Taxes in Kentucky

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 rank?  Below, we have highlighted a number of tax rates, ranks, and measures detailing Kentucky’s income tax, business tax, sales tax, and property tax systems. Click the tabs below to explore!

Top Individual Income Tax Rate

6.0%

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State and Local Individual Income Tax Collections per Capita

$1215

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State and Local Tax Burden

9.5%

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Tax Freedom Day

April 11

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Top Corporate Income Tax Rate

6%

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State Business Tax Climate Index Ranking

33

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State Sales Tax Rate

6.00%

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Combined State and Average Local Sales Tax Rate

6.00%

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State and Local General Sales Tax Collections per Capita

$738

State Gasoline Tax Rate (cents per gallon)

26.00¢

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State Cigarette Tax Rate (dollars per 20-pack)

$0.60

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Property Taxes Paid as a Percentage of Owner-Occupied Housing Value

0.80%

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State and Local Property Tax Collections Per Capita

$781


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State Tax Changes Taking Effect July 1, 2018

June 26, 2018

Kentucky Legislature Overrides Governor’s Veto to Pass Tax Reform Package

April 16, 2018

Updated Kentucky Tax Reform Package Would Boost State from 33rd to 18th on the State Business Tax Climate Index (Updated)

April 2, 2018

Kentucky Needs Tax Reform, Not Cigarette Tax Hikes

February 28, 2018

Lunch Links: Republican Plan Upcoming for Sales Tax on Internet Buys; Walmart Avoids Excessive Tax Proposed by Puerto Rico; Explaining Why States Should Index Tax Brackets for Inflation

August 25, 2016

Lunch Links: Trump Takes Hits from Clinton (Release Tax Returns) and Forbes (Troublesome Pass-Through Rate Reduction); NCSL Calls on Congress for Marijuana Reforms

August 11, 2016

Lunch Links: Puerto Rico Bill This Week; David Allen Coe Sentenced; Noah’s Ark Tax Credits

June 28, 2016

Lunch Links: States Could Raise $5 Billion from Marijuana Taxes, Colorado Universal Health Care, Popular Governors

May 13, 2016

Lunch Links: Kentucky Gives Tax Credits to Film About Cheerleaders and Serial Killers, IRS Reverses on Telephone Audits

May 10, 2016

10 Remaining States Provide Tax Filing Guidance to Same-Sex Married Taxpayers

March 20, 2015

Kentucky Considers Tax Rebate for Creationist Theme Park

July 29, 2014

Taxes on Kentucky Derby Winnings Could be up to 47.6 Percent

May 7, 2014

Kentucky Approves Slight Tax Changes

April 16, 2014

Kentucky Tax Plan Fails to Improve Bluegrass State’s Tax Competitiveness

March 7, 2014

A Response to Kentucky Gov. Steve Beshear’s State of the Commonwealth Address

January 8, 2014

Kentucky Publishes Magnitude of Newly Approved Business Incentives

December 17, 2013

Kentucky Tax Reform Commission Offers Disappointing Grab Bag

December 27, 2012

Kentucky’s State and Local Tax Burden

October 23, 2012

Tax Policy Podcast: Prof. John Garen on Kentucky’s Blue Ribbon Reforms

March 16, 2012

Kentucky Providing Tax Rebate to Fund Creationist Theme Park

June 1, 2011