempt, including sales for resale, occasional sales, and sales to certain charitable organizations and non-profit institutions. Gross receipts from the sale, storage use or other consumption in Kentucky of tangible personal property or digital property which is prohibited from taxation by the Federal or Kentucky Constitutions are also exempt.
Are any services taxed?
Sales tax is imposed on specifically enumerated services (KRS 139.200), including:
- rental of any room, lodgings or accommodations for a period of less than 30 days;
- sewer services to non-residential consumers;
- admissions with the most notable exception being race track admissions;
- prepaid calling services;
- communications services; and
- distribution and transmission of natural gas to non-residential consumers.
Effective July 1 2018, sales and use tax is also imposed on:
- labor and services associated with the repair, installation, and maintenance of taxable tangible personal property, though an exemption is included for manufacturers and industrial processors;
- landscaping and lawn care services;
- janitorial services;
- pet care (small animal) veterinarian services;
- industrial laundry services; dry cleaning services;
- linen supply services;
- pet grooming and boarding services;
- diet and weight reducing services;
- tanning services;
- limousine services; and
- many additional admissions.
What filing requirements and procedures apply?
A taxpayer’s sales tax return generally must be filed by the 20th of the month following the reporting period, unless the Kentucky Department of Revenue authorizes quarterly or annual tax return filings (KRS 139.540).