Kentucky: Sales Tax Handbook
How to file your sales taxes in Kentucky
Once your business has a Kentucky sales tax license and begins to make sales, you are required to start collecting sales taxes on behalf of the Kentucky government and filing regular sales tax returns. This page will help you understand the basics of your tax collection and filing responsibilities.
How To Collect Sales Tax In Kentucky
Collecting sales tax in the state of Kentucky is fairly simple. Kentucky has no local sales tax rates, just the one state-wide sales tax. This means that wherever your business is located, within the state of Kentucky or in any other state(although you must have some kind of physical presence within the state),you charge Kentucky's statewide tax of 6%.
This means that regardless of the location of the customer, 6% is charged.
Sales Tax Collection Discounts In Kentucky
Kentucky allows merchants to keep a small percentage of the sales tax they collect as a collection discount, which serves as compensation for the work required to comply with the Kentucky sales tax regulations
The collection discount is 1.75% of the first one thousand dollars of due tax and 1% of amounts greater than one thousand dollars, with a maximum fifty dollars per reporting period.
Your Kentucky Sales Tax Filing Requirements
To file sales tax in Kentucky, you must begin by reporting gross sales for the reporting period, and calculate the total amount of sales tax due from this period.
In the state of Kentucky, all taxpayers have two options for filing their taxes.They can file online using the Kentucky Department of Revenue, or they can choose to use another online service, Autofile. Both of these online systems allow the user to remit payment online.
Tax payers in Kentucky should be aware of several late penalties the state applies. The penalty for late filing is 2% for each thirty days or fraction thereof that the filing is late. The maximum penalty is 20%, and if the return is filed late after a jeopardy assessment has been issued to the offender, pursuant to KRS 131.150, the minimum penalty becomes one hundred dollars; as the minimum payment is usually ten dollars. Late payments result in a penalty of 2% of the tax due for each thirty days for fraction thereof where the return is late. The maximum percentage is 20%, and the minimum penalty is ten dollars.
The state of Kentucky requires that a seller who owns a sales tax permit files sales tax return on the required day, so long as the tax return would have been "zeroed-out", and there is nothing to report.
Your Kentucky Sales Tax Filing Frequency & Due Dates
Your business's sales tax return must be filed by the 20th of the month following reporting period. For a list of this year's actual due dates, see our calendar of Kentucky sales tax filing due dates.
If the average monthly tax liability is greater than ten thousand dollars, then the due date is the twenty fifth day of the current month for the period begining from the sixteenth of preceding month, and extends through the fifteenth of current month
Where To File Your Kentucky Sales Tax Return:
Filing Your Kentucky Sales Tax Returns Online
Kentucky supports electronic filing of sales tax returns, which is often much faster than filing via mail.Kentucky does not allow consumer use tax returns to be filed electronically.
Kentucky allows businesses to make sales tax payments electronically via the internet.Taxpayers are required to make payments electronically if any of the following requirements are met: if the average payment for each reporting period is a minimum of ten thousand dollars; if a payment is made on behalf of greater than one hundred taxpayers; a collection of funds that were remitted on behalf of other individuals is a minimum of ten thousand dollars for each tax amount being remitted; or finally if the average payment of sales tax for each reporting period during twelve month period which ends on the thirtieth of September of the year immediately prior to the current calendar year is greater than twenty five thousand dollars.
You can process your required sales tax filings and payments online using the official KY E-Tax website, which can be found here . You should have received credentials to access your KY E-Tax account when you applied for your Kentucky sales tax license.
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