Kentucky Removes Sales Tax Transaction Threshold

Kentucky just joined the growing list of states nixing their transaction count thresholds for economic nexus. But while that simplifies compliance for many, the same bill includes a new tax that SaaS and tech companies need to be aware of.

Kentucky Drops the Transaction Count

Kentucky enacted House Bill 757, which updates its economic nexus rules for out-of-state businesses. Here are the exact changes:

• Effective August 1, 2026, the 200-transaction threshold is eliminated.
• You only trigger economic nexus if your gross receipts in the state exceed $100,000.
• That $100,000 total includes sales of physical products, digital goods, and services.

The elimination of the transaction count is a major win for any business with high transaction volumes but lower average order values. Removing this metric means you and your team only need to monitor your total sales volume for Kentucky.

Kentucky Adds a New 6% Tax on Data Brokering

The same bill also expands the state's 6% sales tax to cover data brokering.

• Kentucky will tax businesses that collect, analyze, and sell personal data to third parties.
• The state will apply this tax regardless of your pricing model, meaning it applies to subscriptions, per-user fees, and licensing charges.
• This rule also goes into effect on August 1, 2026.

Many tech and SaaS companies collect and monetize user data without realizing that it triggers sales tax under these types of definitions. If data monetization is part of your revenue model, this new rule directly impacts your taxability in Kentucky.

What You Should Do Next

If your tech or SaaS company operates in Kentucky, you need to check your services against the state's legal definition of data brokering.

The complete definition of what constitutes data brokerage by the state is: “the act of collecting, aggregating, and analyzing personal data for sale to a third party while possession of the personal data is maintained by the person providing the data brokering services or by the third party, wherever located, regardless of whether the charge for the services provided is on a per use, per user, per license, subscription, or some other basis.”

If your services fall under this definition, a product taxability review with a tax attorney is a good next step before the August 2026 effective date. A full review will help you see exactly which of your specific subscriptions or licensing fees might qualify for the new 6% tax.

How TaxValet Helps

Complex product taxability mapping is not something your finance team should have to guess at.

As your Fractional Sales Tax Department, TaxValet empowers you with the resources to evaluate your taxability and provide direct introductions to our tax attorney partners to help you make the final call. Once your taxability profile is set, we handle your complete sales tax execution so you know your compliance is locked in.

Schedule a call to see how TaxValet’s Fractional Sales Tax Department maps your exact exposure and applies expert judgment for your sales tax.