Kentucky removes economic nexus transaction threshold, taxes data brokering services

Starting August 1, 2026, Kentucky is eliminating the 200-transactions threshold for remote sellers and marketplace providers, and also expanding sales and use tax to data brokering services.

Key takeaways

Kentucky’s economic nexus threshold will change from $100,000 or 200 transactions to simply $100,000 effective August 1, 2026.
Kentucky sales and use tax will apply to data brokering services starting August 1, 2026, except for data brokering services provided by state and local agencies.

Ending transaction threshold

The enactment of Kentucky House Bill 757 redefines the state’s sales and use tax nexus standard for remote retailers and marketplace providers. Effective August 1, 2026, Kentucky’s economic nexus threshold will change from $100,000 or 200 transactions to $100,000 in sales only.

The $100,000 threshold counts tangible personal property, digital property, or services delivered, transferred electronically, or provided to a purchaser in Kentucky.

Taxing data brokering services

HB 757 also extends Kentucky sales and use tax to data brokering services.

The bill defines data brokering services as “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.”

Sales tax does not apply to data brokering services provided by any board, bureau, cabinet, commission, department, or other agencies of the state, or to data brokering services by cities, counties, or special districts.

Other tax changes

HB 757 makes other tax changes in addition to the sales tax changes described above, including but not limited to:

Changing the taxable base for the excise tax on fantasy contest operators from gross receipts to entry fees, and increasing the tax rate from 12% to 15.25%
Changing the taxable base for the excise tax on prediction market operators from gross receipts to transaction fees, and increasing the tax rate from 15.25% to 17.25%
Removing taxicab companies’ ability to receive a refund of the motor fuels tax paid on motor fuels used in their regularly scheduled operations in Kentucky
Requiring local boards of education to publish additional information when proposing to levy a general tax rate

FAQ

As of April 21, 2026, 15 states plus Puerto Rico and Washington, D.C., have an economic nexus threshold of $100,000 or 200 transactions: Arkansas, Georgia, Hawaii, Kentucky, Maryland, Michigan, Minnesota, Nebraska, Nevada, New Jersey, Ohio, Puerto Rico, Rhode Island, Vermont, Virginia, Washington, D.C., and West Virginia. Kentucky will fall off this list on August 1, 2026.

Connecticut’s threshold is $100,000 and 200 transactions.

As of April 21, 2026, the following states have removed an economic nexus transaction threshold: Alaska, California, Colorado, Illinois, Indiana, Iowa, Louisiana, Maine, Massachusetts, North Carolina, North Dakota, South Dakota, Utah, Washington, Wisconsin, and Wyoming.

Kentucky will join this list on August 1, 2026.

No. Some states include only sales of taxable tangible personal property for remote sellers, while others include digital goods, exempt transactions, and/or services. Our state-by-state guide to economic nexus laws provides state-specific details.

Avalara AvaTax monitors committed transactions weekly to determine whether customers’ sales are approaching or have exceeded economic nexus thresholds (based on the transaction data customers provide). Customers are alerted when they approach an economic nexus threshold. This is one way Avalara helps ease the compliance burden for businesses.

Learn about Avalara Agentic Tax and Compliance^TM solutions.

Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.