NSNexus by State

Kentucky vs Tennessee Sales Tax Nexus — Comparison 2026

Updated

Compare economic nexus thresholds, state and local rates, and filing rules in Kentucky and Tennessee.

MetricKentuckyTennessee
Economic nexus threshold$100,000$100,000
Transaction threshold200None
State rate6.00%7.00%
Avg. local raten/a2.61%
Combined state + local6.00%9.61%
Marketplace facilitatorYesYes
Effective since2018-10-012020-10-01

Which state is easier for sellers?

For low-revenue sellers: nexus triggers first in both states because of its threshold. If you cross that first, you register there first.

On rate: Kentucky is friendlier for customers with a combined state + local rate of 6.00% vs 9.61%.

Kentucky also adds a 200-transaction trigger that Tennessee doesn't have.

Kentucky — nexus note

Kentucky sales tax nexus and economic nexus threshold: through July 31, 2026, a remote retailer must register and collect Kentucky sales tax once it has $100,000 or more in gross receipts from sales into Kentucky OR 200 or more separate sales into Kentucky in the previous or current calendar year — meeting either test triggers the requirement (Kentucky Department of Revenue Wayfair guidance, HB 487; collections required beginning October 1, 2018). Effective August 1, 2026, House Bill 757 (2026 Regular Session, enacted over the Governor's veto) removes the 200-transaction test for both remote retailers and marketplace providers, leaving a $100,000 sales-only threshold that counts tangible personal property, digital property, and services delivered, transferred electronically, or provided to a Kentucky purchaser; sellers registered solely because of transaction volume should review whether they can deregister under Kentucky's trailing-nexus rules. Kentucky's marketplace facilitator law (HB 354) has been effective since July 1, 2019 — Amazon, Etsy, eBay, and Walmart collect and remit Kentucky sales tax on facilitated sales, registering once for all third-party sellers per KRS 139.450 (procedure clarified by HB 249, effective July 1, 2021). Kentucky levies a flat 6% statewide sales tax with no local sales taxes, so the rate is identical at every Kentucky delivery address. HB 757 also extends Kentucky sales and use tax to data brokering services beginning August 1, 2026. Direct-to-consumer sales outside any marketplace remain the seller's own collection responsibility once nexus is met.

Tennessee — nexus note

Economic nexus in Tennessee triggers at $100,000 in gross sales delivered into Tennessee in the current or prior calendar year. No transaction count threshold.

What to do next

Use the nexus calculator to check exactly which of Kentucky and Tennessee you've already triggered. Then read each state's full guide:

Kentucky overview →Tennessee overview →

Frequently asked questions

Which state has the lower sales tax nexus threshold, Kentucky or Tennessee?
Both Kentucky and Tennessee publish the same economic nexus dollar threshold of $100,000, so a remote seller would reach each state's published threshold at the same level of in-state sales. These are the thresholds published by each state's tax authority as of 2026-05-27; confirm against the official source before registering.
Do both Kentucky and Tennessee have marketplace facilitator laws?
Yes. Both Kentucky and Tennessee have marketplace facilitator laws, so marketplaces such as Amazon, Etsy, and eBay collect and remit sales tax on the sales they facilitate in both states. Direct-to-consumer sales you make outside a marketplace remain your own responsibility once you cross each state's threshold. Verified 2026-05-27.
Which has the lower sales tax rate, Kentucky or Tennessee?
Kentucky has the lower combined state and local sales tax rate at 6.00%, compared with 9.61% in Tennessee. These are the statewide base rate plus the average local rate; the exact rate depends on the customer's delivery address. As of 2026-05-27.
Do I need to register for sales tax in both Kentucky and Tennessee?
It depends on where you cross each state's economic nexus threshold (or have physical presence there). Kentucky's published threshold is $100,000 or 200 transactions, and Tennessee's is $100,000. You generally register in a state only once you cross its threshold, so you may have an obligation in one, both, or neither. Run the nexus calculator with your actual sales and confirm with each state's official source. Thresholds as of 2026-05-27.
When did economic nexus take effect in Kentucky and Tennessee?
Kentucky's economic nexus rule took effect on 2018-10-01, and Tennessee's took effect on 2020-10-01. Both stem from the 2018 South Dakota v. Wayfair Supreme Court decision, which let states require remote sellers to collect once an economic threshold is met.

Sources

date_retrieved: Kentucky 2026-05-24 · Tennessee 2026-05-27