On June 21, 2018, the United States Supreme Court ruled that a state may impose sales tax collection responsibilities on businesses that have no physical presence in the state (remote sellers). See South Dakota v. Wayfair, 138 S.Ct. 2080 (2018).
Due to this ruling, existing provisions in tax laws in many states immediately became effective and out-of-state businesses became obligated to collect sales taxes (primarily from online sales) and remit them to the states to which the products are shipped.
In response to the Supreme Court's decision in South Dakota v. Wayfair, Kentucky has implemented regulations that require remote sellers with no physical presence in the state to collect and remit sales tax. Specifically, out-of-state retailers who meet certain thresholds—such as a specified amount of sales or transactions within Kentucky—are obligated to register with the state and collect sales tax on transactions shipped to Kentucky customers. This applies to online sales and is intended to level the playing field between online and brick-and-mortar businesses, ensuring that sales tax is collected regardless of where the seller is located. Businesses should consult with an attorney or the Kentucky Department of Revenue to understand their specific obligations under Kentucky law.