Kentucky's statewide sales tax is 6 percent
Kentucky charges a 6 percent sales tax on most goods and services you buy in the state. This is the base rate that applies everywhere in Kentucky. However, some cities and counties add their own local sales tax on top of the state rate, so your total tax can be higher depending on where you shop.
The 6 percent state rate has been in place since 1990 and applies to tangible goods — things you can touch and take home. It also applies to certain services, though not all services are taxed. Food you buy at a grocery store to cook at home is not taxed, but prepared food from a restaurant is.
Key Takeaways
- Kentucky's state sales tax is 6 percent on most goods and prepared food, but groceries are not taxed.
- Local cities and counties can add their own sales tax on top of the state rate, raising your total to between 6 and 7 percent depending on location.
- The tax applies to clothing, electronics, gasoline, and most other items you buy in stores or online.
- Online purchases from out-of-state sellers are subject to Kentucky sales tax if the seller has a physical presence in the state.
Local sales taxes add 0 to 1 percent in most areas
While the state rate is 6 percent, many Kentucky cities and counties have added local sales taxes that stack on top of it. These local rates vary by location and range from 0 to 1 percent, meaning your total sales tax bill can be anywhere from 6 to 7 percent depending on where you are shopping.
For example, Jefferson County (which includes Louisville) adds a local tax, as do many other populated areas. Some smaller or rural counties do not add a local tax, so you pay only the 6 percent state rate. To find out what you pay in your specific city or county, you can contact your local tax assessor's office or check the Kentucky Department of Revenue website.
What is and is not taxed in Kentucky
Kentucky taxes most items you buy in stores: clothing, shoes, electronics, furniture, gasoline, and household goods all carry the full sales tax. Prepared food — meals at restaurants, takeout, and food from a deli counter — is taxed. However, unprepared groceries you buy to cook at home are not taxed, including meat, produce, dairy, and packaged foods.
Prescription medications are not taxed in Kentucky. Over-the-counter medicines and health products are taxed. Services like haircuts, repairs, and professional labor are generally not subject to sales tax, though some specific services may be. Utilities like electricity and water are not taxed as sales tax, though they may have other fees.
Online purchases and out-of-state sellers
If you buy something online from a Kentucky seller or from an out-of-state seller that has a warehouse, office, or other physical presence in Kentucky, you owe Kentucky sales tax on that purchase. The seller is responsible for collecting and sending the tax to the state.
If you buy from a seller with no Kentucky presence, the seller does not have to collect Kentucky sales tax at checkout. However, Kentucky law says you are responsible for paying "use tax" on those purchases — it is the same rate as sales tax and covers items you bring into the state or have shipped to you. In practice, most people do not pay use tax on individual purchases, but it is technically owed.
How sales tax is calculated on your receipt
Sales tax is calculated on the subtotal of your purchase before any discounts or coupons are applied. If an item costs $50 and you have a $10 coupon, the tax is calculated on $40, not $50. The tax amount is then added to your total bill.
At the register, the cashier or point-of-sale system automatically calculates the tax based on the items purchased and the location of the store. You do not have to calculate it yourself. The tax appears as a separate line on your receipt so you can see exactly how much tax you paid.
Tax-free shopping days and exemptions
Kentucky does not have an annual tax-free shopping day like some other states do. However, certain items and groups are permanently exempt from sales tax. Disabled veterans can purchase certain items without paying sales tax if they have the proper documentation. Nonprofit organizations may be exempt from sales tax on purchases made for their operations, though they must register with the state first.
Agricultural equipment and seeds used for farming are exempt from sales tax in Kentucky. If you are buying items for resale — for example, if you own a business and are buying inventory — you can provide a resale certificate to avoid paying sales tax at the time of purchase.
Frequently Asked Questions
Do I pay sales tax on clothes in Kentucky?
Yes. Kentucky taxes all clothing and shoes at the full 6 percent state rate, plus any local tax in your area. There is no clothing exemption in Kentucky, unlike some states that exclude certain apparel items.
Is gasoline taxed in Kentucky?
Gasoline is subject to Kentucky sales tax, but it also has a separate fuel tax that is added at the pump. The sales tax is 6 percent (plus local tax), and the fuel tax is an additional per-gallon charge set by the state. Both are included in the price you see at the pump.
What is the difference between sales tax and use tax?
Sales tax is collected by the seller when you buy something. Use tax is a tax you owe on items you bring into Kentucky or have shipped to you from sellers who do not collect Kentucky sales tax. Both are the same rate, but use tax is your responsibility to report and pay, which most individuals do not do.
Do I have to pay sales tax on items I buy online from Amazon or other national retailers?
Yes. Large online retailers like Amazon have warehouses and operations in Kentucky, so they collect and send Kentucky sales tax on purchases shipped to Kentucky addresses. The tax appears in your checkout total before you complete your order.
Are groceries taxed in Kentucky?
Unprepared groceries — items you buy to cook at home — are not taxed. This includes fresh produce, meat, dairy, eggs, and most packaged foods. Prepared food from restaurants, delis, and takeout counters is taxed at the full rate.