Kentucky: Sales Tax Handbook
What purchases are taxable in Kentucky?
The taxability of various transactions (like services and shipping) can vary from state to state, as do policies on subjects such as whether excise taxes or installation fees included in the purchase price are also subject sales tax. This reference is here to help answer your questions about what is and is not subject to the Kentucky sales tax.
Contents1.) Taxability of Goods and Services
- General Kentucky taxability guidelines
- Are services subject to sales tax?
- Is shipping & handling subject to sales tax?
- Are drop shipped items taxable?
Section 1: Taxability of Goods and Services
What transactions are generally subject to sales tax in Kentucky?
In the state of Kentucky, legally sales tax is required to be collected from tangible, physical products being sold to a consumer. Several exceptions to this tax are most types of farming equipment, prescription medication, and equipment used for construction.
This means that someone selling furniture would be required to charge sales tax, but an individual who sells equipment used for farming would not be required to charge sales tax.
Are services subject to sales tax in Kentucky?
The state of Kentucky does not usually collect sales taxes on the many services performed, but in 2018 passed laws broadening the base of which services can be taxed. Previously, taxed services included those which modify or repair a product.
As of 2018. labor and services such as car repair, landscaping, janitorial services, and more are subject to sales tax on the labor charges as well as the materials consumed. The full list of taxable services includes:
- Landscaping services, including but not limited to: lawn care and maintenance services; tree trimming, pruning, or removal services; landscape design and installation services; landscape care and maintenance services; and snow plowing or removal services.
- Janitorial services, including but not limited to residential and commercial cleaning services, and carpet, upholstery, and window-cleaning services.
- Small animal veterinary services, excluding veterinary services for equine, cattle, swine, sheep, goats, llamas, alpacas, flightless birds, buffalo, and hoofed animals like deer.
- Pet care services, including but not limited to grooming and boarding services, pet-sitting services, and pet obedience training services.
- Fitness and recreational sports centers.
- Golf courses and country clubs.
- Overnight trailer campgrounds.
- Bowling centers.
- Industrial laundry services, including but not limited to industrial uniform supply services, protective apparel supply services, and industrial mat and rug supply services.
- Non-coin-operated laundry and dry cleaning services.
- Linen supply services, including but not limited to table and bed linen supply services and non-industrial uniform supply services.
- Indoor skin tanning services, including but not limited to tanning booth or tanning bed services and spray-tanning services.
- Non-medical diet and weight-reducing services.
- Labor and services for certain repair, installation and maintenance of personal property, such as cars.
- Pollution-control facilities.
- Limousine services, if a driver is provided.
- Extended warranty services.
You can find a table describing the taxability of common types of services later on this page.Top
Are shipping & handling subject to sales tax in Kentucky?
In the state of Kentucky, the laws regarding tax on shipping and handling are very simple. If the item being shipped is taxable in itself, then the shipping charge is considered taxable.
If the item being shipped is not considered taxable, then the shipping charge is not taxable. If you are shipping multiples items, both taxable and nontaxable items, then you should have two shipping charges fairly divided between the taxable and nontaxable pieces of merchandise.
Are drop shipments subject to sales tax in Kentucky?
"Drop shipping" refers to the common business practice in which a vendor, often in a different state, makes a sale of a product which is shipped to the end-user by a third party supplier hired by the initial vendor. In Kentucky, drop shipments may or may not be subject to taxation depending on the circumstances.
Section 2: Taxability of Various Items in Kentucky
This table shows the taxability of various goods and services in Kentucky. If you are interested in the sales tax on vehicle sales, see the car sales tax page instead. Scroll to view the full table, and click any category for more details.
|Products on Amazon.com||TAXABLE *|
|Food and Meals|
|Grocery Food||EXEMPT *|
|Leases and Rentals|
|Motor Vehicles||EXEMPT *|
|Tangible Media Property||TAXABLE|
|Manufacturing and Machinery|
|Utilities & Fuel||EXEMPT *|
|Medical Goods and Services|
|Medical Devices||EXEMPT *|
|Newspapers and Magazines|
|General Occasional Sales||EXEMPT|
|Motor Vehicles||EXEMPT *|
|Optional Maintenance Contracts|
|General Optional Maintenance Contracts||EXEMPT *|
|Parts Purchased for Use in Performing Service Under Optional Maintenance Contracts||TAXABLE *|
|Pollution Control Equipment|
|General Pollution Control Equipment||TAXABLE *|
|Janitorial Services||TAXABLE *|
|Mechanic Work & Vehicle Repair||TAXABLE *|
|Transportation Services||EXEMPT *|
|Software and Digital Products|
|Canned Software - Delivered on Tangible Media||TAXABLE|
|Canned Software - Downloaded||TAXABLE|
|Custom Software - Delivered on Tangible Media||EXEMPT|
|Custom Software - Downloaded||EXEMPT|
|Customization of Canned Software||EXEMPT *|
|Vending Machine Sales|
* See notes in category taxability page for details
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