Tool | Updated October 2018

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

Mixed Tax Picture

Kentucky changed its tax structure substantially in 2018, moving to a 5% flat tax (to which localities can add). Deductions for health insurance premiums, long-term care insurance coverage, and medical expenses were eliminated. More items are now subject to the state's 6% sales tax, too, including club fees, pet care services, and landscaping services.

However, the Bluegrass State still prevents localities from adding to that sales tax, and and the property tax burden is light.

Sales Tax

State levy of 6%.

Income Tax Range

Kentucky has a flat income tax rate of 5%. Localities can add to this; the average levy is 2.08%, according to the Tax Foundation.

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 $126,100 is $1,078.

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

Cigarettes: $1.10 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
Beer: $0.85 per gallon
Wine: $3.47 per gallon
Liquor: $7.86 per gallon

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

10.92%

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%.

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