NSNexus by State

Kentucky Digital Products Sales Tax Guide — 2026

Updated

Guide content last reviewed: 2026-06-06

If your Digital Products business sells $100,000 or 200 transactions into Kentucky in a calendar year, you have economic nexus and must register, collect, and remit Kentucky sales tax.

Are digital products taxable in Kentucky?

Yes — Kentucky taxes most digital products as "digital property" at the flat 6% state rate. Kentucky has no local sales taxes, so there is no buyer-address rate lookup for digital goods.

Taxable digital categories

  • Digital audio works — downloaded or streamed music, audiobooks, ringtones, and podcasts
  • Digital books — eBooks
  • Finished artwork and digital photographs
  • Digital periodicals, newspapers, and magazines
  • Video games and electronic games
  • Video and audio greeting cards
  • Digital codes that grant a right to any taxable digital property above

Not taxable / special treatment

  • Digital audio-visual works (movies, TV shows, streamed video) — excluded from the "digital property" definition, but streamed video is taxed separately as a multichannel video programming service (since July 1, 2019), not under the sales-tax digital-property rule
  • Satellite radio programming — excluded from "digital property"
  • SaaS and electronically delivered "canned" software — governed by Kentucky’s software-taxability rule, not the digital-property definition (see the SaaS guide)

Kentucky has imposed sales and use tax on digital property since August 1, 2009 under KRS 139.200 and the KRS 139.010 definition of “digital property.” The 6% rate is the only rate that applies — Kentucky does not levy local sales taxes — so a Kentucky buyer pays the same 6% on a taxable eBook or download regardless of city or county.

The split that trips sellers up is audio vs. audio-visual: streamed music (a “digital audio work”) is taxable digital property, but streamed video (a “digital audio-visual work”) is excluded from digital property and instead taxed under Kentucky’s multichannel video programming service rules.

Marketplaces: a marketplace facilitator (app store, platform, or marketplace) that sells taxable digital property into Kentucky must collect and remit the 6% tax on those facilitated sales under KRS 139.450 (effective July 1, 2019). If you sell digital downloads only through such a marketplace, the facilitator generally handles Kentucky collection; direct sales from your own store remain your responsibility once you have nexus.

Kentucky digital-tax rules last verified: 2026-06-06. Sources: Kentucky Revised Statutes § 139.010 — definition of "digital property"; Kentucky Department of Revenue — Sales Tax Facts. date_retrieved: 2026-06-06. State rules change — confirm category-by-category with the Kentucky state tax agency before invoicing.

Sales tax on digital products in Kentucky

“Digital products” covers eBooks, audiobooks, video downloads, online courses, streaming subscriptions, digital artwork, stock photos, music, and similar non-physical delivered goods. Whether Kentucky taxes them depends on how the state classifies the product — “specified digital products”, “electronic transfer of canned software”, or a service. Rules vary more than for physical goods.

If taxable in Kentucky, the product is subject to 6.00% state rate plus any applicable local rate based on the buyer's address.

Which digital products does Kentucky tax?

Most states sort digital goods using the Streamlined Sales Tax definition of “specified digital products”, which splits them into three subcategories a state can tax or exempt independently:

  • Digital audio-visual works — downloaded or streamed movies, shows, and recorded events. Streaming video subscriptions fall here.
  • Digital audio works — downloaded or streamed music, podcasts, audiobooks, and ringtones. Streaming music subscriptions fall here.
  • Digital books — eBooks. Newspapers, periodicals, blogs, and databases are excluded from the “book” definition and follow their own rules.

Because a state may tax one subcategory and exempt another, “are digital products taxable” rarely has a single yes/no answer. Where Kentucky taxes a subcategory, the charge is subject to the 6.00% state rate plus any local rate at the buyer’s address. Software subscriptions (SaaS and electronically delivered “canned” software) sit outside this framework and follow Kentucky’s separate software-taxability rule — see the SaaS guide for that determination.

Framework source: Streamlined Sales Tax Governing Board — “Specified Digital Products” definition (SSUTA §332). date_retrieved: 2026-06-04. State-by-state taxability still varies; verify each subcategory with the Kentucky Department of Revenue before invoicing.

Key distinctions

  • Specified digital products. Many states (adopting Streamlined Sales Tax definitions) tax SDPs — digital audio/video/books.
  • Online courses and education. Most states treat live-instruction courses as non-taxable services but treat pre-recorded course access as taxable digital products. Watch for this split if you sell both.
  • Subscriptions. Bundled subscription boxes with mixed digital + physical content are often taxed as a single taxable bundle — you can't allocate across taxable and non-taxable components unless the invoice separately states them.
  • B2B vs B2C. Some states exempt B2B digital products when bought for resale or when the buyer has a direct-pay permit. Keep certificates on file.

Common digital-product mistakes in Kentucky

  • Treating all digital products the same across states — eBook tax treatment differs from SaaS, which differs from streaming.
  • Bundling digital + physical goods without a line-item breakdown. Most states tax the full bundle at the physical rate if not itemized.
  • Applying origin-based sourcing (your state's rate) when most states source digital products to the buyer's billing or shipping address.

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.

What to do next

Read the full Kentucky overview for thresholds, filing frequency, marketplace facilitator rules, and registration links. Use the nexus calculator to check whether you have crossed the threshold. For background on the post-Wayfair economic nexus framework, see the pillar guide.

Frequently asked questions

Are digital products taxable in Kentucky in 2026?
Yes. Kentucky taxes "digital property" — eBooks, downloaded or streamed music, audiobooks, digital photographs, finished artwork, digital newspapers and magazines, and video games — at the 6% state rate under KRS 139.010 and KRS 139.200. Kentucky has no local sales taxes, so 6% is the only rate that applies. Digital audio-visual works (streamed video) are excluded from "digital property" and taxed separately.
Does Kentucky tax digital downloads (eBooks, music, etc.)?
Yes. eBooks (digital books) and downloaded or streamed music (digital audio works) are taxable digital property in Kentucky at the 6% state rate. Kentucky has taxed digital property since August 1, 2009.
Does Kentucky charge sales tax on streaming services in 2026?
It depends on the type. Streamed music is a "digital audio work" and is taxable digital property at 6%. Streamed video is a "digital audio-visual work," which is excluded from Kentucky's digital-property definition — but it is taxed separately as a multichannel video programming service (since July 1, 2019), not under the sales-tax digital-property rule.
Who collects Kentucky sales tax on digital products sold through a marketplace?
A marketplace facilitator (an app store, platform, or online marketplace) that sells taxable digital property into Kentucky must collect and remit the 6% tax on those facilitated sales under KRS 139.450, effective July 1, 2019. Direct sales from your own store remain your responsibility once you have nexus.
Are SaaS and software subscriptions taxed as digital products in Kentucky?
No — SaaS and electronically delivered "canned" software fall outside Kentucky's "digital property" definition and follow the separate software-taxability rule. Check the Kentucky SaaS guide and confirm with the Department of Revenue before invoicing.

Sources

date_retrieved: 2026-05-24