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Taxes / State tax rules / Kentucky

Selling on eBay, Poshmark or Etsy from Kentucky: sales tax and 1099-K rules

Under KRS 139.450, a marketplace provider whose Kentucky sales, its own and those it facilitates, exceed $100,000 collects Kentucky's 6% sales and use tax on the entire sales price of each sale it facilitates (for periods from July 1, 2019), and the marketplace retailer is relieved of all liability for the tax on those sales. For Form 1099-K, no Kentucky threshold appears on the Department of Revenue pages checked for this page; the federal test is over $20,000 in more than 200 transactions.

General information, not tax advice. Check with a tax professional about your own situation.

Checked against the official pages listed below on .

Kentucky in short

General sales tax:
Yes, 6% state rate
Marketplace facilitator law:
Yes: KRS 139.450 (HB 354, 2019; amended by HB 249, 2021, and HB 757, 2026), since Jul 1, 2019
When a marketplace must collect:
retail sales made or facilitated for delivery to Kentucky purchasers that in any combination exceed $100,000 (KRS 139.450(2)(a), effective August 1, 2026); before August 1, 2026, $100,000 or 200 separate transactions
Form 1099-K:
No state rule stated on the pages checked

Who collects the tax on a marketplace sale

A marketplace provider over the threshold registers for a sales and use tax permit and collects Kentucky tax no later than the first day of the calendar month that is at most 60 days after it reaches the threshold, on the entire sales price of each taxable sale it makes or facilitates, whether or not the seller would have had to collect. HB 354 required providers to collect on third-party sales for periods beginning July 1, 2019.

If you sell only through marketplaces

KRS 139.450(4)(b) relieves the marketplace retailer (the seller) of all liability for collecting and remitting the sales or use tax on sales the marketplace provider facilitates, and the provider is the one subject to audit on them. The Department of Revenue pages checked here don't say whether a Kentucky seller with only marketplace sales needs its own permit.

Registration, resale certificates and what changes when you also sell direct have their own page: Kentucky: seller's permit and resale certificate rules.

The law: KRS 139.450 (HB 354, 2019; amended by HB 249, 2021, and HB 757, 2026), effective .

"The marketplace retailer shall be relieved of all liability for the collection and remittance of the sales or use tax on sales facilitated by the marketplace provider."
Kentucky Legislature (Legislative Research Commission), KRS 139.450, Presumption regarding property shipped ... Duties of marketplace provider, KRS 139.450(4)(b)
"The marketplace provider shall collect Kentucky tax on the entire sales price or purchase price paid by a purchaser on each retail sale subject to tax under this chapter"
Kentucky Legislature (Legislative Research Commission), KRS 139.450, Presumption regarding property shipped ... Duties of marketplace provider, KRS 139.450(2)(e)
"House Bill 757 was the primary tax legislation enacted by the 2026 General Assembly, which removed the economic nexus standard of 200 or more sales transactions as a registration requirement for remote retailers (KRS 139.340) and marketplace providers (KRS 139.450)."
Kentucky Department of Revenue, Kentucky's 2026 SSUTA Compliance Recertification, Letter to the Streamlined Sales Tax Governing Board, July 29, 2026

Sources: KRS 139.450, Presumption regarding property shipped ... Duties of marketplace provider; Kentucky Sales Tax Facts, June 2019.

Kentucky's sales tax

Kentucky's sales and use tax rate is 6%, the rate the Department of Revenue's Sales Tax Facts newsletters use. Since August 1, 2026, House Bill 757 also brought data brokering services and pay phone receipts into the sales and use tax base.

Sources: Kentucky Sales Tax Facts, June 2019; Kentucky's 2026 SSUTA Compliance Recertification.

Form 1099-K: Kentucky and the federal test

The Department of Revenue pages checked for this page (its Sales Tax Facts newsletters and 2026 Streamlined recertification letter) don't address Form 1099-K, so no Kentucky 1099-K rule is stated here.

The federal test, for comparison: the IRS says a payment app or online marketplace must send a Form 1099-K when payments for goods or services total over $20,000 in more than 200 transactions, and adds: "However, they may send you a Form 1099-K with lower amounts and/or transactions." (Understanding your Form 1099-K, reviewed ). The Instructions for Form 1099-K count both parts for the calendar year, through each platform separately, and say the box 1a gross amount is figured without adjustments for credits, discounts, fees, refunds or shipping, so a 1099-K figure is not the same as profit. More on the federal rule in Form 1099-K for resellers.

Sources: Kentucky Sales Tax Facts, June 2019; Kentucky Sales Tax Facts, June 2021; Kentucky's 2026 SSUTA Compliance Recertification.

Worked examples

A $25 sale to a Kentucky buyer

The marketplace provider collects 6%: $25 x 6% = $1.50, on the entire sales price. Under KRS 139.450(4)(b), you as the marketplace retailer have no liability for collecting or remitting it.

A marketplace near the threshold in 2026

Before August 1, 2026, a provider with 250 small Kentucky sales worth $40,000 met the 200-transaction standard; under the amended KRS 139.450 effective August 1, 2026, only sales over $100,000 count, so that provider would be under the threshold. Large marketplaces are far over $100,000 either way.

Edge cases and details

  • Since HB 249 (effective July 1, 2021), a marketplace provider may report its direct sales and facilitated sales on one permit, giving the department a breakdown on request, or on two permits; the 2021 amendment also extended the registration window from 30 to 60 days.
  • No class action may be brought against a marketplace provider on behalf of purchasers over an overpayment of tax it collected (KRS 139.450(5)).
  • KRS 139.450(1) presumes that tangible personal property shipped or brought into Kentucky by the purchaser was purchased from a retailer for storage, use or other consumption in Kentucky.
  • House Bill 757's changes, including removing the 200-transaction standard, took effect August 1, 2026, according to the department's July 29, 2026 recertification letter.

What to do

  1. Keep each marketplace's sales report showing the Kentucky tax it collected on your sales.
  2. If you also sell directly to Kentucky buyers, ask the Department of Revenue or a tax professional about registering for those sales.
  3. Check with a tax professional about Kentucky income tax and the federal 1099-K.

Common questions

Am I liable for Kentucky sales tax on sales through a marketplace?

KRS 139.450(4)(b) says the marketplace retailer shall be relieved of all liability for the collection and remittance of the sales or use tax on sales facilitated by the marketplace provider.

Did Kentucky drop its 200-transaction threshold?

Yes. The Department of Revenue says House Bill 757 (2026) removed the 200-transaction economic nexus standard for remote retailers and marketplace providers, effective August 1, 2026; the $100,000 test remains.

Related

General information, not tax advice

This page summarizes Kentucky's own published pages and statutes as read on , and the IRS's 1099-K pages. It doesn't say what you should file, register for or pay. Rules depend on your situation and change: check with a tax professional, or with the state's revenue department.

Sources

Official pages this page is built from, with the day each was read.

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