How to Start a Cleaning Business in Kentucky (2026)

Last updated: February 25, 2026

Starting a cleaning business in Kentucky is straightforward from a licensing standpoint – there is no state trade license required for residential or commercial cleaning services. However, Kentucky has one critical tax compliance requirement that trips up many cleaning business owners: all cleaning and janitorial services are subject to Kentucky’s 6% sales tax, effective since July 1, 2018. You must register for a sales tax permit, collect 6% from every client, and remit it to the Department of Revenue. Beyond that, the biggest practical requirements are local occupational license registration and the right insurance and bonding.

Cleaning Service Requirements in Kentucky at a Glance

Requirement	Agency	Cost	Timeline
LLC Formation (recommended)	Kentucky Secretary of State	$40	2-5 business days
Annual Report (LLC)	Kentucky Secretary of State	$15/year	Due June 30
Sales Tax Permit Registration	Kentucky Dept. of Revenue	Free	5-7 business days
Limited Liability Entity Tax (LLET)	Kentucky Dept. of Revenue	$175/year minimum	Annual with tax return
Local Occupational License	City/County Fiscal Court	Varies by jurisdiction	Before operating
Janitorial/Fidelity Bond (recommended)	Private surety companies	$150-$300/year typical	Immediate
General Liability Insurance	Private insurers	$500-$1,500/year typical	Immediate
Workers’ Compensation (if any employees)	Private insurers	Varies by payroll	Required at first hire

How to Start a Cleaning Business in Kentucky (Step by Step)

Step 1: Form Your Business Entity

Operate as a sole proprietor or, ideally, form an LLC for liability protection. Kentucky LLC formation costs just $40 through the FastTrack online portal. Your LLC name must include “LLC” or “Limited Liability Company.” After formation, apply for your federal EIN from the IRS for free at IRS.gov.

If operating under a trade name (e.g., “Bluegrass Clean” as your business name), file a Certificate of Assumed Name with the Secretary of State for $20.

Step 2: Register for Kentucky Sales Tax (Critical)

This step is non-negotiable. Kentucky law requires you to collect 6% sales tax on all cleaning and janitorial services. This includes:

Residential house cleaning
Commercial office cleaning
Carpet and upholstery cleaning
Window cleaning
Pressure washing of real property

Register for a sales tax permit through MyTaxes.ky.gov or Kentucky Business One Stop. Registration is free and your permit does not expire. You will file monthly returns online – Kentucky mandates electronic filing for sales tax. The rate is a uniform 6% with no local additions anywhere in the state.

Important supply cost note: Cleaning supplies and chemicals you purchase for use in providing your service are NOT eligible for a resale exemption – your supplier will charge you sales tax on those purchases. This is different from some other states.

Step 3: Register the LLET with the Department of Revenue

As a Kentucky LLC, you owe the Limited Liability Entity Tax (LLET) annually. For businesses with under $3 million in gross receipts, this is a flat $175 per year. File it with your Kentucky income tax return using Schedule L-C. This is separate from your $15 annual report to the Secretary of State.

Step 4: Register for the Local Occupational License Tax

Most Kentucky cities and counties require businesses operating within their limits to register and pay a local occupational license tax. This applies to both your business net profits and employee payroll. Contact your city hall or county fiscal court before you start operating:

Louisville/Jefferson County: 2.2% on payroll (residents), 1.45% (non-residents); separate net profits return
Lexington/Fayette County: Quarterly estimated net profits tax; contact Metro Revenue
Other cities/counties: 0.5%-2.5% on net profits and/or payroll

Step 5: Get a Janitorial Fidelity Bond

While Kentucky does not require a bond by law, a janitorial fidelity bond (also called a dishonesty bond or cleaning business bond) is a standard industry requirement. It protects your clients against theft by you or your employees. Most commercial clients and property managers will require proof of bonding before hiring you. A $10,000 bond typically costs $150-$300 per year through surety providers.

Step 6: Get General Liability Insurance

General liability insurance is not legally required by the state but is practically essential. It covers property damage and bodily injury claims – for example, if an employee breaks a client’s valuable item or slips and falls while cleaning. Carry at least $1 million per occurrence / $2 million aggregate. Cleaning business GL policies typically cost $500-$1,500 per year depending on revenue and number of employees.

Step 7: Get Workers’ Compensation If You Hire Anyone

Kentucky requires workers’ compensation from your very first employee – no minimum threshold. Purchase a policy through a private insurance carrier before bringing anyone on. The Kentucky Department of Workers’ Claims can fine you up to $1,000 per employee per day without coverage and can force you to stop operations.

Cost to Start a Cleaning Business in Kentucky

Item	Cost	Notes
LLC Formation	$40	One-time; Secretary of State
Annual Report	$15/year	Recurring; due June 30
LLET (annual)	$175/year	Minimum; Dept. of Revenue
Sales Tax Registration	Free	No fee; register at MyTaxes.ky.gov
Janitorial Fidelity Bond	$150-$300/year	Recommended; $10,000-$25,000 coverage
General Liability Insurance	$500-$1,500/year	$1M/$2M coverage recommended
Equipment & Supplies (startup)	$500-$3,000	Vacuums, mops, cleaning products, cart
Local Occupational License	Varies	Contact your city/county; often $50-$200/year

Estimated total startup cost: $1,400-$5,300+ (not including workers’ comp or vehicle costs)

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Frequently Asked Questions

Do I need a license to start a cleaning business in Kentucky?

No state trade license is required specifically for cleaning services in Kentucky. However, you must: (1) register your business entity with the Secretary of State, (2) obtain a sales tax permit from the Department of Revenue, and (3) register for the local occupational license tax with your city or county. Some commercial clients may also require you to be bonded and insured before they will hire you.

Do cleaning services in Kentucky have to charge sales tax?

Yes. All cleaning and janitorial services in Kentucky are subject to the 6% state sales tax, effective July 1, 2018. This includes residential cleaning, commercial cleaning, carpet cleaning, window cleaning, and pressure washing. You must register for a sales tax permit, collect 6% from clients, and remit it to the Kentucky Department of Revenue. The rate is uniform statewide with no local additions.

What bond does a cleaning business need in Kentucky?

Kentucky does not legally require a specific bond for cleaning businesses, but a janitorial fidelity bond (dishonesty bond) is the industry standard. It protects your clients against employee theft. Most commercial clients and property management companies will require proof of bonding. A $10,000 fidelity bond typically costs $150-$300 per year.

When does workers’ comp become required for a cleaning company in Kentucky?

Workers’ compensation coverage is required as soon as you hire any employee – even just one part-time worker. Kentucky has no minimum employee threshold. You must purchase a policy through a private insurance carrier before your first hire. Non-compliance penalties can reach $1,000 per employee per day.

What is the local occupational tax and does my cleaning business owe it?

Most Kentucky cities and counties levy a local occupational license tax on business net profits and employee payroll earned within that jurisdiction. If you clean homes or offices in Louisville, Lexington, or most other Kentucky cities, you must register with that city or county and file a local net profits return. Rates typically range from 0.5% to 2.5%. Contact your local city hall or county fiscal court to find your specific rate.

Can I run a cleaning business from home in Kentucky?

Yes, home-based cleaning businesses are common and permitted in Kentucky. You will need to check your local zoning rules for any home occupation permit requirements, and still must comply with all state and local tax registration requirements. Your clients’ locations drive the tax and permit obligations – not your home office location.

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About the Author

Robert Smith has run a licensed private investigation firm for 8 years from the Florida-Georgia state line - where he learned firsthand how wildly business licensing rules differ between states just miles apart. He personally researched requirements across all 50 states and D.C., reviewing hundreds of government sources over hundreds of hours to build guides he wished existed when he started. Not a lawyer or accountant - just a business owner who has done the research so you don't have to.

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