200-transaction economic nexus test withdrawn 1 August 2026
Kentucky has simplified its sales tax registration rules for remote sellers by removing the 200-transaction economic nexus test. Since 1 August 2026, non-resident businesses only need to register and collect Kentucky sales tax once they exceed USD 100,000 in annual sales into the state. The number of individual sales is no longer relevant.
Check all US state sales tax thresholds.
Kentucky following most other sale tax states
The change, introduced under House Bill 757, brings Kentucky into line with the growing number of US states that have abandoned transaction-count thresholds in favour of a single sales value test. States have increasingly recognised that counting transactions creates unnecessary complexity, particularly for businesses selling large volumes of low-value goods online.
For many small and mid-sized ecommerce businesses, this is welcome news. A retailer making thousands of small-value sales into Kentucky may now avoid a registration obligation if its annual sales remain below USD 100,000. Equally, businesses already registered solely because they exceeded 200 transactions should review whether they remain obliged to be registered, subject to Kentucky’s deregistration rules and their wider US sales tax position.
The amendment also reflects a wider trend in US sales tax. Following the 2018 Wayfair decision, many states adopted both a revenue and transaction threshold. Over the past few years, however, legislators have steadily removed transaction-count tests after finding they imposed disproportionate compliance costs while generating relatively little additional tax revenue. Kentucky now joins states including Wisconsin, North Carolina, South Dakota and Louisiana in adopting a sales-only threshold.
