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Kentucky Sales Tax Compliance

Kentucky Sales Tax Compliance

Kentucky sales tax compliance is fairly simple and straight-forward in comparison to other states’ tax laws. Kentucky has a state-level sales tax rate of 6%, and the state does not offer reduced rates. Due to this, businesses can expect to collect and remit a 6% sales tax rate on all taxable sales they make.

Kentucky Sales Tax

There are three filing frequencies at which taxpayers file their tax returns which will be determined by the Kentucky Department of Revenue at the time of registration. These three frequencies are monthly, quarterly, and annually. Kentucky sales tax compliance requires all taxpayers to file by the 20th of the following reporting period, no matter their filing frequency. If the return due date falls on a weekend or national holiday, then the correct due date will get pushed back to the next business day.

Furthermore, Kentucky sales tax compliance does not require any accelerated or pre-payments, so that is one less factor to be bothered with. On the other hand, Kentucky does offer vendor compensation. The discount is 1.75% of the first $1,000 of one’s tax liability. After the first $1,000, the discount percentage is lowered to 1.5% of the remaining tax liability. However, the vendor compensation is capped at $50.

Calculating the vendor compensation is probably the most difficult part of Kentucky’s sales tax compliance. Taxpayers must remember the compensation rate changes after the first $1,000, which is a small detail that can easily slip one’s mind. Luckily, when filing tax returns online, the compensation rate is calculated automatically which takes the responsibility and pressure off the taxpayer’s hands. Along with that, the state does not have local taxing jurisdictions with varied rates, so the sales tax rate will always be 6% state-wide no matter what.

If you are curious to learn more information about Kentucky sales tax compliance, make sure to visit Kentucky’s sales tax website

Post Credited To Alex Quarterman.

Have a question? Contact Aaron Giles, Giles Consulting.

Aaron C. Giles is the Founder and President of Agile Consulting Group. Aaron spent five years working within the specialty niche of Sales & Use Tax at Brown & Associates before forming his own firm in 2005. He has worked hundreds of audits in states all across the U.S. during that time and has delivered savings of over $75M in the form of refunds and credits to his clients. Today, he leads a group of talented, detail-oriented colleagues who focus exclusively on Sales & Use Tax.

Some of our firms’ greatest achievements have come in successfully arguing new and unique perspectives to existing tax law in various states enabling our clients to claim exemptions on categories of purchases previously held to be taxable. Included in these victories are: communication services taxes for religious nonprofit hospitals in FL, bulk purchases of drugs in VA, specific surgical tools and instruments for healthcare providers in TX, printing plates in GA, railroad utilities in KY, and most recently software in AL.

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