Sales Tax Exemptions in Kentucky
Kentucky has a sales tax holiday that exempts clothing, footwear, and school supplies priced at $100 or less per item from sales tax for three days in August. Food and ingredients are exempt from sales tax, except for specific items.
Sales Tax Obligations for Businesses
Businesses providing newly taxable services exceeding $6,000 in 2021 or 2022 must register to collect sales tax from January 1, 2023. The Kentucky Department of Revenue has communicated the new obligations to taxpayers.
Sales Tax Details
- Kentucky is a destination-based tax state.
- Sales tax collection depends on the customer’s location.
- Businesses in Kentucky collect tax based on the customer’s rate.
- Remote sellers collect based on the delivery or service site.
Sales Tax Exemptions on Utilities
Kentucky residents must provide a declaration of domicile to exempt utilities at their primary home from sales tax. Nonresidents with a second Kentucky home are required to pay sales tax on utilities.