Kentucky Business Compliance Checklist
Kentucky has one of the lowest LLC formation fees ($40) and a flat 4.0% income tax. This page covers everything from filing fees to sales tax to hiring laws.
$40
$15
Every year
6%
state base rate
No
1. Entity Formation
| LLC filing fee (Articles of Organization) | $40 |
| Corp filing fee (Articles of Incorporation) | $55 |
| Registered agent required | Yes — must have a physical address in the state |
| Publication requirement | No |
| Processing time | ~7 business days (expedited available for extra fee) |
2. Annual Maintenance
| Annual/periodic report | Every year — fee $15 |
| Franchise tax | None |
3. Sales Tax
| State base rate | 6% |
| Combined rate range (with local) | 6% – 6% |
| Economic nexus (out-of-state seller) | $100,000 OR 200 transactions per year |
| Marketplace facilitator law | Yes — marketplaces (Amazon, Etsy) collect on your behalf. |
Need to check nexus across multiple states? Use our Sales Tax Nexus Checker.
4. Employer Requirements
| Minimum wage | $7.25/hr (2025) |
| Paid sick leave law | None (federal only) |
| Non-compete enforceability | Enforceable — reasonable scope and duration required |
| Contractor classification test | Common-law (IRS) test |
Full employment law breakdown: Kentucky Hiring Laws.
5. Workers' Compensation
Kentucky allows private-market workers' comp insurance (competitive market). Coverage is required starting with your first employee.
Estimate your premium with our Workers' Comp Calculator.
6. State Income Tax
Flat rate: 4% on all income.
Compliance by Business Structure
Pick your structure to see structure-specific compliance items.
What Makes Kentucky Distinctive
Compliance quirks and rules that separate Kentucky from other states — worth understanding before you file.
- Kentucky LLC formation is only $40 — one of the cheapest in the U.S.
- Kentucky's annual report is $15, due June 30.
- Kentucky's Secretary of State online system (sos.ky.gov) offers same-day filing acceptance.
This is a reference, not legal advice.
State fees and rules change. Verify current values with the Kentucky Secretary of State, Department of Revenue, and Department of Labor before filing. For complex situations, consult a licensed CPA or attorney.