KY Sales Tax 101 Shipping States

Is Shipping in Kentucky Taxable?

by Mark Faggiano

Shipping Taxability Kentucky

Last updated July 14, 2017

You have sales tax nexus in Kentucky and just noticed that you sold an item to someone in that state. You’re excited because it’s a brand new state for you and that means your reach is expanding. At the same time, though, you’re a little apprehensive because you’re not sure whether you need to charge sales tax for shipping costs.

Each state is different – some require merchants to charge sales tax on shipping, others don’t, and yet others have ridiculously specific rules on the subject. Kentucky is no different in this regard.

Sales Tax on Shipping in Kentucky?

Here’s what the Kentucky Department of Revenue has to say about shipping taxability:

Delivery charges taxable Kentucky

What does that mean? Well, according to Kentucky’s code here, all gross receipts when selling taxable items are taxable. So this tells us that the shipping charges are included in those “gross receipts,” meaning they’re taxable.

On the other hand, if you’re selling an item that isn’t taxable in the state of Kentucky – like prescription medicine or certain farm equipment – then the shipping isn’t taxable.

Now, if you’re selling a package with partially taxable and partially non-taxable items, you can divide the package up either by weight or shipping price, and only charge sales tax on the shipping amount charged for the taxable item(s).

Summary of Sales Tax on Shipping in Kentucky

Kentucky sales tax rules are fairly straightforward when it comes to shipping. If shipping is part of the sale of taxable tangible personal property, then charge sales tax on the shipping charges. If the tangible personal property isn’t taxable, then don’t charge sales tax on the shipping charges.

Have questions or comments about shipping in Kentucky? Leave a comment below and start the discussion!

  • CP

    The snapshot you have posted regarding delivery fees is from a bulletin (to which you have also provided a direct link) published by the state in April 2004. The section you reference states that beginning July 1, 2004–later that same year, the definition of sales price changed to include ALL delivery charges, which means that delivery charges are taxable regardless of who makes the delivery.
    The only exceptions they mention are the delivery of tangible personal property which is not subject to sales tax (the charges for which are also exempt from sales and use tax) and charges for deliveries made by service companies who do not sell the tangible personal property being delivered, which are exempt from sales and use tax as a service.

    • Thanks so much for this comment! I found the relevant code and made this change. Appreciate the catch!

  • somefood4thought

    Is a company required by Kentucky state law to refund tax charged on shipping as well when issuing refunds?

  • somefood4thought

    Is a company required by Kentucky state law to refund tax charged on shipping as well when issuing refunds?

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