More Taxation news More news in Kentucky Find Taxation lawyers in Kentucky
On March 13, 2026, Kentucky lawmakers introduced a new tax reform bill designed to increase state revenue and address budgetary concerns. The proposal, known as the Kentucky Tax Modernization Act, includes a number of changes to the state's tax code aimed at generating additional funds for much-needed investments in education, infrastructure, and healthcare.One of the key provisions of the bill is an increase in the state's sales tax rate from 6% to 7%, which is expected to generate an estimated $500 million in additional revenue annually. Supporters of the measure argue that raising the sales tax rate will help offset cuts to other taxes and ensure that all residents, regardless of income, contribute their fair share to state coffers.In addition to the sales tax increase, the bill also includes a proposal to extend the state sales tax to include certain services that are currently exempt, such as landscaping, dry cleaning, and personal training. This expansion is expected to generate an additional $200 million in revenue each year.Furthermore, the Kentucky Tax Modernization Act includes a provision to increase the cigarette tax by $1 per pack, bringing the total tax to $2.60 per pack. This increase is intended to not only generate revenue but also discourage smoking and promote public health.State lawmakers are hopeful that the proposed tax reforms will help address Kentucky's ongoing budget challenges and provide much-needed funding for essential services. However, the bill is likely to face opposition from some lawmakers and special interest groups who are wary of tax increases.The Kentucky Tax Modernization Act is currently being reviewed by the state legislature, and lawmakers are expected to hold hearings and debates on the proposal in the coming weeks. If approved, the bill could have far-reaching implications for the state's finances and the well-being of its residents. Stay tuned for further updates on this important legislation.