Sales Tax and Reverse Sales Tax Calculator Kentucky

KENTUCKY [Multidirectional Calculator]
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  • 6%
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  • Amount Before Tax ${{amountBeforeTax}}
  • Sales Tax Rate {{SalesTaxRate}}%
  • Amount Of Taxes ${{AmountOfTaxes}}
  • Amount After Taxes ${{AmountAfterTaxes}}



Kentucky - KY Sales Tax Calculator: User Guide

Kentucky is a state located in the southern region of the United States, with an official name of Commonwealth of Kentucky. The state is famous for Kentucky Fried Chicken, mutton BBQ, diehard college basketball fans, a flourishing economy, and a favorable business environment for entrepreneurs and business persons, consequently attracting numerous people to settle throughout the year.

So if you are mulling over to start, relocate, or expand your business in Kentucky, it is vital to educate yourself with all the essentials for Kentucky Sales Tax.

To assist you in this, our experts have worked days and nights to bring a handy Kentucky Sales Tax guide along with a Kentucky Sales Tax calculator. So let's explore!


Kentucky Sales Tax Facts:

  • The State sales tax rate charged in Kentucky is 6%. Fortunately, no city or county in the state levy additional local sales tax.
  • The standard type of sales tax charged in Kentucky depending on the type of purchases includes Consumers use tax, rental tax, sales tax, sellers use, and lodgings tax.
  • Unlike most of the other states, Kentucky also charges sales tax on most of the services like admissions (to movies, themes parks, etc.), accommodations (with a duration of fewer than 30 days), prepaid calling services, landscaping, fitness, and recreational sports, extended warranties, sewage and natural gas utilities, janitorial services, bowling, laundry, and numerous pet care veterinary services.
  • Prescription drugs, prosthetic devices, raw groceries, and unprocessed foods are exempted from Kentucky Sales Tax.
  • The sales tax rate in Kentucky is higher than 71.2% of US states.
  • Items purchased for resale, improvement, or as raw materials by the individuals and businesses can claim KY sales tax exemption by filing the Kentucky Sales Tax Exemption Form.
  • Buyers who are not charged with KY Sales tax by retailers while online and out-of-state purchases are required to pay Kentucky Use Tax.
  • Unfortunately, Kentucky doesn't have any ongoing sales tax holidays.

How to calculate Sales Tax in Kentucky?

Businesses and Sellers involved in retail sales of tangible personal property, digital property, and sales of certain services and have Nexus in Kentucky are required to register for Kentucky Sales tax. They are required to collect, manage, and remit it to the Kentucky Department of Revenue while staying in compliance with state laws and avoid penalties and interest.

The sales tax determined on four factors:

  1. Nexus: It is a connection of business with a state. The business is only liable to pay taxes to the states with Nexus.
  2. Out of State Seller's Eligibility: Out of State Seller is only required to register, collect, and remit the sales tax to the authorities in the state if it falls under the criteria provided by the state.
  3. Location and Products or Services: The sales tax rate varies from product to product and location to location, so you must check the sales tax rate applicable to your product according to the product category, county, and city. However, as the sales tax rate is the same across Kentucky, 6% of sales tax will be applied, regardless of zip code.
  4. Exemptions: Almost all goods are eligible for sales tax regulation under Kentucky Law except prescription drugs, prosthetic devices as well as raw groceries and unprocessed foods. Moreover, you can check with the Kentucky Department of Revenue website for updated list goods and services sold in Kentucky, subject to sales tax.

To calculate Sales Tax in Kentucky, follow the steps below:

Step 1 – Determine your Nexus:

As a business owner, you are only required to collect sales tax if you are eligible for collecting sales tax and have Sales Tax Nexus in the Kentucky State. And to determine your Nexus in Kentucky, you must have any of the following:

  • Maintaining a physical location in Kentucky, such as office, warehouse, or distribution house.
  • An employee or independent contractor present in Kentucky.
  • Services completed or provided in the state.
  • Maintaining good in a warehouse in Kentucky.
  • Computer software used by a third party in the state.
  • Participating in craft or trade shows and festivals in Kentucky for over 14 days in a year.

Step 2 – Determine the Sales Tax Rate:

The next step is to deduce the Sales Tax rate (State + County + City) applicable to your product once you have determined that your Nexus is with Kentucky. However, no city or county in KY levy additional local sales tax, so a statewide rate of 6% of sales tax would be applied all across the state.


Step 3 – Calculate Sales Tax:

After determining the sales tax rate according to the location and type of purchases, it is easy to calculate the sales tax amount charged on the product and gross price (amount after tax) of a product.


Example # 1:

For instance, you sell a Ceiling Fan on your store in Erlanger, Kentucky, having a net cost of $62. The amount of Sales Tax that you have to pay on the Ceiling Fan would be:


Manual Method:

Net Price (amount before Tax) of a Ceiling Fan: $62

Total Sales Tax rate: 0.00% (Erlanger) + 0.00% (Kenton County) + 6.00% (Kentucky State) = 6.00%


Total Sales Tax amount = $62 x 6% = $3.72

Gross Price (Amount after Tax) = 62 + 3.72 = $65.7


So the Sales Tax amount charged on the Ceiling Fan would be $3.72, raising the gross cost of it to $65.7.


Using our Sales Tax Calculator:

All of the steps mentioned above can be skipped to get an instant result using our Sales Tax Calculator. All you need is:

  1. Input the $7 Net Price of a Ceiling Fan as Amount Before Tax
  2. Input or select 6% of the combined Sales Tax rate on the Tax Rate

Our calculator will automatically calculate the result, and represents it in 3 different forms, as shown in the image below:

kentucky-sales-tax-calculator

Reverse Sales Tax Calculation

In the example above, we have explained to you to calculate the Sales Tax amount payable in a product, and the Gross Price of the Product.

But there are also instances when you are required to deduce how much Sales tax you have actually paid on a product in Kentucky.

This is where the Reverse Sales Tax Calculation Kicks in. And luckily, our Kentucky Sales Tax Calculator can perform this calculation like a Pro.


Example:

The gross cost (amount after tax) of a Ceiling Light is $17, which you sell on your store in Newport, Kentucky. Now, if you want to deduce the amount of sales tax you have actually paid on it and the net cost (amount before tax) of a Ceiling Light, you can follow the steps below:

Gross Price (Amount after Tax) of Ceiling Light: $17

Total Sales Tax rate: 0.00% (Newport) + 0.00% (Campbell County) + 6.00% (Kentucky State) = 6.00%


Manual Method:

Gross Price with sales tax = [Net Price × (tax rate in decimal form + 1)]

17 = [Net Price x ((6/100) + 1)]

17 = Net Price x 1.06

$16 = Net Price


So the original Price (net price) of the Ceiling Light would be $16.


Using our Sales Tax Calculator:

You can also use our Sales Tax Calculator for Reverse Sales Tax calculation to skip the aforementioned manual method. All you need is:

  1. Input the $17 Gross Price of Ceiling Light as Amount after Tax
  2. Input or select 6.00% of combined Sales Tax Rate on the Tax Rate

Our calculator will automatically calculate the result and represents it in 3 different forms.

Also Check: Kentucky Paycheck Calculator to Calculate your Paycheck in Kentucky State including all taxes and take home pay.

FAQs

Answer: The State sales tax rate charged in Kentucky is 6%.

Answer: Prescription drugs, prosthetic devices as well as raw groceries and unprocessed foods are exempted from Kentucky Sales Tax.

Answer: Services that are charged with sales tax in Kentucky – KY includes admissions (to movies, themes parks, etc.), accommodations (with a duration of fewer than 30 days), prepaid calling services, landscaping, fitness and recreational sports, extended warranties, sewage and natural gas utilities, janitorial services, bowling, laundry, and numerous pet care veterinary services.

Answer: No, raw groceries and unprocessed foods are exempted from sales tax. However, prepared food, alcoholic beverages, candy, tobacco, dietary supplements, soft drinks, and food sold via vending machines, are taxed.

Answer: Yes, buyers who are not charged with Kentucky Sales tax by retailers while online and out-of-state purchases are required to pay Kentucky Use Tax at the rate of 6%.

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