Kentucky's sales tax rate and what it covers
Kentucky has a state sales tax of 6 percent, which applies to most goods you buy in stores. Some counties add a local sales tax on top of that, ranging from 0.5 to 2.5 percent, so your total rate depends on where you shop. A purchase in Louisville will have a different total tax than the same purchase in Lexington or a rural county.
The state tax applies to tangible goods — things you can touch and take home. Clothing, groceries, electronics, furniture, and gasoline all get taxed. Services like haircuts, car repairs, and plumbing work are generally not subject to sales tax in Kentucky, though there are exceptions for things like telecommunications and certain utilities.
Some items are exempt from Kentucky sales tax entirely. Food bought for home consumption — milk, bread, vegetables, meat from a grocery store — is not taxed. But prepared food, restaurant meals, and food from a convenience store counter are taxed. The line between grocery and prepared can be confusing: a rotisserie chicken from a grocery store deli is usually taxed, but raw chicken from the meat counter is not.
Key Takeaways
- Kentucky's state sales tax is 6 percent, but your actual rate is higher if your county adds a local tax of 0.5 to 2.5 percent.
- Sales tax applies to goods like clothing, electronics, and gasoline, but not to services like haircuts or car repairs.
- Groceries for home cooking are not taxed, but prepared food and restaurant meals are taxed at the full rate.
- Some items like prescription medications and medical equipment are exempt from sales tax if you have a valid exemption certificate.
How local sales tax adds to the state rate
Kentucky allows counties to impose their own sales tax on top of the state 6 percent. Not all counties do, and the rates vary widely. Some counties have no local tax at all, while others charge up to 2.5 percent. This means a $100 purchase could cost you $106 in one county and $108.50 in another.
The local tax goes to the county government, not to the state. It funds schools, roads, and other county services. When you buy something, the cashier or online checkout will show you the combined rate for your location. If you shop near a county line, you might notice the tax changes depending on which side you're on.
Items that are taxed and items that are not
Most physical products are taxed: clothing, shoes, toys, books, furniture, appliances, and tools. Gasoline at the pump is taxed. Alcohol and tobacco products are taxed at the sales tax rate (plus state excise taxes on top). Cosmetics and personal care items like shampoo and deodorant are taxed.
Groceries for home use are not taxed, which includes raw meat, produce, dairy, bread, canned goods, and frozen vegetables. Prescription medications are not taxed if you present a valid prescription. Medical devices like wheelchairs, hearing aids, and diabetic supplies may be exempt if you have proper documentation. Durable medical equipment used for a chronic condition often qualifies for exemption.
Services are generally not taxed. A plumber's labor is not taxed, though any parts they install may be. A haircut is not taxed. Car repairs are not taxed, but the parts used in the repair may be. Rental of tangible goods — like renting a car or equipment — is usually taxed, but rental of real estate (apartment leases) is not.
When you do not pay sales tax
If you have a valid resale certificate, you do not pay sales tax on goods you buy to resell. Businesses use these certificates when purchasing inventory. You must register with the Kentucky Department of Revenue to get one, and you can only use it for items you will resell, not for personal use or business supplies.
Some nonprofits and government agencies are exempt from sales tax. A registered nonprofit organization can present an exemption certificate to avoid paying tax on purchases related to their mission. Schools and government offices use similar certificates. The exemption applies only to the organization itself, not to individuals who work there.
If you buy something out of state and have it shipped to Kentucky, you may owe Kentucky sales tax on delivery, depending on the seller's location and whether they have a physical presence in Kentucky. This is called use tax, and it applies to items you use in Kentucky even if you bought them elsewhere. Most online retailers now collect Kentucky sales tax at checkout.
How to find your county's sales tax rate
The Kentucky Department of Revenue maintains a list of all county and local sales tax rates on its website. You can search by county name or ZIP code to find your exact combined rate. The rates do not change often, but they can be updated when a county votes to adjust its local tax.
If you live near a county line or shop in multiple counties, you may encounter different rates. Some people deliberately shop in lower-tax counties, though the savings are usually small on everyday purchases. Online retailers will explore the tax rate for your shipping address, not the rate where the company is located.
Sales tax on online and mail orders
Most large online retailers — Amazon, Walmart, Target, and others — now collect Kentucky sales tax at checkout and send it to the state. The tax is calculated based on your shipping address. If you order from a small seller or out-of-state company that does not collect tax, you technically owe Kentucky use tax on that purchase, though it is rarely enforced for individual consumers.
Mail-order purchases follow the same rule: if the seller has a physical location in Kentucky or meets certain sales thresholds, they must collect tax. If they do not, the tax obligation falls on you as the buyer. In practice, most people do not report these purchases on their tax return, and the state focuses enforcement on businesses rather than individuals.
Special situations and exemptions
Certain industries and purchases have special rules. Manufacturing equipment used directly in production may be exempt or taxed at a lower rate. Agricultural equipment and supplies for farming operations often may have access to for exemption. Energy used in manufacturing can be exempt. These exemptions require documentation and registration with the Department of Revenue.
If you are a Kentucky resident buying items for use outside the state, you still pay Kentucky sales tax at the point of purchase. The tax is based on where you buy it, not where you use it. If you move to another state and buy something in Kentucky before you leave, you pay Kentucky tax.
Frequently Asked Questions
Does Kentucky tax groceries?
No. Food you buy at a grocery store for cooking at home is not taxed. This includes meat, produce, dairy, bread, and canned goods. However, prepared food like rotisserie chicken, deli sandwiches, and restaurant meals are taxed at the full rate.
What is the difference between sales tax and use tax?
Sales tax is collected when you buy something in Kentucky. Use tax is a tax on items you buy outside Kentucky but use inside it. If you buy something online from a seller who does not collect Kentucky tax, you owe use tax on that purchase, though enforcement is rare for individual consumers.
Can I get a refund of sales tax I already paid?
Generally, no. Sales tax is final at the point of purchase. If you return an item and get a refund, the sales tax is refunded as part of that refund. If you paid tax on something you later found out was exempt, you would need to contact the seller or the Department of Revenue to dispute it.
Do I pay sales tax on used items?
Yes, if you buy a used item from a retailer or dealer, sales tax applies. If you buy a used item from a private individual in a casual sale, no sales tax is collected. The difference is whether the seller is in the business of selling that type of item.
What county sales tax rates are highest in Kentucky?
Several counties have local sales tax rates at or near the maximum. The exact rates change, so check the Kentucky Department of Revenue website for current rates in your area. Some counties have no local tax at all, while others add the full 2.5 percent to the state rate.