FRANKFORT, Ky. — Kentucky Governor Andy Beshear has vetoed a bill that would have reduced the state's personal income tax rate and extended the sales tax to more services.
Under House Bill 8, the state's 5% individual income tax rate would have been lowered incrementally over a period of years until it is eliminated.
The first reduction would have been on Jan. 1, 2023, when the rate would drop to 4%. If a certain amount of revenue was brought in that year, the individual income tax rate would have gone down by another 0.5%.
HB 8 would have eventually reduced the personal income tax rate to zero, as long as certain trigger points were met.
The percentage-point drop would have saved taxpayers an estimated $1 billion and would have created additional sales taxes on services like ridesharing apps, rental services like Airbnb, and advertising services.
Democrats who opposed the bill said the bill would have benefited wealthier Kentuckians.
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