City of Louisville Sales Tax: Exemptions, Filing, and Permits

The Louisville sales tax is simply Kentucky’s statewide 6 percent rate. The city of Louisville and Jefferson County do not add anything on top, and Kentucky prohibits local sales taxes altogether, so a $100 purchase rings up at $106 whether you buy it downtown, in the Highlands, or at a suburban strip mall.1Department of Revenue. Sales and Use Tax

The rate applies to the gross receipts from retail sales of tangible personal property, digital property, and a growing list of services.2Kentucky Legislative Research Commission. Kentucky Revised Statute 139.200 – Sales Tax Tangible personal property covers the physical goods you’d expect: furniture, electronics, clothing, appliances, motor vehicles. Digital property pulls in downloads, e-books, streaming subscriptions, and software.

Services That Now Carry Sales Tax

Kentucky expanded its sales tax base starting in 2023, and the new list is where most Louisville residents get caught off guard. If you hire someone for any of the following, expect 6 percent on the invoice:2Kentucky Legislative Research Commission. Kentucky Revised Statute 139.200 – Sales Tax

  • Landscaping and lawn care, including mowing, tree trimming, landscape design and installation, and snow removal
  • Residential and commercial cleaning, carpet cleaning, and window washing
  • Pet grooming, boarding, pet sitting, and obedience training
  • Small animal veterinary services (livestock and equine vet work is excluded)
  • Non-coin-operated laundry, dry cleaning, industrial uniform supply, and linen services
  • Photography and photo finishing
  • Website design, development, and hosting
  • Indoor tanning
  • Non-medical diet and weight-loss programs
  • Extended warranties
  • Telemarketing and lobbying
  • Executive recruitment

Longer-standing taxable services are still on the books: short-term lodging (hotel and motel stays under 30 consecutive days), admissions to events, and telecommunications.2Kentucky Legislative Research Commission. Kentucky Revised Statute 139.200 – Sales Tax

What’s Exempt

Groceries, With Carve-Outs

Food and food ingredients bought for home consumption are exempt. Raw meat, produce, dairy, bread, canned goods, and frozen meals ring up tax-free. The exemption does not, however, cover candy, soft drinks, dietary supplements, prepared food, alcohol, or tobacco, all of which are taxed at the full 6 percent.3Kentucky Legislative Research Commission. Kentucky Code 139.485 – Exemption of Food Items – Definitions Kentucky defines “soft drinks” broadly to include sweetened nonalcoholic beverages that aren’t primarily juice or milk based, which sweeps in sports drinks and many flavored waters.

Prescription Drugs and Medical Equipment

Prescription medications, insulin, diabetic supplies, medical oxygen and delivery equipment, prosthetic devices, mobility-enhancing equipment, and durable medical equipment like hospital beds are exempt when purchased with a prescription or for individual use as the statute requires.4Kentucky Legislative Research Commission. Kentucky Revised Statute 139.472 – Exemption for Certain Medical Items Over-the-counter drugs are taxable unless a doctor writes a prescription for them.

Residential Utilities

Water, sewer, and fuel used for heating, cooking, lighting, and other household purposes at your primary residence are exempt.5Justia Law. Kentucky Revised Statutes 139.470 – Exempt Transactions Since 2023, the exemption applies only to the utility account at your actual place of residence. Utilities at a rental property or a second home don’t qualify.

Resale Purchases

Businesses buying inventory for resale can skip paying sales tax at the register by giving the seller a completed Resale Certificate (Form 51A105). The buyer must hold a valid Kentucky Sales and Use Tax Permit, and the goods or services must actually be resold in the regular course of business.6Department of Revenue. Resale Certificate Misusing a resale certificate to buy items you keep for business or personal use is a Class B misdemeanor on top of the unpaid tax.7Kentucky Legislative Research Commission. Kentucky Revised Statute 139.990 – Criminal Penalties

Online and Out-of-State Purchases

When an out-of-state seller doesn’t collect Kentucky sales tax, the buyer owes use tax at the same 6 percent rate.1Department of Revenue. Sales and Use Tax Individuals report it on a Consumer’s Use Tax Return (Form 51A113).

In practice, this matters less than it used to. Marketplace platforms like Amazon, eBay, and Etsy are required to collect Kentucky sales tax once they cross either $100,000 in gross receipts or 200 separate transactions sourced to the state in the current or previous calendar year.8Department of Revenue. Kentucky Sales and Use Tax Collections by Remote Retailers Virtually every major online purchase shipped to a Louisville address already includes the 6 percent at checkout. Use tax still applies to private purchases and small out-of-state vendors that don’t collect.

If You Sell in Louisville: Permits, Filing, and Penalties

Any business making retail sales needs a Kentucky Sales and Use Tax Permit before collecting tax. Registration is free through the MyTaxes portal or by paper on the Kentucky Tax Registration Application (Form 10A100).9Department of Revenue. Business Registration The application asks for the business’s legal name, physical address, the Social Security Numbers or Federal Employer Identification Numbers of all responsible parties, and a NAICS code.10Department of Revenue. Kentucky Tax Registration Application and Instructions Operating without a permit is a Class B misdemeanor.7Kentucky Legislative Research Commission. Kentucky Revised Statute 139.990 – Criminal Penalties

Returns are filed through MyTaxes.11Department of Revenue. MyTaxes Most businesses file monthly, with lower-volume sellers eligible for less frequent filing at the Department of Revenue’s discretion. Returns are due on the 20th of the month following the reporting period.

Timely filers get a small vendor discount: 1.75 percent of the first $1,000 in tax collected and 1.5 percent on the remainder, capped at $50 per month. Miss a deadline and the penalty is 2 percent of the tax due for each 30-day period (or fraction of one) that the return or payment is late, up to a maximum of 20 percent, with a $10 minimum.12Department of Revenue. Penalties, Interest and Fees Interest accrues separately. Two months late already means 4 percent plus interest.

The Louisville Occupational Tax Is a Different Tax

Louisville Metro does levy its own local tax, but it isn’t a sales tax and it never appears on a store receipt. It’s an occupational license tax on wages and net business profits. Employers withhold 1.25 percent of wages earned in Louisville Metro plus a 0.20 percent transit tax, for a combined 1.45 percent, and self-employed individuals pay the same rates on net profits from activity in Louisville.13American Legal Publishing. Louisville Metro Code 110.02 – Levy of Occupational License Tax That revenue goes to Louisville Metro Government. The 6 percent on your purchases goes to the state.