If your limited liability company (LLC) sells physical products or certain types of services, you will need to collect and pay sales tax. In Kentucky, the first step is visiting the Department of Revenue website and registering for sales tax in order to acquire a seller’s permit, or sales tax permit.
What Products and Services Are Subject to Sales Tax in Kentucky?
Sales of both tangible and digital property are subject to sales tax in Kentucky. Labor for repair and installation of taxable tangible personal property is also subject to sales tax, as are communications services. Sales of any prepared food, including prepared food sold in grocery stores, is subject to sales tax. Other groceries are tax-exempt.
Kentucky Sales Tax Rate
The sales tax rate in Kentucky is 6%.
Five states have no sales tax. Colorado has the lowest sales tax at 2.9%, while California has the highest rate at 7.25%.
How to Register for Kentucky Sales Tax
In Kentucky, acquire a seller’s permit by following the revenue department’s detailed instructions for registration:
- Go to the Kentucky business one stop portal.
- Register for an account.
- Fill out the business tax registration form.
- There is no fee to register for business taxes.
Use our Sales Tax Calculator to calculate taxes and total purchase amount.
In Kentucky, and across the country, collecting sales tax is a must if you want to avoid potentially heavy fines and even closure. It’s crucial that you follow your state’s laws, and you might consider consulting with an accountant or tax attorney to make sure you’re in full compliance.