Kentucky Sales and Use Tax Changes for 2023

Effective January 1, 2023, the Kentucky sales and use tax will apply to over 30 additional service categories.

Businesses that provide these services are required to collect the 6% sales tax from their customers, unless otherwise noted.

These changes are the result of House Bill 8 that passed in 2022. The bill lowers income taxes from 5% to 4.5% but expands sales taxes to a variety of services to offset that loss in state revenue. For example, a person making $50,000 currently pays $2,500 in state income taxes. Under the new 4.5% rate, the same person would pay $2,250.

Businesses that the Department of Revenue thought may provide the additional service categories were contacted via mail in November, 2022. If you received a letter, it does not necessarily mean that these changes apply to you and likewise, if you did not receive a letter, that does not mean your company’s services are not subject to the sales tax.

Below is a full list of services that will now be required to collect the 6% sales tax from their customers:

1. Photography and photo finishing
2. Marketing
3. Telemarketing
4. Public opinion and research polling
5. Lobbying
6. Executive employee recruitment
7. Website design and development
8. Website hosting
9. Facsimile transmission
10. Private mailroom
11. Bodyguarding
12. Residential/nonresidential security system monitoring
13. Private investigating
14. Process server services
15. Repossession of tangible personal property
16. Personal background checks
17. Parking
18. Road and travel services
19. Condo time-share exchange services
20. Short-term rental of space
21. Social event planning and coordination
22. Leisure, recreational and athletic instructional services
23. Recreational camp tuition and fees
24. Personal fitness training
25. Non-medical massage
26. Cosmetic surgery
27. Body modification (piercing, tattoos)
28. Testing services
29. Interior decorating and design
30. Household moving
31. Specialized design (fashion)
32. Lapidary services
33. Labor and services for commercial refrigeration
34. Labor to repair or alter apparel, footwear, watches or jewelry
35. Prewritten computer software access services

If you are in doubt if your business does or does not apply to this expanded tax law, please contact Lockshield Partners Accounting Services and any of our knowledgeable staff accountants can assist you.  

For more information regarding House Bill 8 and the Kentucky sales and use tax, click HERE for the June Kentucky Department of Revenue Sales Tax Facts newsletter, HERE for the September issue and HERE for a Guide to House Bill 8.

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Tax advice is offered through Lockshield Partners Accounting Services. Lockshield Partners Financial Services and Lockshield Partners Accounting Services are separate entities.