Tax Insight

Kentucky expands sales and use tax to data brokering services, makes additional changes

Insight
5 minute read
June 15, 2026

What happened?

Kentucky HB 757, enacted on April 14, 2026, adopts several sales and use tax changes. Of particular interest, the bill defines “data brokering services” and adds this activity to the list of enumerated services subject to sales and use tax. Additional changes were also adopted.

Beginning August 1, 2026, the bill makes the following changes:

Defines "data brokering services" and adds data brokering services to the list of enumerated services subject to sales and use tax
Revises marketplace provider and remote retailer economic nexus rules to remove the 200-transaction threshold for registration and collection requirements
Amends definition of “communication services” to include separately stated charges for pay telephone (previously excluded)
Defines “educational or charitable institution” and expands the definition of “religious institutions” and provides sales and use tax exemptions for sales and purchases.

In addition, effective upon enactment, HB 757:

Provides a sales tax incentive for certain professional sporting event qualifying attractions for events held on or after July 1, 2026 (expires November 30, 2036)
Extends the motion picture refundable credit program application window through June 30, 2030
Extends the $2 fee on sales of new tires for transactions occurring prior to July 1, 2034
Addresses penny rounding rules, clarifying that cash transactions should be rounded to the nearest five cent increment once the total amount due, including tax and other fees, is determined.

Why is it relevant?

The statutory definition of "data brokering services" is broad and could extend beyond entities traditionally viewed as data brokers. Companies that collect, aggregate, and analyze personal data for sale to third parties, even incidentally to their primary business, should evaluate whether their activities fall within the scope of the new tax. Many of these changes go into effect on August 1, 2026.

Actions to consider

Companies should consider the following actions:

Review whether services are included in the new definition of "data brokering services," identify affected revenue streams or purchase activity, and make appropriate system changes to implement.
Inventory contracts that may include data brokering services to determine whether any qualify for the transition exclusion.
Evaluate whether any of the other changes occurring as a result of HB 757 impact your business.