Kentucky Tax
Kentucky State Tax
Kentucky Income Tax
State taxes are one of the primary sources of state revenues. The state of Kentucky collects state taxes to help fund schools, projects, and local government operations. The main taxes collected in Kentucky are income tax, sales tax, and property tax.
Kentucky Income Tax
Individuals who live in, work in, or generate income sources in Kentucky are required to file state income tax returns. The State of Kentucky uses a progressive income tax bracketing system similar to the federal income tax structure. This 6-tiered structure imposes greater taxes as the income grows. For instance, taxable income up to $3000 is levied with 2% income tax while incomes over$75000 are levied with 6% income tax. The Kentucky tax code doubles bracket widths for married couples who are filing joint income tax returns.
Corporations that generate Kentucky-sourced income must pay corporate income tax too. The Kentucky corporate income tax is three-tiered; the first $5000 of the taxable gross income is charged 4%, the next $5000 with 5%, and anything over $100,000 is taxed 6%.
Kentucky Sales Tax
Kentucky collects 6% of gross receipts from sales transactions in the state- except purchases of groceries and prescription drugs. It is one of the few states that do not have special sales tax jurisdictions and surtaxes. Alcohol, cigarettes, and gasoline are subject to higher excise tax.
Kentucky Property Tax
The state of Kentucky collects 0.72% of the fair market value of all real and tangible properties such as homes, lands, vehicles, and inventories in the state. It has the 8th lowest property tax rates of all states.
