The Kentucky sales tax rate is a flat 6%, and it is the only sales tax you pay anywhere in the Commonwealth. No city or county adds its own percentage on top, so the price you see at a register in Louisville carries the same tax as one in Paducah or Pikeville.1Kentucky Department of Revenue. Sales and Use Tax The Kentucky Department of Revenue administers the tax, sets filing schedules, and enforces compliance.
What the 6% Applies To
KRS 139.200 puts the 6% tax on three things: tangible personal property, digital property, and a specific list of services.2Kentucky Legislative Research Commission. Kentucky Revised Statutes 139.200 – Rate of Sales Tax
Tangible personal property is the straightforward bucket: clothing, electronics, furniture, vehicles, and other physical goods. Digital property covers anything delivered electronically, including downloaded software, e-books, streamed music, and digital video. Whether you own a digital file outright or just stream it, the 6% applies the same way.
Services are different. Kentucky taxes a defined list, not services generally, which is where most of the confusion sits.
Taxable Services
If a business provides one of these services, it collects 6% from the customer:2Kentucky Legislative Research Commission. Kentucky Revised Statutes 139.200 – Rate of Sales Tax
- Landscaping: lawn care, tree trimming and removal, landscape design, and snow plowing
- Janitorial: residential and commercial cleaning, carpet cleaning, and window washing
- Small animal veterinary care, meaning services for household pets but not horses, cattle, poultry, swine, sheep, goats, llamas, alpacas, or buffalo
- Pet grooming, boarding, pet sitting, and obedience training
- Industrial laundry, non-coin-operated laundry and dry cleaning, and linen supply
- Gym memberships, recreational sports center memberships, and personal fitness training
- Hotels, motels, campsites, and short-term rentals for stays under 30 continuous days
- Intrastate, interstate, and international phone and data services, plus prepaid calling and wireless
- Sewer services, admissions (with limited exceptions for horse racing and some nonprofit events), and indoor tanning
The small-animal line catches people. Boarding a horse or getting veterinary care for cattle carries no sales tax. Take a dog to the groomer and 6% is added to the bill.
What’s Exempt
Several categories are carved out of the 6%. The ones most people encounter are medical items, farm inputs, and residential utilities.
Prescription Drugs and Medical Devices
Prescription medications are exempt whether filled at a pharmacy, administered by a physician, or distributed as free samples from a doctor’s office.3Kentucky Legislative Research Commission. Kentucky Revised Statutes 139.472 – Exemption for Certain Medical Items Prosthetic devices designed for a specific individual or prescribed by an authorized provider are also exempt. Over-the-counter medications without a prescription do not qualify.
Farm Machinery and Supplies
Machinery used exclusively and directly in tilling soil, raising livestock or poultry for sale, or producing milk for sale is exempt, including attachments, repair parts, and replacement parts.4Kentucky Legislative Research Commission. Kentucky Revised Statutes 139.480 – Property Exempt The exemption also covers seeds, fertilizer, insecticides, livestock feed, breeding livestock and poultry, and on-farm facilities for grain storage or raising poultry and livestock. Automobiles and standard trucks are not exempt, even when used on the farm.
Residential Utilities
Utility services used at a customer’s primary residence are exempt. Since January 1, 2023, the residential exemption applies only to services used at the customer’s place of domicile, so a vacation home or second property does not qualify. Natural gas classified as residential use is also specifically excluded from the tax on distribution and transmission services.
Use Tax on Out-of-State Purchases
The 6% use tax is the mirror of the sales tax. If you buy something from an out-of-state retailer that does not collect Kentucky sales tax, you owe the same 6% directly to the state.5Kentucky Department of Revenue. Consumer Use Tax It applies to tangible personal property and digital property brought into Kentucky for storage, use, or consumption.
For individuals, the simplest way to pay is on your Kentucky state income tax return, which has a line specifically for consumer use tax.5Kentucky Department of Revenue. Consumer Use Tax Businesses track untaxed purchases and report them on their regular sales and use tax returns. If you paid sales tax to another state at a rate below 6%, you owe Kentucky the difference.
Most online shoppers see the tax collected automatically at checkout. Out-of-state retailers and marketplaces such as Amazon or Etsy are required to collect Kentucky’s 6% once they exceed $100,000 in Kentucky sales or 200 separate Kentucky transactions in the previous or current calendar year.6Kentucky Department of Revenue. Kentucky Sales and Use Tax Collections by Remote Retailers
Collecting and Filing the Tax as a Business
Any business making taxable sales in Kentucky must register with the Department of Revenue before its first sale. Registration is handled online through MyTaxes.ky.gov or on paper Form 10A100.7Kentucky Department of Revenue. Business Registration You’ll need your legal business name, Federal Employer Identification Number, ownership structure, and the date you plan to start making taxable sales.8Kentucky Department of Revenue. Kentucky Tax Registration Application – Form 10A100 Many Kentucky cities and counties also require a local business license or occupational tax, so check with the local government where you’ll operate.
Once registered, the Department assigns a filing frequency (monthly, quarterly, or annual) based on sales volume. Monthly filers must submit returns by the 20th of the month following the reporting period, filed electronically through the Department’s online system.1Kentucky Department of Revenue. Sales and Use Tax Payment is by ACH debit or credit card, with the usual processing fees on cards.
Operating as a seller without a valid permit is a Class B misdemeanor, so register before the first taxable sale.9Kentucky Legislative Research Commission. Kentucky Revised Statutes 139.990 – Penalties
Penalties and Interest
Late returns and late payments add up fast. The Department assesses 2% of the tax due for every 30 days (or fraction of 30 days) the return is overdue, capped at 20%, with a $10 minimum.10Kentucky Department of Revenue. Penalties, Interest and Fees Failure to pay or collect the tax when required carries the same 2%-per-30-days structure, same 20% cap, same $10 floor.
Unpaid balances also accrue interest. The tax interest rate is 9% as of January 1, 2026.11Kentucky Department of Revenue. Tax Interest Rate Update for 01-01-26 That rate is reset each year under KRS 131.183 using the adjusted prime rate plus two percentage points, so it can move from one year to the next.
A business that collects the 6% from customers and then fails to send it to the state faces more than financial penalties. Violating the collection and remittance requirements of KRS 139.220 or KRS 139.380 is a Class B misdemeanor.9Kentucky Legislative Research Commission. Kentucky Revised Statutes 139.990 – Penalties