Taxes
The favorable business climate in Kentucky provides businesses with distinct operational advantages. The lower property, corporate and state taxes create a positive and profitable business environment for both national and international companies.
The nature of Kentucky’s business taxes revolves around the state government collecting a larger share of the total taxes. Cities and counties have limited taxing authority, with property taxes stabilized.
For detailed tax rates for each County and/or City, go to Local Taxes.
Kentucky Business Taxes
The major characteristics of business taxes in Kentucky are:
- State government collects a larger share of the total taxes,
- Cities and counties have limited taxing authority, and
- Property taxes are stabilized over time.
The Kentucky Revenue Cabinet oversees the administration of taxes in Kentucky. Visit the Cabinet’s web site http://www.revenue.ky.gov/ for a list of publications available explaining the Kentucky system of business taxes.
Property
The basis of assessment for property (real and personal) taxes in Kentucky is 100% of fair cash (market) value as of January 1. The property valuation administrator (PVA), a locally elected state officer, assesses most classes of taxable property for the state, county, city, and other special districts generally once every four years.
Corporate Income
Kentucky and foreign corporations owning or leasing property OR having one or more paid employees in Kentucky pay an income tax on taxable net income. The maximum rate is 7%; the minimum rate is 4%. Corporations pay Kentucky income tax on that portion of business income earned in Kentucky as determined by the state's apportionment formula — the UDITPA formula with adjustments.
Sales and Use
A state sales and use tax of 6% is levied on taxable goods and utility services at final sale and on tangible personal property leased/rented in Kentucky. Major exemptions (industrial machinery; industrial tools, supplies, and raw materials; pollution control equipment; energy exceeding 3% of production costs; etc.) are available to business and industry. Local sales taxes are not levied in Kentucky.
Other State Taxes
Other state taxes that are applicable to business include:
- Corporation License (Franchise) Tax
- Motor fuel & highway use taxes
- Unemployment insurance tax (all employers)
- Taxes limited to specific types of businesses
Local Taxes
Property
Local taxing jurisdictions in Kentucky include:
- • Counties
- • Cities
- • School districts
- • Special taxing districts
These jurisdictions conform to state law on assessments and valuations. Local tax rates are set annually.
Occupational License
Kentucky statutes allow counties, cities, and school districts to levy occupational license taxes on businesses and self-employed individuals..
Utility Taxes for Schools
Northern Kentucky school districts levy a utilities tax at a rate not to exceed 3%.
Other Local Taxes
Cities and counties may assess other taxes and fees for fire protection, waste collection, auto stickers, business licenses and other special purposes.
Boone County Tax Rates (Unincorporated)
The following information provides a breakdown of the major classes of property subject to ad valorem taxes in the Commonwealth of Kentucky and County of Boone.
Tax rates are expressed in dollars and cents per $1,000 of assessed value for calendar year 2006, payable by December 31, 2006.
Boone County and Cities within the County
Campbell County
The following information provides a breakdown of the major classes of property subject to ad valorem taxes in the Commonwealth of Kentucky and County of Campbell.
Tax rates are expressed in dollars and cents per $1,000 of assessed value for calendar year 2006, payable by December 31, 2006.
Campbell County and Cities within the County
Kenton County
The following information provides a breakdown of the major classes of property subject to ad valorem taxes in the Commonwealth of Kentucky and County of Kenton.
Tax rates are expressed in dollars and cents per $1,000 of assessed value for calendar year 2006, payable by December 31, 2006.
Kenton County and Cities within the County |