Kentucky farmers who use an Agricultural Tax Exemption (AE) number to make qualifying farm purchases exempt from Kentucky sales tax will need to renew their exemption before the end of the 2026 calendar year. The Kentucky Department of Revenue (KDOR) has begun the first major renewal cycle for the AE number program as all current active AE numbers are scheduled to expire on December 31, 2026. Renewed exemption numbers will generally be valid for four years.
For many Kentucky agricultural producers, claiming the sales tax exemption on qualifying farm purchases has long been a routine part of doing business. However, legislation enacted in 2020 changed the process producers use to document their eligibility for the exemption. Under Kentucky Revised Statute (KRS) 139.481, qualifying producers must now obtain an Agriculture Exemption (AE) number from the Kentucky Department of Revenue and provide that number when making exempt purchases. The AE number replaced the previous practice of using a driver’s license number as the identifying number on agricultural exemption certificates.
Importantly, the underlying agricultural sales tax exemptions have not changed as a result of the current ...