Starting in January, Kentuckians will begin paying less income tax. But to pay for that dip in state revenue, lawmakers tacked on dozens of expansions to the sales tax.
House Bill 8 passed earlier this year, dropping the state’s income tax from 5% to 4.5%. For a person who makes $60,000 salary, they currently give $3,000 in state income taxes. Under the new 4.5% rate, the same person would give $2,700.
But to offset that reduction, lawmakers incorporated 35 different new services into the state’s existing 6% sales tax.
Below is the full list of services that will now come with a 6% sales tax:
Photography and photo finishing
Marketing
Telemarketing
Public opinion and research polling
Lobbying
Executive employee recruitment
Website design and development
Website hosting
Facsimile transmission
Private mailroom
Bodyguard services
Security system monitoring
Private investigation services
Process server services
Repossession of personal property
Personal background check services
Parking services
Road and travel services
Condo time-share exchange services
Short-term rental of space
Social event planning and coordination
Leisure, recreational and athletic instructional services
Recreational camp tuition and fees
Personal fitness training
Massage (non-medical)
Cosmetic surgery
Body modification (piercing, tattoos)
Testing services
Interior decorating and design
Household moving
Specialized design (fashion)
Lapidary services
Labor and services for commercial refrigeration
Labor to repair or alter apparel, footwear, watches or jewelry
Prewritten computer software access services
Kentucky Governor Andy Beshear was critical of the impact of the sales tax increases, writing a two-page veto in April that was then overridden by the Republican supermajority.
Both tax changes go into effect January 1, 2023. For more detailed definitions of each category from the Kentucky Department of Revenue, here and here.
Source: WDRB
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