The Kentucky sales tax rate raised from 6% to 6.25% beginning of July 1, 2018. This implies that the increased sales tax rate applies to all taxable products, including goods and services. The rise was a component of a larger tax reform plan designed to stabilize the state’s pension system and boost funding for infrastructure and educational initiatives.
Despite appearing little at first, the increase can quickly pile up for both businesses and consumers. For instance, a $1,000 item now costs $1,025 due to the addition of $2.50 in sales tax. Low-income families who are already having a hard time making ends meet may find this increase to be very stressful.
In Kentucky, there are a number of product categories that are excluded from paying sales tax. These consist of groceries, utilities, and prescription medications. Additionally, some businesses, including government agencies and nonprofits, are excluded from paying sales tax.
Moving on, many Kentucky citizens have expressed dissatisfaction with the high cost of vehicle registration. Kentucky has some of the highest registration costs in the country, while the actual price depends on the kind and value of the car. This is because of a number of things, including the state’s high tax rate and Kentucky’s requirement that all automobiles pay both an annual property tax and a registration charge.
The state of Kentucky does not impose a particular tax on automobiles. However, when a car is purchased, the state does levy a usage tax. Depending on when the car was purchased, this tax, which is dependent on the purchase price of the vehicle, might range from 6% to 6.25%.
Conclusion: Despite the fact that Kentucky’s sales tax rate did rise in 2018, there are still a lot of exemptions in place to lessen the burden on consumers. Although vehicle registration fees are substantial, they are necessary to support significant infrastructure and service improvements in the state. And even while Kentucky does not have a separate car tax, citizens should be aware of the usage tax that is tacked on when buying a car.