Kentucky Sales Tax on Services, Installation, etc Kentucky: Sales Tax Handbook

Kentucky:

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.

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.

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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.

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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.

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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.

Category Exemption Status
Amazon Purchases
Products on Amazon.com TAXABLE *
Clothing
General Clothing TAXABLE
Food and Meals
Catering TAXABLE *
Grocery Food EXEMPT *
Leases and Rentals
Motor Vehicles EXEMPT *
Tangible Media Property TAXABLE
Manufacturing and Machinery
Machinery TAXABLE *
Raw Materials EXEMPT
Utilities & Fuel EXEMPT *
Medical Goods and Services
Medical Devices EXEMPT *
Medical Services EXEMPT
Medicines TAXABLE *
Newspapers and Magazines
Newspapers TAXABLE
Periodicals TAXABLE
Occasional Sales
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 *
Services
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 *
Digital Products TAXABLE
Trade-Ins
General Trade-Ins EXEMPT
Vending Machine Sales
Food TAXABLE *
Merchandise TAXABLE *

* See notes in category taxability page for details



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** This Document Provided By SalesTaxHandbook **
Source: http://www.salestaxhandbook.com/kentucky/sales-tax-taxability