Kentucky's sales tax rate and what it covers

Kentucky has a 6% state sales tax that applies to most goods you buy in stores. Some counties add a local sales tax on top of that — ranging from 0% to 2.5% depending on where you live — so your total rate could be anywhere from 6% to 8.5%. The tax is calculated at the register and added to your bill.

Not everything is taxed the same way in Kentucky. Groceries and prescription medications are not subject to sales tax. Prepared food — like restaurant meals, deli items, and hot food from a store — is taxed. Unprepared food you cook at home, like raw chicken or vegetables, is not.

Services are generally not taxed in Kentucky, with a few exceptions. Haircuts, car repairs, and plumbing work are not subject to sales tax. But if you buy a haircut and a bottle of shampoo in the same transaction, only the shampoo is taxed.

Key Takeaways

  • Kentucky's base sales tax is 6%, but your actual rate depends on your county's local tax, which can add 0% to 2.5%.
  • Groceries and prescription drugs are not taxed; prepared food and over-the-counter medicines are.
  • Services like haircuts and repairs are not taxed, but items you buy are.
  • Online purchases from out-of-state sellers are supposed to be taxed, but enforcement depends on the seller's size and location.

Local sales tax rates by county

Kentucky's 120 counties do not all charge the same local sales tax. Some counties have no local tax at all, while others charge up to 2.5%. This means a $100 purchase could cost you $106 in one county and $108.50 in another.

The local tax rate depends on decisions made by your county or city government, not the state. If you live near a county line, it is worth knowing which side you are on — a trip across the border can change what you pay. The Kentucky Department of Revenue publishes a full list of local rates by county on its website, organized by jurisdiction.

How sales tax is collected and who pays it

The store or business collects the sales tax from you at the point of sale. They then send that money to the Kentucky Department of Revenue on a regular schedule — usually monthly or quarterly, depending on how much tax they collect. You do not file anything yourself for sales tax; it is handled between the business and the state.

If a business fails to collect or send in the tax, the state can pursue the business, not you. Your receipt shows the tax amount, which serves as proof of what was charged. Keep receipts if you need to return items, since the tax is refunded along with the purchase price.

Sales tax on online and mail orders

Kentucky law says you owe sales tax on items ordered online or by mail, even if the seller did not collect it. However, enforcement is inconsistent. Large retailers like Amazon and Walmart collect Kentucky sales tax on most orders. Smaller sellers or out-of-state businesses may not.

If you buy from a seller who did not collect tax, you are technically supposed to report and pay the tax yourself on your state income tax return — this is called "use tax." In practice, very few individuals do this, and the state does not actively pursue individual buyers. The focus is on collecting from businesses.

What happens if sales tax is charged incorrectly

If you notice you were charged the wrong tax amount on a receipt, you can ask the store for a refund or correction on the spot. Most stores will fix it immediately. If the error is large or the store refuses, you can contact the Kentucky Department of Revenue with your receipt and details.

If you were overcharged on a major purchase — like a car or appliance — and the store will not refund the difference, keep your receipt and contact information for the store. The Department of Revenue can investigate if there is a pattern of incorrect charging, though individual refunds are usually handled between you and the business.

Sales tax on specific items

Some items fall into gray areas. Clothing is taxed in Kentucky, including shoes and accessories. Diapers and feminine hygiene products are taxed. Gasoline is taxed at the pump as part of the fuel excise tax, separate from sales tax.

Digital goods — like e-books, music downloads, and streaming subscriptions — are taxed in Kentucky. Software and apps are also taxed. If you are unsure whether a specific item is taxed, your receipt will show it, or you can ask the cashier before you buy.

Frequently Asked Questions

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 buy from out-of-state sellers who did not collect Kentucky sales tax. You are supposed to report use tax on your state income tax return, but enforcement on individual purchases is rare.

Do I pay sales tax on groceries?

No. Unprepared groceries — raw meat, vegetables, bread, milk, canned goods — are not taxed. Prepared food like rotisserie chicken, deli sandwiches, and hot pizza are taxed. Alcohol and tobacco are taxed separately and at higher rates.

Is sales tax the same everywhere in Kentucky?

No. The state rate is 6%, but counties add local tax ranging from 0% to 2.5%. Your total rate depends on your county. You can find your county's rate on the Kentucky Department of Revenue website or ask a local business.

Do I have to pay sales tax on services?

Most services are not taxed in Kentucky — haircuts, repairs, and professional services are generally tax-free. But if you buy a product as part of the service, the product portion may be taxed. For example, a haircut is not taxed, but shampoo sold separately is.

What if a business did not charge me sales tax?

If a local business forgot to charge tax, you can report it to the Kentucky Department of Revenue, though they focus on businesses rather than individual transactions. If an online seller did not charge tax, you are technically supposed to report it as use tax on your state return, but this is rarely enforced for individual buyers.