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Can I collect sales tax from customers in different states without violating tax laws in Kentucky? What are the requirements?
To answer your question, if you are a retailer engaged in business in Kentucky or a remote retailer meeting certain thresholds, you are required to collect sales tax from purchasers in Kentucky [1.3]. Remote retailers selling tangible personal property or digital property delivered or transferred electronically to a purchaser in Kentucky must register for a sales and use tax permit and collect the tax imposed by Kentucky law if they sold tangible personal property or digital property that was delivered or transferred electronically to a purchaser in Kentucky in 200 or more separate transactions in the previous calendar year or the current calendar year, or if their gross receipts derived from the sale of tangible personal property or digital property delivered or transferred electronically to a purchaser in Kentucky in the previous calendar year or current calendar year exceeds $100,000 [1.3].
However, according to the provisions of the Streamlined Sales and Use Tax Agreement (SSUTA), a seller who registers under the terms of the SSUTA agreement to pay or to collect and remit applicable sales and use tax on sales made in Kentucky shall be exempt from assessment for uncollected or unpaid sales or use tax together with penalty and interest for sales made during the period the seller was not registered in Kentucky if certain conditions are met [1.2].
In summary, if you are a retailer engaged in business in Kentucky or a remote retailer meeting certain thresholds, you are required to collect sales tax from purchasers in Kentucky. However, if you register under the SSUTA agreement and meet certain conditions, you may be exempt from assessment for uncollected or unpaid sales or use tax together with penalty and interest for sales made during the period you were not registered in Kentucky [1.2][1.3].
Please note that sales and use taxes are in addition to any excise, license, privilege, or other tax imposed under existing provisions of the Kentucky Revised Statutes [1.5].
Source(s):
- [1.2] Conditions for exemption from assessment for uncollected or unpaid sales or use tax.
- [1.3] Retailer’s duty to collect tax – Taxes deemed to be held by retailer in trust – Registration and collection by remote retailer.
- [1.5] Sales and use taxes are in addition to other taxes.
Jurisdiction
Kentucky