A six percent use tax may be due if you make out-of-state purchases for storage, use or other consumption in Kentucky and did not pay at least six percent state sales tax to the seller at the time of purchase.
For example, if you order from catalogs, make purchases through the Internet, or shop outside Kentucky for items such as clothing, shoes, jewelry, cleaning supplies, furniture, computer equipment, software, office supplies, books, souvenirs, exercise equipment or subscribe to magazines, you may owe use tax to Kentucky.
It is important to remember that use tax applies only to items purchased outside Kentucky, including another country, which would have been taxed if purchased in Kentucky.
In addition to the use tax line found on the Sales and Use Tax returns and the Consumer Use Tax return for businesses, the Department provides three additional options for individuals to report their use tax.
- Consumer Use Tax Return - Form 51A113(O) may be filed during the year each time you make taxable purchases.
- You can report and pay use tax on an annual basis at the same time you file your Kentucky individual income tax return. Please see the Use Tax Look-Up Table information below.
- County Clerks verify payment of use tax on tangible personal property purchased out-of-state and offered for titling or first-time registration in Kentucky.
Use Tax Look-Up Table to Assist Taxpayers in Reporting Untaxed Retail Purchases
Recent statistics on retail sales confirm that more and more consumers have potential use tax liability through the increased use of online shopping. Every year, internet sales continue to increase more rapidly than sales at traditional brick and mortar stores.
Kentucky consumers are required to report use tax on their individual income tax returns to accurately reflect their tax liability, and to ensure that our Kentucky-based retailers are not unfairly undercut by competing out-of-state retailers that fail to collect the tax on taxable products delivered into Kentucky.
When a web-based retailer or any out-of-state retailer does not collect the 6 percent Kentucky sales and use tax, the consumer is responsible for reporting and paying use tax on those untaxed purchases, in accordance with KRS 139.330. The easiest way for the individual consumer to report and pay the use tax is on the state income tax return.
The Look-Up Table provides an option to report estimated use tax owed on retail purchases based upon Kentucky adjusted gross income when sales receipts are not readily available to calculate the actual unpaid use tax liability.