Free Kentucky Sales Tax Calculator

Kentucky Sales Tax Calculator

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How to Use the Kentucky Sales Tax Calculator

Our Kentucky Sales Tax Calculator is designed to be simple and intuitive. Just follow these easy steps to calculate the sales tax on your purchases in Kentucky:

1. Enter Purchase Amount:

In the “Purchase Amount ($)” field, enter the total cost of the items you are purchasing.
Use numerals and decimals only (e.g., 100, 54.99, 235.75).

2. Select Location:

You have two options to specify your location:
- ZIP Code: Choose your ZIP code from the “Select ZIP Code” dropdown menu.
- Tax Region: If you don’t know the exact ZIP code, select the broader tax region from the “OR Select Tax Region” dropdown menu.

3. Calculate:

Once you’ve entered the purchase amount and selected your location, click the “Calculate” button.

4. View Results:

The calculator will instantly display the following details:
- Purchase Amount: The amount you entered.
- Tax Rate (Combined): The total sales tax rate for your location (state + local).
- State Tax: The amount of state sales tax.
- Local Tax: The amount of local sales tax (if applicable).
- Total Sales Tax: The combined state and local sales tax.
- Total Cost: The final cost of your purchase, including sales tax.
- Location: The ZIP code or tax region you selected.

Kentucky Sales Tax Exemption Threshold Increased

Starting January 1, 2025, Kentucky has increased the gross receipts exemption threshold for certain service providers. This means some businesses may no longer be required to collect and remit sales tax. Here’s a breakdown of the key details:

What changed?

The exemption threshold for retailers of services listed under KRS 139.200 (2)(g) to (ax) has increased from $6,000 to $12,000 in annual gross receipts.

Who is affected?

This change applies to businesses that exclusively sell services listed under KRS 139.200 (2)(g) to (ax).
Businesses selling tangible personal property, digital property, or services listed in KRS 139.200 (2)(a) to (f) are not eligible for this exemption.

What does this mean for businesses?

If your business only sells the specified services and has never exceeded $12,000 in annual gross receipts, you may not need to maintain an active sales tax permit.
However, once your gross receipts exceed $12,000 in a calendar year, all receipts over that amount become taxable for that year.
Furthermore, all gross receipts from sales will be subject to tax in subsequent years once the threshold has been crossed. There is no annual reset.

Important points

This change applies to tax periods beginning on or after January 1, 2025.
For 2024 and earlier periods, the $6,000 threshold remains in effect.
If you’re unsure whether your business qualifies for this exemption, it’s best to contact the Kentucky Department of Revenue for clarification.

Streamlined Sales Tax in Kentucky

The Streamlined Sales Tax (SST) agreement simplifies sales tax collection for businesses selling across state lines. Here’s what you need to know about SST and how it applies to Kentucky:

What is Streamlined Sales Tax?

The SST Agreement is an agreement between multiple states to standardize sales tax definitions and rules. This makes it easier for businesses to collect and remit sales tax in participating states.

Kentucky and Streamlined Sales Tax

Kentucky is a member of the SST Agreement. This means that if you sell to customers in Kentucky and other SST states, you can take advantage of the simplified system.

Benefits for Businesses

Simplified Registration: Register once through the national SST registration site to collect sales tax in all participating states.
Centralized Filing: File a single electronic return for all SST states where you have sales.
Free Certified Service Providers (CSPs): Remote sellers can use CSPs to manage their sales tax obligations in SST states at no cost.

Remote Seller Requirements in Kentucky

Economic Nexus: Kentucky has an economic nexus threshold for remote sellers. If you exceed this threshold, you must register to collect and remit sales tax.
Registration: You can register through the national SST registration site or directly with the Kentucky Department of Revenue.

Key Considerations

Physical Presence: If you have a physical presence in Kentucky, you must register to collect sales tax regardless of your sales volume.
Existing Sellers: If you already collect sales tax in Kentucky, continue to do so.
Threshold Calculation: Kentucky’s economic nexus threshold is based on “gross sales,” meaning all sales into the state count towards the threshold.

Certified Service Providers (CSPs)

CSPs can help businesses manage their sales tax obligations in SST states. They can assist with:

Registration
Software integration
Taxability determination
Rate calculation
Return filing
Tax remittance
Audit support

Kentucky Sales and Use Tax FAQs

How do I get a sales tax permit in Kentucky?

You can obtain a sales tax permit application (Form 10A100) online at the Kentucky Department of Revenue website or by visiting a DOR Taxpayer Service Center.

How long does it take to receive a sales tax permit?

It typically takes 2-3 weeks to process a sales tax permit application.

Can I send in a sales tax payment without a return or account?

While it’s not recommended, you can send in a payment without a return. However, it’s crucial to have a sales tax account set up to ensure proper credit.

What is the sales tax rate in Kentucky?

Kentucky has a statewide sales tax rate of 6%. There are no additional local sales taxes imposed by cities or counties.

As a Kentucky retailer, do I charge sales tax on drop shipments to out-of-state retailers for Kentucky customers?

No, you generally don’t charge sales tax in this scenario. The out-of-state retailer can provide you with a resale certificate to document the exemption.

Where can I find a sales and use tax return?

You can file electronically through Kentucky E-tax or use the paper return mailed to your business by the Department of Revenue.

Why does the Department of Revenue change my filing frequency?

The Department of Revenue reviews sales tax accounts annually and adjusts filing frequency (monthly, quarterly, etc.) based on your tax liability.

How do I claim a refund for a customer?

You can either file an amended return or submit a refund application (Form 51A209).

What is sales tax and who collects it?

Sales tax applies to tangible personal property, digital property, and certain services sold in Kentucky. Sellers are responsible for collecting and remitting sales tax.

What is the use tax rate?

The use tax rate is 6% and applies to purchases made outside of Kentucky for use within the state when sales tax wasn’t collected.

What types of receipts are subject to sales tax?

Sales tax applies to various receipts, including sales of tangible personal property, digital property, leases, rentals, admissions, transient lodging, communication services, and certain utility services.

Are all sales taxable?

No, some exemptions exist, such as sales for resale, interstate commerce, and specific exempt items.

Who is responsible for use tax on out-of-state purchases?

Generally, the consumer is responsible for use tax. However, if the out-of-state vendor is registered with Kentucky, they must collect and remit it.

Are sellers required to provide receipts showing sales tax?

Yes, sellers must provide detailed receipts showing sales tax separately from the purchase price.

Are sellers compensated for collecting sales tax?

Yes, sellers can keep a small percentage of the sales tax collected as compensation, with a cap of $50 per reporting period.

How long should I keep sales tax records?

Registered retailers must keep records for four years.

How do I close my sales and use tax account?

Complete Form 51A205 and mail or fax it to the Department of Revenue.

How do I get a copy of my sales and use tax permit?

Contact the Division of Sales and Use Tax by phone or email to request a copy of your permit.

Disclaimer: The content provided on this webpage is for informational purposes only and is not intended to be a substitute for professional advice. While we strive to ensure the accuracy and timeliness of the information presented here, the details may change over time or vary in different jurisdictions. Therefore, we do not guarantee the completeness, reliability, or absolute accuracy of this information. The information on this page should not be used as a basis for making legal, financial, or any other key decisions. We strongly advise consulting with a qualified professional or expert in the relevant field for specific advice, guidance, or services. By using this webpage, you acknowledge that the information is offered “as is” and that we are not liable for any errors, omissions, or inaccuracies in the content, nor for any actions taken based on the information provided. We shall not be held liable for any direct, indirect, incidental, consequential, or punitive damages arising out of your access to, use of, or reliance on any content on this page.

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