State Sales Tax Nexus and General Overview

Need to Understand a State's Sales Tax Situation? Here it is...

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Kentucky (KY)

KY Sales Tax - Name of Tax and General Application:

Kentucky imposes a tax on sales of tangible personal property and selected services in the state. This tax is called a "sales tax". Additionally, there is a tax imposed on tangible personal property used in the state where sales tax has not been paid. This tax is called a "use tax".

KY Nexus - General Requirements:

The word "nexus" means a link or connection. If you are determined to have nexus to a U.S. state then you are subject to that state's sales and use tax rules and must collect and remit sales tax to the state. This is known as a "filing obligation."

Each state has a different definition of nexus. However, if the answer to any of the following questions is yes, it is likely that a company has nexus as legally defined in most U.S. States.

Does the company own property in the state? Does the company have employees living in the state? Does the company regularly send employees in the state to perform services? Does the company have an agent acting on behalf of the company in the state?

Out-of-state retailers "engaged in business" in Kentucky are required to collect use tax on sales of tangible personal property for storage, use or consumption. To be considered engaged in business, a retailer must have an office or other place of business in the state, an agent operating in the state, continuous solicitation of sales by financial, telecommunication or advertising systems, or lease of tangible personal property within the state.

KY Local Tax - Do Localities Impose Tax?

No, Kentucky does not impose local sales tax.

KY Resale Certificate Renewal Agreements:

The seller receives a resale certificate from the purchaser when the goods are being bought for resale. Tangible personal property bought with a resale certificate must be resold or taxes paid in full on the sale.

KY Resale Certificate Renewal Periods

There is no mention of renewal periods or expiration of resale certificates.

KY Statute of Limitations

Later of four years from the date the return was due or the date the return was filed.