Starting a business in Kentucky is an exciting venture, but it’s crucial to understand the legal requirements that come with it. A common area of confusion for many new business owners is understanding the need for a Kentucky Sales and Use Tax Permit, also known as a sales tax permit or a seller’s permit. This permit allows you to collect sales tax on taxable products and services from customers in Kentucky.
This blog will guide you through each step of applying for a sales tax permit, with clear instructions to help you and your business begin collecting sales tax effortlessly.
Related Topics:
Who Needs a Seller’s Permit in Kentucky?
A business must register for a sales tax permit in Kentucky if:
How to Register for a Seller’s Permit in Kentucky?
When applying for a Kentucky sales tax permit, you can use the online application process on the Kentucky Department of Revenue website to complete your sales tax registration.
1. Where to Apply for a Seller’s Permit in Kentucky?
The first step is to register for a sales tax permit online through the Kentucky Online Gateway and click on “Create New Account.”
You will then create an online user profile by entering an email and password. You will use this to log in to your Kentucky Online Gateway Account to proceed with the next steps of your registration.
Afterward, follow through the prompts that walk you through your registration process and provide the necessary information.
Under the Business Formation section, select the choice that best describes the nature of the business or organization you are registering for.
If you are an out-of-state/remote seller with no physical presence in Kentucky but have reached economic nexus, you will choose the second option that says “An out-of-state business that is now transacting business in Kentucky.”
If you are a seller with physical presence in Kentucky, you will choose the first option that says “A business that will be formed in Kentucky.”
If you are an out-of-state/remote seller with no physical presence in Kentucky but have employees from Kentucky whom you are withholding taxes for, you will choose the third option that says “An out-of-state business wishing to voluntarily withhold taxes on Kentucky residents who work outside Kentucky or voluntarily withhold on pension and retirement payments.”
If you are a seller with other businesses in Kentucky (e.g., a holding company for another company) with a physical presence that requires filing corporate income tax, you will choose the fourth option that says “An out-of-state corporation/limited liability entity maintaining an interest in a pass-through entity doing business in Kentucky.”
2. What Information Do You Need to Get a Seller’s Permit in Kentucky?
To successfully acquire a seller’s permit in Kentucky, it’s important to prepare and provide specific information and documents. The following is a list of the necessary information and documents required to register a sales tax permit in Kentucky:
- Business Identification Information: Legal Business Name, Physical Address, Mailing Address
- Business Entity Structure (i.e., Sole Proprietorship, Partnership, Subchapter S Corp., Corporation, LLC, etc.)
- Federal Employer Identification Number (EIN or FEIN)
- Name, Address, and SSN of Owners, Partners, or Officers
- Business Activity Details: Date & State of Incorporation, Start Date with the State of Kentucky (Nexus Start Date), Estimated Gross Monthly Sales Tax in Kentucky, Month of Fiscal Year End, Accounting Method (Cash vs. Accrual)
- NAICS Code
3. How Much are the Fees for Applying for and Renewing a Seller’s Permit in Kentucky?
Registering for a sales tax permit in Kentucky is free, and you won’t need to provide payment details to acquire your permit.
Kentucky sales tax permits do not need to be renewed and remain valid for as long as the business exists without any changes in ownership or structure.
4. What are Other Ways to Register for a Seller’s Permit in Kentucky?
- Use TaxHero. Registering for a seller’s permit, mainly when it involves multiple permits, can be a tedious and time-consuming task requiring much effort. Let the experts at TaxHero save you from this hassle, and let us handle the registration process in all states where you have nexus as part of our all-inclusive sales tax service.
What’s Next?
Once you submit your online registration through Kentucky Business One Stop, the Department of Revenue will review your application within 2-3 business days.
When your sales tax registration is approved, you will receive a confirmation of your application status to your email address. Check your One Stop Message Center for further instructions to get a copy of your sales tax permit.
Obtaining a Sales Tax Certificate requires you to collect sales tax on eligible sales in Kentucky. The document also specifies your filing frequency for sales tax returns and due dates.
If you ever encounter any difficulties, have any questions, or prefer TaxHero to manage these tasks on your behalf, don’t hesitate to reach out! Contact us today.
Related
