A reminder for remote sellers and marketplace providers is that, as of August 1, 2026, the Kentucky economic nexus threshold has been adjusted in a manner that the 200-transaction counting threshold has been deleted. Meaning that from this date, only one trigger for the economic nexus threshold remains, and that’s the threshold of USD 100,000 of gross receipts.
The threshold is calculated on the basis of the current or immediately preceding calendar year. Remote sellers or marketplace facilitators that have been registered only because of reaching the separate transaction threshold will most probably have an option to deregister from sales and use tax.
Impact of New Threshold Rules
The Kentucky Government decided to put in motion an idea to update sales and use tax status concerning the registration threshold, primarily to ease the compliance burden for remote sellers and online marketplaces whose gross receipts are below the threshold, and the only reason why they are registered for sales and use tax is a transaction counting threshold.
Many small businesses will highly benefit from this statute adjustment. When auditing their economic nexus threshold triggers, they should pay close attention to the calculation of gross receipts from the previous or current calendar year to avoid any potential mistakes while deregistering from sales and use tax on account of these updates.
Many registered remote sellers could be driven by the option to deregister or by the relief that they don’t need to register with this threshold adjustment, without conducting proper verification of their past or future gross receipts.
To avoid these costly mistakes, the diligent audit of gross receipts should be processed firstly, before making a move to deregister from sales tax, or not to register at all, because the transaction counting threshold is out of the picture.
Threshold Calculation
From August 1, 2026, the economic nexus threshold will be triggered when remote sellers or online marketplaces receive more than USD 100,000 in gross receipts from sales into the state. When this happens, the responsible persons should register and start collecting the sales and use tax.
Sales tax is imposed on the gross receipts from retail sales of tangible personal property, digital property, and sales of certain services.