Sales tax
Kentucky Sales Tax in 2026: The 6% Rate, Taxable Services, Registration and Filing
Kentucky sales tax 2026: a flat 6% with no local add-ons, the taxable services list, August 2026 changes, the permit, filing and vendor compensation.
Edited by Sumeet YadavFounder & editor, MSMETOOLS · fact-checked against official sources
Contents (10)
- 1. How Kentucky's sales tax works
- 2. Taxable services: the 2023 expansion and what followed
- 3. What's exempt: food, medicine and resale
- 4. Worked examples in dollars
- 5. Vendor compensation for paying on time
- 6. Registering for a Kentucky sales and use tax permit
- 7. Out-of-state sellers and marketplaces
- 8. Filing and paying
- 9. Common mistakes and how to fix them
- 10. What to do next
If you sell in Kentucky, whether you run a boutique in Lexington, a lawn care business in Louisville or an online store shipping into the state, this guide gives you the 2026 sales tax rules in one place. Kentucky is one of the simplest states for rates but one of the more complicated for services: one flat rate applies everywhere, yet dozens of everyday services are now taxable. We cover the 6% rate, the services list as it stands after the August 2026 changes, registration, filing and the vendor compensation you keep for paying on time. Everything was checked against Kentucky Department of Revenue guidance and the Kentucky Revised Statutes in October 2026.
Quick answer
Kentucky's sales tax rate is a flat 6% with no local sales taxes, so the same rate applies in every city and county. It covers goods, digital property and more than 50 listed services, from landscaping and cleaning to website hosting, and from August 1, 2026, data brokering services too.
Register through MyTaxes.ky.gov before your first sale; the permit has no listed fee
Returns are due by the 20th of the month and must be filed online
Paying on time earns vendor compensation of 1.75% then 1.5%, capped at $50 a period
Remote sellers register once Kentucky sales reach $100,000; the 200-transaction test ended August 1, 2026
Groceries are exempt; candy, soft drinks and prepared food are taxed
How Kentucky's sales tax works
Kentucky levies a single 6% tax on the gross receipts from retail sales. The Department of Revenue puts it simply: there are no local sales and use taxes in Kentucky. That makes the state unusual among its neighbors. Tennessee adds local rates of up to 2.75%, and Ohio and Missouri stack county and city taxes on top of the state rate, but a Kentucky retailer charges the same 6% at a storefront in Pikeville as at a stall in Paducah.
The tax covers three kinds of sales. The first is tangible personal property, such as clothing, furniture, vehicle parts and electronics, regardless of how it's delivered. The second is digital property, such as downloaded music, e-books and apps, whether you buy it outright, rent access or pay a subscription. The third is the long list of services named in KRS 139.200, which has grown steadily since 2018.
Use tax is the other half of the system. It applies at the same 6% when you buy taxable goods, digital property or extended warranties for use in Kentucky without paying Kentucky sales tax, typically from an out-of-state seller that doesn't collect it. A business that buys office equipment from a seller in another state and pays no tax owes Kentucky use tax on it.
Local governments still tax businesses, just not through sales tax. Many cities and counties charge an occupational license tax on wages and net profits, and some require a local business license. Hotels and short-term rentals collect a state transient room tax and local room taxes on top of the 6% sales tax on lodging. These are separate accounts and returns, so a lodging business registers for both.
Kentucky sales tax at a glance (2026)
6%
State rate
KRS 139.200
0%
Local sales tax
No city or county add-ons
$50
Max vendor compensation
Per reporting period
$100,000
Remote seller threshold
From August 1, 2026
Taxable services: the 2023 expansion and what followed
Kentucky's sales tax used to be mostly a tax on goods. That changed in two waves. A 2018 law added services such as landscaping, janitorial work, pet care, small animal veterinary care, laundry, linen supply, tanning, diet programs, extended warranties, admissions and some recreational activities. Then House Bill 8, passed in 2022, added more than 30 new service categories from January 1, 2023, in exchange for cuts to the individual income tax.
The 2023 additions reached many small businesses for the first time. They included photography and photofinishing, telemarketing, public opinion polling, lobbying, executive recruitment, website design and development, website hosting, private mailroom services, bodyguards, security system monitoring, private investigation, process servers, repossession, background checks, parking and valet, automobile club road services, timeshare exchanges, short-term rental of event space, event planning, recreational instruction, camp fees, personal training, massage, cosmetic surgery, body modification such as tattoos and piercings, some laboratory testing, interior design, household moving, specialized design, lapidary work, commercial refrigeration repair and labor to alter or repair clothing, shoes, watches and jewelry.
Because HB 8 left many of these terms undefined, the legislature passed House Bill 360 in March 2023, with most changes applying back to January 1, 2023. It widened telemarketing to cover solicitation by text message and social media, extended warranty services to cover contracts for prewritten software access, narrowed the exclusion for cosmetic surgery to procedures that are medically necessary, and removed marketing services from the list altogether. If your billing system still charges 6% on marketing retainers, check it against the current statute.
What changed on August 1, 2026
The 2026 revenue bill, House Bill 757 (2026 Acts Chapter 161), made the most recent changes. From August 1, 2026, data brokering services are taxable. The statute defines them as collecting, aggregating and analyzing personal data for sale to a third party, however the charge is structured, whether per use, per user, per license or by subscription. Sales of data brokering by state agencies, counties, cities and special districts are exempt, and certain contracts signed before the change are exempt too. The Department of Revenue told providers to register and begin collecting on receipts from sales made on or after August 1, 2026.
The same law brought pay phone service back into the tax base as part of communications services, ended the 200-transaction test for remote sellers, and created a new exemption for sales made directly by religious institutions within their religious function. Religious institutions that only registered to report their own sales can close those accounts after filing their July 2026 return.
Services that remain untaxed
Anything not on the KRS 139.200 list stays outside the sales tax. That includes legal, accounting, tax preparation, engineering, architecture, most consulting, medical and dental care, financial services, insurance, real estate brokerage, education tuition and haircuts. Car repair labor isn't on the list, though parts are taxable as goods. Construction labor isn't taxed, but contractors pay tax on the materials they buy and owe it on certain taxable services they purchase, a rule the department has explained in its guidance on sales of taxable services to builders.
The edges of the list are where mistakes happen. Non-medical massage is taxable but massage that is medically necessary isn't. Small animal veterinary care is taxable, but care for horses, cattle, poultry, pigs, sheep, goats and other farm animals isn't. Laboratory testing is taxable unless it's medical, educational, veterinary or required by law. Read the exact wording for your service, and if you're unsure, the department's TaxAnswers site carries frequently asked questions by category.
Taxable or not? Common Kentucky services in 2026
| Service | Taxed at 6%? | Note |
|---|---|---|
Lawn care, landscaping, snow removal | Yes | Since 2018 |
Residential and commercial cleaning | Yes | Janitorial services |
Website design and hosting | Yes | Since January 1, 2023 |
Photography, event planning, personal training | Yes | Since January 1, 2023 |
Marketing services | No | Removed by HB 360 back to January 1, 2023 |
Data brokering | Yes | From August 1, 2026 |
Legal, accounting, consulting | No | Not on the KRS 139.200 list |
Haircuts and car repair labor | No | Parts sold are taxable goods |
Lawn care, landscaping, snow removal
- Taxed at 6%?
Yes
- Note
Since 2018
Residential and commercial cleaning
- Taxed at 6%?
Yes
- Note
Janitorial services
Website design and hosting
- Taxed at 6%?
Yes
- Note
Since January 1, 2023
Photography, event planning, personal training
- Taxed at 6%?
Yes
- Note
Since January 1, 2023
Marketing services
- Taxed at 6%?
No
- Note
Removed by HB 360 back to January 1, 2023
Data brokering
- Taxed at 6%?
Yes
- Note
From August 1, 2026
Legal, accounting, consulting
- Taxed at 6%?
No
- Note
Not on the KRS 139.200 list
Haircuts and car repair labor
- Taxed at 6%?
No
- Note
Parts sold are taxable goods
What's exempt: food, medicine and resale
Food for home consumption is exempt. Candy, soft drinks, dietary supplements and prepared food don't count as food and are taxed at 6%, which covers restaurant meals, hot deli food and items sold with utensils. The department publishes a guide to classifying products as candy or food. A grocery store selling a bag of flour, a candy bar and a rotisserie chicken taxes the last two only.
Prescription drugs and many medical devices are exempt, as are sales for resale backed by a resale certificate and sales to qualifying nonprofit and government buyers that hold exemption certificates. Farmers buying equipment and supplies for farming use an agriculture exemption number, and sellers can check those numbers with the department's online agriculture exemption number search.
For drop shipments, Kentucky treats the deal as two sales: one from the supplier to the retailer, and one from the retailer to the customer. An in-state retailer gives its supplier a resale certificate, Form 51A105, and collects tax from the customer. An out-of-state retailer that isn't required to register can still give the Kentucky resale certificate with a note explaining it has no Kentucky account, and the Kentucky customer then owes use tax directly.
Worked examples in dollars
A Louisville furniture store. A customer buys a $1,250 dining table. Tax at 6% is $75, for a total of $1,325. If the store delivers the table to Bowling Green, the tax is still $75, because there are no local rates to change.
A Lexington landscaper. A homeowner pays $300 a month for lawn care, mulching and spring pruning. All of it is a taxable landscaping service, so the landscaper adds $18 a month and reports $3,600 of taxable receipts and $216 of tax over the year.
A web designer. A Covington freelancer builds a site for a client for $4,000 and hosts it for $40 a month. Both website design and website hosting are taxable, so the invoice shows $240 of tax on the build and $2.40 a month on hosting. If the same freelancer also writes the client's marketing plan for $1,500, that part is no longer taxable after HB 360, so it should be shown as a separate line.
A cash sale after July 15, 2026. A customer buys items totaling $10.62 including tax and pays in cash at a store with no pennies. The store still reports tax calculated to the cent, but rounds the cash total down to $10.60, because amounts ending in 1 or 2 cents round down to the nearest ten cents. A total of $10.63 would round up to $10.65.
Try it — 6% Kentucky sales tax on $1,250
Vendor compensation for paying on time
Kentucky lets you keep part of the tax you collect to cover the cost of collecting it. Under KRS 139.570, on each return you deduct 1.75% of the first $1,000 of tax due and 1.5% of the tax above $1,000. The total can't exceed $50 for any reporting period, and you lose it if the payment is late.
Here's how it plays out. A Frankfort gift shop with $600 of tax in a month keeps 1.75% of $600, or $10.50, and pays $589.50. A restaurant with $3,000 of tax keeps $17.50 on the first $1,000 and $30 on the next $2,000, for $47.50, and pays $2,952.50. A larger store with $10,000 of tax would calculate $152.50, but the cap limits it to $50, so it pays $9,950. Sellers using a certified service provider under the Streamlined Sales Tax Agreement are compensated under that agreement instead.
The cap means vendor compensation matters most to small businesses. For a seller collecting $2,500 a month, it's worth about $480 a year, enough to cover a bookkeeping subscription. Late payment forfeits it and adds penalties and interest, so it pays to schedule payments a few days before the due date.
Kentucky sales tax changes to know
July 1, 2018
First wave of taxable services, including landscaping, janitorial and pet care
January 1, 2023
HB 8 adds more than 30 service categories
March 24, 2023
HB 360 clarifies definitions retroactively and removes marketing services
July 15, 2026
Rounding cash totals to the nearest nickel becomes mandatory when pennies are unavailable
August 1, 2026
Data brokering and pay phone services taxed; 200-transaction remote seller test removed
Registering for a Kentucky sales and use tax permit
You need a sales and use tax permit for each place of business before you sell taxable goods or services in Kentucky. The process has a few steps. Sole proprietors and general partnerships register with the county clerk, while LLCs and corporations register with the Secretary of State. Then get a federal EIN, which the department encourages even for sole proprietors without employees, because it keeps your Social Security number off business forms.
Next, complete the Kentucky Tax Registration Application. The fastest route is online at MyTaxes.ky.gov; the paper version is Form 10A100, which can take up to three weeks to process if mailed, faxed or emailed. The same application can open withholding, transient room tax and other accounts. The department doesn't list a fee for the sales and use tax permit. Have your entity details, owners' information, business locations, a description of what you sell and the date of your first sale ready.
Finally, check with your city and county. Many require a local business license or charge an occupational license tax on payroll and profits, which is separate from sales tax and filed with the local government. To change your business name, address or owners, or to close an account, use MyTaxes or Form 10A104, and file name changes with the Secretary of State first.
Temporary sellers, such as vendors at fairs, roadside stands and carnivals who don't have a permanent place of business, report on a nonpermit basis under department rules instead of holding a regular permit.
Before your first Kentucky sale
0/6Out-of-state sellers and marketplaces
Kentucky has required remote retailers to collect since October 1, 2018, after the Wayfair decision. Until July 31, 2026, the test was 200 or more sales into Kentucky or $100,000 in gross receipts in the current or previous calendar year. House Bill 757 removed the transaction test from August 1, 2026, so the only economic threshold now is $100,000 in gross receipts.
The department says remote retailers and marketplace providers whose only reason for registering was the transaction count are no longer required to hold a permit. If you registered only because of 200 small orders and your Kentucky receipts are under $100,000, review your position and consider closing the account through MyTaxes after filing your final return. Any seller with a physical presence in Kentucky, such as employees, a warehouse or inventory, must register whatever its sales.
Marketplace providers such as Amazon, Etsy and eBay collect and file for the sales they facilitate, under KRS 139.550. A seller whose only Kentucky sales go through a collecting marketplace doesn't need its own permit. Kentucky is a full member of the Streamlined Sales Tax Agreement, so remote sellers can register through the Streamlined system and use a certified service provider.
Filing and paying
KRS 139.550 sets the default: a monthly return due on or before the 20th of the month. The department assigns monthly, quarterly or annual filing based on your registration, then reviews accounts each year and usually adjusts frequencies in June, with a notice to affected businesses. If the 20th falls on a weekend or holiday, the return is due the next business day. A July return, for example, is due August 20.
All sales tax returns and payments must be filed online. The department's mandate covers monthly, quarterly and annual accounts and allows waivers only for businesses without internet access or with documented technical problems. You link your business to a MyTaxes account using a portal PIN, then file and pay there. Electronic check payments have no convenience fee; card payments carry processor fees.
File a return for every assigned period even if you had no sales. Report tax on credit sales when you make the sale, not when the customer pays. Keep resale and exemption certificates for every tax-free sale, because in an audit the department presumes all sales are taxable unless you can prove otherwise.
Common mistakes and how to fix them
Adding a local rate. Some point-of-sale systems default to a combined rate by ZIP code and add a phantom local tax. Kentucky has none. If you've over-collected, you must either refund customers or pay the extra to the state; you can't keep it.
Missing a newly taxable service. Event planners, photographers, personal trainers, movers and tattoo studios that opened before 2023 sometimes still don't charge tax. Unpaid tax plus penalties and interest falls on you, not your customers. If you've missed it, the department's voluntary disclosure process can reduce penalties.
Still taxing marketing services. HB 360 removed them retroactively to January 1, 2023. Charging tax you don't owe creates a refund obligation to customers.
Keeping a permit you no longer need. Remote sellers registered only because of the old 200-transaction test can close their accounts, but must file every return due until they do.
Rounding the tax instead of the total. The July 2026 law requires rounding cash totals when pennies are unavailable, but KRS 139.210 says you still owe tax calculated to the cent, whatever the customer pays with.
What to do next
Register through MyTaxes before your first sale, check whether each service you offer appears on the KRS 139.200 list, and set your system to a flat 6% with no local add-ons. Use the sales tax calculator to check invoices and our how to calculate sales tax guide to back tax out of a tax-included price. Selling across the border too? Compare our Tennessee, Ohio and Indiana sales tax guides.
This is general information, not legal or tax advice — confirm on the official source or with a professional.
Frequently asked questions
Kentucky charges a flat 6% sales and use tax, and there are no local sales taxes, so the rate is the same in Louisville, Lexington, Bowling Green and every other part of the state. The 6% applies to retail sales of goods, digital property and a long list of services. Hotels also charge separate transient room taxes, which are not part of the sales tax rate.
No. The Department of Revenue states plainly that there are no local sales and use taxes in Kentucky. Cities and counties raise money through occupational license taxes on wages and business profits, and some charge local transient room taxes on lodging, but a shop never adds a city or county sales tax to the 6% state rate.
KRS 139.200 lists more than 50 taxable services, including landscaping, janitorial and cleaning, pet care, small animal veterinary care, photography, website design and hosting, telemarketing, private investigation, parking, event planning, fitness training, massage, tattooing, household moving, interior design and repairs to apparel or jewelry. From August 1, 2026, data brokering services and pay phone service were added. Legal, accounting and most consulting services remain untaxed.
You apply through the Kentucky Tax Registration Application, online at MyTaxes.ky.gov or on paper Form 10A100, and the Department of Revenue doesn't list a fee for the sales and use tax permit. You need a permit for each place of business. Paper applications can take up to three weeks to process, so applying online is faster.
Returns are due by the 20th of the month after the end of each filing period. Most businesses file monthly; smaller ones may be assigned quarterly or annual filing. All sales tax returns and payments must be filed online through MyTaxes.ky.gov unless you qualify for a hardship waiver. If you file and pay on time, you keep vendor compensation of up to $50 a period.
Yes, once they reach $100,000 in gross receipts from Kentucky sales in the current or previous calendar year. From August 1, 2026, House Bill 757 removed the separate test of 200 transactions, so a remote seller with many small orders but under $100,000 no longer has to register. Any seller with a physical presence in Kentucky must register regardless of sales.
Sources & verification
Figures on this page were checked against the sources below when it was last reviewed on 9 October 2026. Each rate and limit is stored once with its own official source and review date, and official update channels are monitored daily so changes are picked up. How we verify
- 1.Sales & Use Tax — Kentucky Department of Revenue · accessed 9 October 2026
- 2.KRS 139.200 — Imposition of sales tax — Kentucky General Assembly · accessed 9 October 2026
- 3.Sales Tax Facts — Summer 2026 — Kentucky Department of Revenue · accessed 9 October 2026
- 4.House Bill 757 (2026 Regular Session) — bill record and summary — Kentucky General Assembly · accessed 9 October 2026
- 5.KRS 139.570 — Reimbursement of seller's collection costs — Kentucky General Assembly · accessed 9 October 2026
- 6.KRS 139.550 and 139.540 — Returns and due dates — Kentucky General Assembly · accessed 9 October 2026
- 7.KRS 139.240 — Application for retailer's permit — Kentucky General Assembly · accessed 9 October 2026
- 8.Business Registration — Kentucky Department of Revenue · accessed 9 October 2026
- 9.Online Filing and Payment Mandate for Sales and Excise Tax Returns — Kentucky Department of Revenue · accessed 9 October 2026
- 10.Kentucky Retail Packet — Frequently Asked Questions — Kentucky Department of Revenue · accessed 9 October 2026
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