Key figures
Kentucky receivables
2026, with sources
One rate, statewide
Kentucky’s sales and use tax is 6% with no local sales taxes, which makes collection simpler than in most states: one rate wherever the customer is. Returns are filed and paid electronically through MyTaxes.
The base is broader than many founders expect. Kentucky taxes a long list of services, including prewritten computer software access services, and from August 1, 2026 data brokering services as well.
Remote sellers after August 1, 2026
Before August 1, 2026 a remote retailer had to register with 200 or more sales into Kentucky or $100,000 in gross receipts. HB 757 removed the transaction test, so the threshold is now $100,000 in gross receipts in the previous or current calendar year.
Example: a SaaS company with 400 small Kentucky customers paying $15 a month has $72,000 of Kentucky receipts. Under the old rule it crossed the 200-transaction line; from August 1, 2026 it is below the threshold and, without physical presence in Kentucky, not required to collect. If it grows past $100,000 it registers and charges 6%.
The federal baseline
This page covers what Kentucky adds. The federal rules underneath it apply here too.
Common questions
Is our SaaS taxable in Kentucky?
Yes. Prewritten computer software access services are on the list of services taxed under KRS 139.200, so subscription software accessed by Kentucky customers is taxable at 6%, business and consumer customers alike.
Does the 200-transaction test still apply in Kentucky?
From August 1, 2026, only $100,000 or more in gross receipts from sales into Kentucky in the previous or current calendar year. HB 757 removed the 200-transaction test, so a remote seller registered only because of transaction count is no longer required to stay registered on that basis.
Receivables next door
- ILIllinois receivablesIllinois doesn’t tax remotely accessed SaaS, but Chicago charges 15% on it; state nexus is now $100,000 of Illinois sales with no transaction count.
- INIndiana receivablesIndiana charges a flat 7% with no local rates, counts only $100,000 of sales toward nexus since 2024, and doesn’t tax remotely accessed SaaS.
- MOMissouri receivablesMissouri’s economic nexus is $100,000 in taxable sales with no transaction test, and by regulation SaaS is not taxable. The state rate is 4.225% before local taxes.
- OHOhio receivablesOhio taxes SaaS used in business at 5.75% plus local rates, and the 200-transaction test still counts toward nexus.
- TNTennessee receivablesTennessee charges 7% plus local tax, taxes remotely accessed software, and requires remote sellers to register once retail sales into the state exceed $100,000 over 12 months.
- VAVirginia receivablesVirginia doesn’t tax SaaS or other software delivered over the Internet. Sales tax runs 5.3% to 7% by locality, and remote sellers register at $100,000 or 200 transactions.
- WVWest Virginia receivablesWest Virginia’s 6% sales tax reaches many services and prewritten software, while electronic data processing is exempt, so SaaS depends on what it does. Remote sellers register at $100,000 or 200 transactions.
Founder guides on this
- Sales taxSales tax nexus for startups: when you owe tax in a stateSince Wayfair, selling into a state can create a sales tax obligation. How economic nexus works, why SaaS is taxable in some states and when to register.
- RevenueDeferred revenue for SaaS startups, explainedAn annual prepayment is cash today and revenue over a year. How deferred revenue works under ASC 606, why it’s a liability, and the schedule behind it.
- StripeHow to reconcile Stripe payouts to your booksA Stripe payout is charges less fees, refunds and disputes, batched across days. How to book it gross, tie it to the bank, and keep revenue right.
More of the Kentucky guide
- AccountingAccounting and state tax in KentuckyCorporate tax, conformity to federal rules, apportionment and what it does to your books
- PayablesPayables and contractors in KentuckyPaying vendors and contractors: 1099 filing, use tax, contractor tests and withholding
- PayrollPayroll taxes and employer rules in KentuckyWithholding, unemployment insurance, paid leave, minimum wage and the rules on paydays
- ComplianceCompliance and filings in KentuckyRegistering to do business, annual reports, franchise tax and the filing calendar
- AdvisoryAdvisory: credits and decisions in KentuckyCredits, incentives and the decisions that are cheaper to get right the first time
Sources
Checked against each agency’s own page on . Rates and thresholds change, usually on January 1.
General information for US companies, not tax, legal or accounting advice for yours. Rules and thresholds change; confirm the specifics with a CPA or the agency before you act on them.