Resources Blog Reporting
by TaxJar December 31, 2024
If you buy products exclusively to resale in the state of Kentucky you can often avoid paying sales tax on your purchases by presenting a Kentucky resale certificate at checkout. Always keep in mind that you should only use your resale certificate to buy items you intend to resell or that you intend to use as a component part of an item for resale or incorporated into a service that will be taxed when it is sold. Any other use of a Kentucky resale certificate (such as buying office supplies or personal items) is usually considered unlawful.
Here are the rules and regulations for using (and accepting) a resale certificate in Kentucky.
In Kentucky, you can buy items tax free as long as you plan to either resale them or use them as a component part in an item you intend to lease or resale. According to Kentucky law 103 KAR 28:051, if you don’t end up reselling the item you bought tax free, or if you end up using all or part of it in your own business, then you are responsible for paying use tax on the item you bought tax free.
Kentucky distributes a resale certificate for online sellers to use when buying an item to resale:
To use this resale certificate to make a tax free purchase, simply fill it out completely and present it to the retailer where you are making the purchase. Keep in mind that retailers reserve the right to refuse resale certificates.
If you are a Kentucky retailer, and you are presented with a resale certificate, you have a few responsibilities:
Note to retailers: Kentucky has potential criminal penalties for misuse of a resale certificate.
To learn more about TaxJar and get started, visit TaxJar.com/product .
It's time to solve your tax complexity
Talk to a TaxJar expert about automating your sales tax compliance.