Kentucky charges a 6% state sales tax on most goods and some services

Kentucky's base sales tax rate is 6% on the purchase price of tangible goods — things you can touch and take home. This is a tax you pay at the register, and the seller collects it and sends it to the state. The 6% applies to clothing, groceries, electronics, furniture, and most other items you buy in stores or online.

Some cities and counties in Kentucky add a local sales tax on top of the state rate. This local tax ranges from 0% to 2.5%, depending on where you live. Your total sales tax bill is the state rate plus your local rate combined. For example, if you live in Louisville (Jefferson County), you pay 6% state plus 1.5% local, for a total of 7.5%.

Not everything is taxed at the same rate. Some items are taxed at a lower rate, some are not taxed at all, and some services fall outside the sales tax system entirely. Understanding what is and is not taxed helps you predict what you will actually pay.

Key Takeaways

  • Kentucky's state sales tax is 6%, and most cities and counties add between 0% and 2.5% on top of that.
  • Groceries, prescription medications, and medical equipment are not subject to sales tax in Kentucky.
  • Clothing and shoes are taxed at the full rate, unlike some other states that exempt them.
  • Services like haircuts, repairs, and professional fees are generally not taxed, but labor charges tied to a taxable good sometimes are.
  • Online purchases from out-of-state sellers are subject to Kentucky sales tax if the seller has a physical presence in the state or meets federal thresholds.

What is not taxed in Kentucky

Kentucky exempts certain items from sales tax because they are considered necessities or serve a public purpose. Food for human consumption — groceries, produce, meat, dairy — is not taxed. This exemption does not cover prepared food, restaurant meals, or food sold at a deli counter. A loaf of bread from the grocery shelf is tax-free; a sandwich from the deli is taxed.

Prescription medications and insulin are not taxed. Over-the-counter medicines like aspirin or cold medicine are taxed. Medical equipment and devices prescribed by a doctor — wheelchairs, hearing aids, oxygen equipment — are also exempt. Eyeglasses and contact lenses are taxed, but the prescription lenses themselves may may have access to for exemption if they are for medical correction of vision.

Most services are not subject to sales tax in Kentucky. This includes haircuts, plumbing repairs, car repairs, dental work, and professional services like accounting or legal advice. However, if a service involves the sale of a taxable good — for example, a plumber who charges for both labor and the cost of pipes and fittings — the material cost is taxed but the labor is not.

Items that are always taxed

Clothing and shoes are taxed at the full 6% state rate in Kentucky, with no exemption. This includes everyday wear, work uniforms, and athletic shoes. Some states exempt clothing, but Kentucky does not. A pair of jeans, a winter coat, and sneakers all carry the full sales tax.

Alcohol and tobacco products are taxed at the standard rate, though they also carry excise taxes that are separate from sales tax. A bottle of beer or a pack of cigarettes will show both the sales tax and the excise tax on your receipt. Gasoline is taxed at the standard rate as well, though the tax is usually included in the posted price at the pump.

Digital goods — software, apps, e-books, streaming subscriptions, and digital downloads — are taxed in Kentucky. If you buy a song, a movie, or a subscription service, you pay sales tax on it. This applies whether you buy from a Kentucky seller or an out-of-state seller.

How local sales tax works in your county

Kentucky allows cities and counties to impose their own local sales tax on top of the state rate. The local rate varies by location and is set by the local government. Some counties have no local sales tax; others have rates as high as 2.5%. You pay the local rate only on purchases made within that county or city.

The local rate applies to the same items as the state rate. If an item is exempt from state sales tax, it is also exempt from local sales tax. If an item is taxed at the state level, the local tax is added to it. When you check out, the register calculates both rates and shows them separately or combined, depending on the retailer's system.

If you live near a county line, you may see different total tax rates on either side. This is because the local rates differ. Some people shop strategically to take advantage of lower rates in neighbouring counties, though this is only practical for large purchases.

Sales tax on online and out-of-state purchases

Online purchases are subject to Kentucky sales tax if the seller has a physical presence in Kentucky — a store, warehouse, or office — or if the seller meets federal thresholds for remote sales. As of 2021, federal law requires online sellers to collect sales tax if they have more than $100,000 in annual sales or more than 200 transactions in Kentucky in the prior year. Most large online retailers now collect Kentucky sales tax automatically.

If an out-of-state seller does not collect Kentucky sales tax at checkout, you may be responsible for paying it yourself through a "use tax" return. In practice, most individual consumers do not file use tax returns, and Kentucky does not actively pursue them for small purchases. However, the tax is technically owed.

Shipping charges are generally not taxed in Kentucky, though this can vary by retailer and how they structure their billing. Some retailers include shipping in the taxable subtotal; others do not. Check your receipt to see how the retailer handled it.

Sales tax on vehicles and major purchases

Vehicle purchases are subject to sales tax in Kentucky. When you buy a car, truck, or motorcycle from a dealer, the sales tax is calculated on the purchase price and collected at the time of sale. The rate is the same 6% state rate plus any local tax. If you trade in a vehicle, the sales tax is calculated on the net price after the trade-in value is subtracted.

Private vehicle sales — buying a car directly from another person — are also subject to sales tax. You pay the tax when you register the vehicle with the Kentucky Transportation Cabinet, not at the time of purchase. Bring proof of the purchase price to the registration office.

Large purchases like furniture, appliances, and electronics are taxed at the standard rate. There is no threshold above which the tax rate changes or disappears. A $5,000 sofa is taxed the same way as a $50 item.

Frequently Asked Questions

Do I pay sales tax on groceries in Kentucky?

No. Food for human consumption — produce, meat, dairy, bread, canned goods — is not taxed. This exemption does not cover prepared foods, restaurant meals, or items from a deli counter. A frozen pizza from the grocery shelf is tax-free; a slice of pizza from a restaurant is taxed.

Is clothing taxed in Kentucky?

Yes. Clothing and shoes are taxed at the full 6% state rate, plus any local tax. Kentucky does not exempt clothing the way some other states do. This includes everyday wear, work uniforms, and athletic shoes.

What is the total sales tax rate where I live?

The total is 6% state plus your local rate. Local rates range from 0% to 2.5% depending on your county or city. You can find your local rate by searching "[your county name] Kentucky sales tax" or by calling your county clerk's office.

Do I pay sales tax on services like haircuts or car repairs?

No. Most services — haircuts, repairs, professional fees — are not taxed in Kentucky. However, if the service involves selling you a taxable good (like parts for a repair), the material cost is taxed but the labor is not.

Do I have to pay sales tax on online purchases?

Yes, if the seller collects it. Large online retailers now collect Kentucky sales tax automatically. If a seller does not collect it, you may owe use tax, though enforcement on individual consumers is rare.