Kentucky just deleted its 200-transaction sales tax rule. Here is the arithmetic.
On August 1, 2026, Kentucky stopped counting your orders. It now counts only your dollars.
If you sell into Kentucky, the test you are measured against changed on August 1, and the change helps one kind of seller a great deal while doing nothing at all for another. Which one you are depends on arithmetic you can do today.
What changed
| Until 2026-07-31 | From 2026-08-01 | |
|---|---|---|
| Gross sales into Kentucky | $100,000 | $100,000 |
| Separate transaction test | 200 transactions | none |
| How they combine | Either one triggers | Dollars only |
| Measurement window | Previous or current calendar year | Previous or current calendar year |
| Basis | Gross sales | Gross sales |
The change came from House Bill 757, which amends KRS 139.340 to set the nexus standard for remote retailers and marketplace providers at "a sales volume threshold only". It was enacted on April 14, 2026 by veto override and took effect August 1, 2026.
Nothing else moved. The dollar figure is unchanged at $100,000, the window is still the previous or current calendar year, and Kentucky still measures gross sales, not net.
Who this helps: the low-price, high-volume seller
The 200-transaction test was never really about size. It was about price.
A seller shipping 240 orders of $35 enamel pins into Kentucky did $8,400 of business there. Under the old rule they met Kentucky's test on the 200th order, and everything that follows from meeting it, a registration, a filing cadence, a collection obligation, attached on $8,400 of sales. Under the new rule they are at 8.4 percent of the threshold and nowhere near it.
That seller is the whole point of the repeal, and Kentucky is one of a growing number of states to reach the same conclusion since 2023.
Who this does not help: anyone who already crossed
Here is the part that is easy to get wrong, and it is the reason a "current rules" lookup is not enough.
A rule change does not reach backwards. If you shipped 240 orders into Kentucky during 2025, you met Kentucky's test in 2025, on the day your 200th order shipped. That is a fact about a date that has already happened, and August 1, 2026 did not un-happen it. Whether an obligation that already attached can now be wound down is a separate question with a different answer, involving Kentucky's trailing nexus provisions, and it is a question for your accountant or the Department of Revenue.
What we can tell you precisely is the date you met the test, and which version of the rule you met it under. Those are two different rules now, and any tool that only knows today's rule cannot answer the first question at all.
We will take that principle apart properly in a follow-up, because this applies to every state that has ever changed a rule, and most of them have.
The part most tools will miss: your Amazon sales count here
Kentucky is a marketplace-inclusion state. Amazon, Etsy, eBay and Walmart collect and remit Kentucky sales tax on your behalf when a sale runs through them, and those sales still count toward the $100,000 that Kentucky measures you against in your own name.
This is the distinction that catches multi-channel sellers, and it survived the August 1 change untouched. HB 757 amends the standard for "remote retailers and marketplace providers" alike: it removed a transaction test, not a category of sales.
So there are two numbers for Kentucky, and you need both:
A seller doing $60,000 through Shopify and $55,000 through Amazon, all shipped to Kentucky:
| Amount | |
|---|---|
| Total shipped into Kentucky | $115,000 |
| Counts toward Kentucky's threshold | $115,000 |
| Kentucky's threshold | $100,000 |
| Result | Threshold met |
The Shopify admin shows $60,000. The threshold is $100,000. Everything looks fine, and it is not. Amazon already collected the tax on its half, which is exactly what makes this easy to miss: the tax got paid, so nothing looks wrong, and the sale still counts toward the threshold Kentucky measures you against.
In Kentucky those two numbers are the same, because Kentucky counts marketplace sales. That is precisely why the single number in your Shopify admin is the misleading one: $60,000 looks like 60 percent of the way to the line, and the real answer is that the line is already behind you.
The two numbers are not always equal, which is the reason to always look at both. Run the same seller against Florida, Arizona or Illinois, none of which count marketplace sales toward your own threshold, and they read $115,000 shipped into the state but only $60,000 counting, comfortably below the line and correctly so. Same business, same orders, opposite answer, and the only thing that changed is which state is asking.
There is no single number that is right in both places. "Sales into the state" is not it, and neither is "sales that count".
Kentucky's own website still shows the old rule
As of August 4, 2026, the Kentucky Department of Revenue's Sales and Use Tax page still describes the standard as requiring "remote retailers with 200 or more sales into the state or $100,000 or more in gross receipts from sales into the state to register and collect Kentucky sales and use tax", citing HB 487 and its July 1, 2018 effective date.
That guidance is three days out of date as we publish this. It is not a criticism of the department, which has a large site and a bill that changed a great many things at once. It is an illustration of why an economic nexus answer needs a date attached: the rule that governs your 2025 sales is not the rule on the page today, and the rule on the page today is not always the rule in force today.
Every rule StateWise uses carries the date we last verified it and a link to the source, and every verdict is evaluated against the rule that was in force during the period being measured.
What to check this week
- Add up your Kentucky sales across every channel, not just the one you can see most easily. Gross, not net. Do not subtract refunds; Kentucky measures gross.
- Check both calendar years. The window is previous or current, so 2025 and 2026 each get tested on their own.
- If you crossed under the old transaction test, find the date. It matters, and it is not answerable from today's rule.
- If you are between $80,000 and $100,000, you are in the range where one good quarter decides it, and the marketplace half of your sales is doing more of the work than you think.
Sources
- Kentucky HB 757, 2026 Regular Session (Acts Ch. 161), amending KRS 139.340. Enacted 2026-04-14 by veto override; nexus provision effective 2026-08-01.
https://apps.legislature.ky.gov/record/26rs/hb757.html - Kentucky Department of Revenue, Sales and Use Tax, quoted verbatim as observed 2026-08-04.
https://revenue.ky.gov/Business/Sales-Use-Tax/Pages/default.aspx - Threshold, window, basis and marketplace-inclusion values as verified 2026-07-31 and re-verified against the bill record 2026-08-03.
We show you the arithmetic and the rule behind it so you can have an informed conversation with someone qualified to give you advice. The not-tax-advice notice below is the full version and it is rendered on every page here, so no article can be published without it.