Much like the business climate, from a tax perspective the Tax Foundation ranks Kentucky in the upper middle group of states – scoring a 19 corporate tax, individual income tax, sales tax, unemployment tax and property tax.
Below are brief descriptions of some significant taxes affecting Kentucky Business.
Corporate Income Tax
For companies meeting a “doing business” standard in the Kentucky the corporate rate is:
Individual income tax
For individual tax in the KY I-71 Region:
Local Occupational tax
Cities, counties and school districts may levy taxes on businesses net profits. The tax may be a flat rate or based on percentages of net profits or gross receipts.
Employers are also responsible for withholding occupational licenses taxes on employee gross wages in communities that have assessed a tax.
Kentucky sales tax
Kentucky’s sales tax rate is six percent. The state does not have local sales taxes. There are several exemptions to the state sale tax that are applicable to business and industry.
- Machinery for new and expanded industry.
- Raw materials, industrial supplies, and industrial tools.
- Items purchased for resale.
- Certified pollution control equipment.
- Containers, packaging, and wrapping materials.
- Energy and energy producing fuels, to the extent that they exceed 3 percent of the cost of production.
- Industrial supplies and tools used to perform a manufacturing process on another entity's property.
Kentucky’s new employers’ rate is 2.7 % on the first $8,000 in wages. Unemployment Tax rates are set annually determined by the statutory table of rates. Individual company rates are determined by its reserve account balance ratio.
Carroll County Community Development Corporation
511 Highland Ave.
PO Box 334
Carrollton, Kentucky 41008 | USA
Shelby Miles, MPA
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