Skip to content

Taxes In Kentucky

Kentucky Tax Rates, Collections, and Burdens

How does Kentucky’s tax code compare? Kentucky has a flat 4.50 percent individual income tax rate. There are also jurisdictions that collect local income taxes. Kentucky has a 5.00 percent corporate income tax rate. Kentucky has a 6.00 percent state sales tax rate and does not levy any local sales taxes. Kentucky’s tax system ranks 18th overall on our 2023 State Business Tax Climate Index.

Each state’s tax code is a multifaceted system with many moving parts, and Kentucky is no exception. The first step towards understanding Kentucky’s tax code is knowing the basics. How does Kentucky collect tax revenue? Click the tabs below to learn more! You can also explore our state tax maps, which are compiled from our annual publication, Facts & Figures: How Does Your State Compare?

See Related Articles

Tax Data by State

Get facts about taxes in your state and around the U.S.

Explore Data

State Tax Data

Individual Taxes

Top Individual Income Tax Rate
4.50%See Full Study
State Local Individual Income Tax Collections per Capita
$1156Rank: 31
State and Local Tax Burden
9.9%Rank: 26See Full Study

Business Taxes

Top Corporate Income Tax Rate
5%See Full Study
State Business Tax Climate Index Ranking
18See Full Study

Sales Taxes

State Sales Tax Rate
6.00%Rank: 17See Full Study
Combined State and Average Local Sales Tax Rate
6.00%Rank: 38See Full Study
State and Local General Sales Tax Collections per Capita
$931Rank: 39
State Gasoline Tax Rate (cents per gallon)
26.00¢Rank: 34
State Cigarette Tax Rate (dollars per 20-pack)
$1.10Rank: 36

Property Taxes

Property Taxes Paid as a Percentage of Owner-Occupied Housing Value
0.83%Rank: 31
State and Local Property Tax Collections Per Capita
$33Rank: 50

All Related Articles

Total tax burden by state 2022 state and local tax burdens (2022 state and local taxes)

State and Local Tax Burdens, Calendar Year 2022

Tax burdens rose across the country as pandemic-era economic changes caused taxable income, activities, and property values to rise faster than net national product. Tax burdens in 2020, 2021, and 2022 are all higher than in any other year since 1978.

24 min read
state wealth tax proposals state flat tax state income tax reform state tobacco taxes, state cigarette tax rates and cigarette taxes state tax incentives 2021 state revenue and 2021 state budget projections state tax reform covid and state tax cuts covid

State Legislatures Take Up Tax Reform and Relief in 2022

After a whirlwind of cuts and reforms in 2021, it looks like 2022 might be an even bigger year for state tax codes. Republican and Democratic governors alike used their annual State of the State addresses to call for tax reform, and there is already serious momentum from state lawmakers nationwide to get the job done.

3 min read
2022 Kentucky budget tax reform proposals 2022 Kentucky tax reform plan Kentucky legislature, Kentucky tax on vapor products, Kentucky tax reform

Will Kentucky Build Upon Its 2018 Reforms This Year?

As Kentucky policymakers make final decisions on tax relief this year, they should make the most of this opportunity to return excess tax collections in a manner that would also enhance the Bluegrass State’s prospects for long-term economic growth.

5 min read
Federal Menthol Cigarette Ban Will Cost States Millions. State Cigarette Revenue Impact Due to Federal Cigarette Ban

Federal Menthol Cigarette Ban May Cost Governments $6.6 Billion

The FDA’s expected announcement of a national ban on menthol-flavored cigarettes and cigars with a characterizing flavor would carry significant revenue implications for both the federal government and state governments, with likely limited benefits in smoking cessation.

6 min read