Tax & Incentives

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State & Local Taxes

A state sales tax is levied at the rate of 6% on the purchase or lease price of taxable goods and on utility services. Local sales taxes are not levied in Kentucky.

The Kentucky Constitution requires the state to tax all classes of taxable property, and state statutes allow local jurisdictions to tax only a few classes. All locally taxed property is subject to county taxes and school district taxes (either a county school district or an independent school district). Property located inside city limits may also be subject to city property taxes. Property assessments in Kentucky are at 100% fair cash value. Special local taxing jurisdictions (fire protection districts, watershed districts and sanitation districts) levy taxes within their operating areas (usually a small portion of the community or county).
Click here for general fact sheets on federal, state and local business and personal taxes.

State Property Tax Rates Per $100 Valuation, 2013

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Source: Kentucky Department of Revenue.

Selected Class of PropertyState RateLocal Taxation Permitted
Real Estate$0.1220Yes
Manufacturing Machinery$0.1500No
Pollution Control Equipment$0.1500No
Inventories:
Raw Materials$0.0500No
Goods in Process$0.0500No
Finished Goods$0.0500Yes
Goods-In-TransitExemptLimited
Motor Vehicles$0.4500Yes
Other Tangible Personal Property$0.4500Yes

Local Occupational License Taxes, 2017

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Source: Kentucky Revenue Cabinet.

Property Taxes Per $100 Valuation
Taxing JurisdictionReal EstateTangiblesMotor Vehicles
County
Allen$0.3919$0.3979$0.3187
City
Scottsville$0.2000$0.2000$0.2600
School District
Allen County Schools$0.5870$0.5870$0.5180

Local Occupational License Taxes, 2017

Cities, counties and school districts may levy an occupational license tax on the net profits of businesses and/or on the salaries and wages of employees earned in the jurisdiction. Rates can vary between the two types of occupational license taxes. Occupational license taxes may be levied on businesses as either a flat rate schedule or as a percentage of apportioned net profits or gross receipts. Where both the city and county levy an occupational license tax, a credit may be given, at the option of the local governments, for the amount paid to the city against the occupational license tax of the county. (Consult local jurisdictions for further details.)

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Source: Occupational Taxes Spreadsheet – Kentucky Secretary of State, Local Tax Listing – Kentucky Personnel Cabinet

Taxing JurisdictionTax Rate on Salaries/WagesTax Rate on Net Profits/Receipts
County
Allen1.00%1.00% (on net profits/gross receipts)
City
Scottsville1.50%1.50% (on net profits)
School District
Allen County SchoolsNo taxNo tax