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Taxes

Kentucky ranks 20th in the Tax Foundation’s State Business Tax Climate Index, which compares the states in five areas of taxation that impact business: corporate taxes, individual income taxes, sales taxes, unemployment insurance taxes, and taxes on property (residential and commercial).

Neighboring states are ranked as follows:

  • Indiana – 12th
  • Virginia – 15th
  • Missouri – 16th
  • Tennessee – 22nd
  • Illlinois – 30th
  • West Virginia – 37th
  • Ohio – 47th

Additional Tax Information

Kentucky’s personal income tax system consists of six brackets, with a top rate of 6% beginning at $75,000.

Kentucky’s corporate tax structure consists of three brackets, with a top rate of 6% beginning at $100,000. Among states levying corporate income taxes, Kentucky’s top rate is ranks 35th among the 50 states.

Tax structure

As reported by the Kentucky Department of Revenue, Kentucky’s personal income tax structure is as follows:

2% > $0
3% > $3,000
4% > $4,000
5% > $5,000
5.8% > $8,000
6% > $75,000

The available Taxes Download provides local occupational license taxes for the counties and cities within South Central Kentucky as reported by the Kentucky Society of Certified Public Accountants.


Corporate Franchise Tax

Kentucky does not impose a corporate franchise tax.


Corporate Income Tax

The following table provides a tax rate schedule for corporate income taxes in South Central Kentucky, as reported by the Kentucky Department of Revenue.

Taxable Net Income

Tax Rate
(Per Taxable Income Level)

$0 - $50,000

4.0%

$50,001 - $100,000

5.0%

$100,001+

6.0%

Corporations must also pay the Limited Liability Entity Tax, which is the lesser of 0.095% of gross receipts or 0.75% of gross profits. The tax phases are in between $3 million and $6 million of gross receipts or profits, with a minimum tax of $175.


Sales and Use Tax

The Kentucky Sales and Use Tax is imposed at the rate of 6% of gross receipts or purchase price. There are no local sales and use taxes in Kentucky.


Real Property Tax

The following information provides the median tax rate and range by district for real property taxes in Kentucky.

  • Median Tax Rate $0.8705 per $100 Valuation (2007)
  • Range by Taxing Districts $0.5355 - $1.1055 per $100 Valuation (2007)


Unemployment Insurance

The following information provides data about unemployment insurance tax rates in Kentucky.

  • New Employer Rate 2.7%
  • Minimum Earned Tax Rate 0.30%
  • Maximum Earned Tax Rate 9.00%
  • Taxable Wage Base $8,000
  • $8,000 is the maximum taxable amount.