Businesses from other states are permitted to use resale certificates in Kentucky as long as they comply with the same requirements as a Kentucky resale certificate, according to the Kentucky Department of Revenue. This means that the certificate must be legitimate and include the buyer’s resale number in addition to the buyer’s name, address, and contact information.
In this regard, shipping fees are taxable in Kentucky if they are included in the sale of taxable goods. The cost of shipping, for instance, is taxable if a business purchases taxable items and pays for shipping. The cost of shipment, however, is not taxed if the company buys non-taxable goods and pays for delivery.
In Kentucky, services are typically exempt from the application of sales tax. There are a few exceptions to this rule, though. Sales tax may be applied to the total cost of the service, for instance, if the service includes the sale of tangible personal property, like the selling of parts in a repair service.
In regards to labor costs, sales tax is not imposed on labor costs alone in Kentucky. Sales tax may be applied to the entire transaction, though, if the labor is done in combination with the sale of taxable goods.
The sales tax in Kentucky is 6%, and in some locations there is an extra local tax of 2.25%. Therefore, depending on the location of the transaction, the overall sales tax rate in Kentucky might range from 6% to 8.25%.
In conclusion, if an out-of-state resale certificate satisfies the same criteria as a Kentucky resale certificate, Kentucky will accept it. While services and labor fees may occasionally be taxable, shipping costs are taxed if they are included in the sale of taxable goods. The overall sales tax range in Kentucky varies from 6% to 8.25%, with a 6% state sales tax and an extra 2.25% municipal tax in select locations.