Sales tax-free products and services:
Who is obliged to register sales tax:
When you sell in Kentucky and have “sufficient activity” in Kentucky, you need to be registered to collect and pay sales tax in Kentucky. Kentucky requires that any merchant with a sales tax permit file a sales tax return on their due date even if they don’t have any sales tax to report or pay.
Starting October 1, 2019, July 1, 2018, requires remote retailers with 200 or more sales into the state or $100,000 or more in gross receipts from sales into the state to register and collect Kentucky sales tax.
The special rules are applicable for the SAAS business.
If all of your sales in Kentucky are through a marketplace platform, you can not register for paying Kentucky sales tax. Your marketplace facilitator pays the sales tax itself.
If you are selling through your own marketplace, then you will need to register for paying sales tax if you meet the $100,000 threshold.
You can be registered online on the Kentucky Department of Revenue website.
Sales tax payment and filing date:
Depending on your tax liability, determine your filing frequency – either annual, monthly, or quarterly:
Annual – $0 to $125.00
Quarterly – $125.01 to $1,199.99
Monthly – $1,200.00 to $9,999.99
Monthly with Prepayment – $10,000 and up
Returns are always due on the 20th day of the month following the reporting period. If the filing due date falls on a weekend or holiday, tax is due the next day.
Penalty and interest:
- Late Filing – 2 % of the total tax due for each 30 days or cut. (maximum 20%)
- Late Payment and Failure – 2 % of the total tax due for each 30 days or cut. (maximum 20%)/(minimum $10).
You may keep 1.75 % of the first $1,000 and 1 % of the tax due in excess of $1,000 on each return up to a maximum of $1,500 for reporting and remitting the taxes on or before the due date if you have not filed or if you paid late.