House bill

House Bill 8, Income Tax Bill, Kentucky House Pass

As long as certain triggers are met, the bill would eventually reduce the personal income tax rate to zero.

FRANKFORT, Ky. — A bill that would lower Kentucky’s personal income tax rate and extend the sales tax to more services has passed the House.

House Bill 8 cleared the House on a 67-23 vote after a lengthy debate on Friday. Under the bill, the state’s 5% personal income tax rate would be lowered gradually over a period of years until it is eliminated.

The first reduction would be on January 1, 2023, when the rate would fall to 4%. If a certain amount of income is reported that year, it will decrease by another 0.5%.

As long as certain triggers are met, the bill would eventually reduce the personal income tax rate to zero.

The one percentage point cut would save taxpayers about $1 billion.

To maintain tax balance, the bill would add sales tax to a number of services such as ride-sharing apps, rental services like Airbnb, and advertising services.

On Friday, lawmakers discussed including an electric vehicle tax in the bill. Proponents of its addition said taxing electric vehicles would make it equivalent to the current gasoline tax.

“Stop the old thought process – tax it, spend it,” GOP Rep. Jason Petrie said. “We’ve had a good 100-year history here. And our numbers and our results are not at all attractive.

Democrats opposed to the measure said it would disproportionately benefit wealthier Kentuckians and could starve the state of the revenue needed to properly fund schools and other essential services.

“I don’t think the math adds up,” said Democratic Rep. Rachel Roberts. “And I also think it’s regressive. I think it hurts the poor in our state. I think it helps the rich in our state.”

Now that the bill has passed the House, it will be sent to the Senate committee xxx. HB 8 will have to pass the entire Senate before going to Governor Andy Beshear’s office for his signature.

The Associated Press contributed to this article.

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