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Will Your Business Be Affected by Kentucky Revenue Bill Tax Reforms?
House Bill (HB) 8 has moved to the Kentucky Senate after being passed by the House of Representatives last week. This legislation seeks to transition Kentucky from its reliance on the current income tax-based model to a consumption-based model, gradually decreasing the income tax over the next several years. To replace the income tax revenue, HB 8 expands Kentucky’s 6% sales tax to a wider variety of services provided to consumers by Kentucky businesses.
The General Assembly believes that these reforms will make Kentucky’s tax climate more competitive to attract and retain residents and businesses for a more robust economy in the Commonwealth.
The list of services enumerated in HB 8 is extensive, running the gamut of industries from tourism to finance and beyond. Notable additions in HB 8 to services taxed at 6% include:
- Ridesharing services, taxi services, and electric usage by electric cars and scooters
- Parking services including valet and parking lots or structures
- Marketing, telemarketing, and polling services
- Lobbying services
- Website design, development, and hosting
- Personal financial planning and personal investment management
- Travel arrangement and reservation services
- Rental of space for meetings, conventions, weddings, and other short-term social events
Businesses with annual sales of less than $6,000 are excluded. HB 8 also provides for tax amnesty from October 1, 2022 through November 29, 2022.
HB 8 was assigned to the Senate Appropriations and Revenue Committee on Tuesday, March 8. To learn more about how HB 8 may affect your business, contact McBrayer today.
Kenton L. Ball is Of Counsel with McBrayer law in the Lexington office. Mr. Ball focuses his practice areas to taxation, tax compliance, tax controversy, tax planning, transaction tax, and corporate & business tax law. He can be reached at kball@mcbrayerfirm.com or (859) 231-8780, ext. 1222.
Anne-Tyler Morgan is a Member of McBrayer law. Her law practice primarily focuses on healthcare and pharmacy law; regulatory and administrative law; government and nonprofit institutions and associations; and politics, elections, and campaign finance. Ms. Morgan can be reached at atmorgan@mcbrayerfirm.com or (859) 231-8780, ext. 1207.
Services may be performed by others.
This article does not constitute legal advice.
