Republican leaders of the Kentucky legislature have unveiled a surprise overhaul of the state’s tax code on one of the last days of this year’s legislative session.
The proposal is moving quickly toward final passage in the legislature and would be the first major change to the state’s tax code in nearly two decades.
The bill establishes a flat income tax rate of 5 percent—currently Kentuckians are taxed at rates ranging from 2 percent to 6 percent, depending on income.
It expands the state’s 6 percent sales tax to 17 services like car repairs, landscaping, pet grooming, dry cleaning and country club memberships.
It would also raise the per-pack tax on cigarettes by 50 cents to $1.10.
Republican leaders estimate the plan would net about $490 million in new revenue for the 2019 fiscal year.
This is the last day the legislature can pass bills and be able to override any vetoes Gov. Matt Bevin.
