Taxes

Delivering for businesses and investing in the future.

Kentucky has enacted widespread reforms to tax code policy in recent years, improving the state’s position ranking in the Tax Foundation’s 2024 State Business Tax Climate Index to 18th, up from 33rd in 2018. In 2022, the state introduced a framework to reduce and eventually eliminate the personal income tax rate, now at 3.5% for 2026 with additional triggers in place to reduce further. Other reforms in recent years include the repeal of the corporate license tax and the intangible property tax, as well as a reduction in the corporate income tax rate from 8.25% to the current 5%. In 2023, the state created a pass-through entity tax and credit that will reduce federal tax liability for businesses. See more information for Kentucky tax rates and collections.