- Kentucky confirms that AI-powered features do not change the tax status of software; prewritten software, including AI-enabled SaaS, remains taxable.
- Software delivered electronically or accessed online via subscription is still taxable.
- AI functionality does not make prewritten software “custom” for tax purposes; only truly custom-built software with separately stated customization charges may qualify for different treatment.
- Businesses cannot claim AI features make their product a non-taxable professional service.
- SaaS and AI platform providers selling to Kentucky customers must continue to collect sales tax unless a specific exemption applies.
Source: taxcloud.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
Latest Posts in "United States"
- US Supreme Court refers US President Donald Trump’s broad import duties to the wastebasket
- California Beer Sales and Use Tax: Key Rules, Exemptions, and Guidance for Brewers and Distributors
- Touchless Compliance: How Agentic AI Is Revolutionizing Sales and Use Tax Automation
- Virginia Proposes 2027 Digital Sales Tax Expansion Impacting SaaS, Software, and Digital Services
- Arkansas Local Sales Tax Rate and Annexation Changes Effective April 1, 2026
