Tool | August 2016

State-by-State Guide to Taxes

Compare state tax rates and rules -- on income, ordinary purchases, gas, "sin" products, property, and more -- across the U.S.

Kentucky

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The Bottom Line
Map of Kentucky

Tax-Friendly

Property taxes are modest, income taxes top out at 6% (and that rate is levied only on taxable income above $75,000), and beer is lightly taxed in The Bluegrass State.

Sales Tax

State levy of 6%. No local taxes.

Income Tax Range

Low: 2% (on less than $3,000 of taxable income)

High: 6% (on more than $75,000 of taxable income)

See Kiplinger.com’s Retiree Tax Map to learn how Kentucky taxes Social Security income and other forms of retirement income.

Motor Fuel Taxes

Gasoline: $0.26 per gallon.
Diesel: $0.23 per gallon.

Property Taxes

The median property tax on Kentucky's median home value of $123,800 is $1,054.

See Kiplinger.com’s Retiree Tax Map for details on tax breaks for seniors in Kentucky.

Vehicle Taxes

A 6% tax is collected at registration. Additionally, the state vehicle property tax rate is $0.45 per $100 of car value; counties and other localities impose an additional levy.

Sin Taxes

Beer: $0.84 per gallon
Wine: $3.330 per gallon
Liquor: $7.54 per gallon


Cigarettes: $0.60 per pack
Snuff: $0.19 per unit of 1.5 ounces
Chewing tobacco: Approximately $0.04 per ounce
Other tobacco products: 15% of wholesale price

Travel Taxes

Hotel: In addition to the statewide lodging tax of 1% (campgrounds are excluded), municipalities can levy additional taxes, and sales tax is also due. In Lexington, Ky., this adds up to 13.4%.

Rental cars: 6% "U Drive It" tax. Sales tax is not due.

Taxes On Wireless Service

10.5%

Inheritance and Estate Taxes

Kentucky has an inheritance tax, but all Class A beneficiaries (spouse, parent, child, grandchild, brother and sister) are exempt. Other beneficiaries are subject to inheritance tax rates ranging from 4% to 16%. There is no estate tax.

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