In only the third week of the 2023 legislative session, House Bill 1 has been signed into law.
House Bill 1, sponsored by Rep. Brandon Reed, carries out another reduction in Kentucky’s income tax, initiated by legislation passed in the 2022 session that put the state on a path to eliminate the individual income tax.
The first reduction, moving the individual income tax from 5 percent to 4.5 percent, took effect on January 1, 2023. And now, House Bill 1 will codify this and reduce the tax by another 0.5 percent to 4 percent, effective January 1, 2024.
In a video message Friday morning, Gov. Beshear noted record-high inflation and the need to help Kentuckians by putting more money back in their pockets. He said January 2023 saw continued growth in income tax revenue despite the recent reductions, giving him confidence in the state’s ability to lower the individual income tax rate further.
After the bill’s passage by both legislative chambers, the Kentucky Chamber of Commerce sent a letter to the governor signed by Chamber board members and local chambers of commerce across the state calling for the bill to be signed into law.
“On behalf of Kentucky businesses, I would like to thank sponsor Rep. Reed and the General Assembly for passing House Bill 1 and Governor Beshear for signing this important law. House Bill 1 signifies a new economic path for the Commonwealth and positions Kentucky to continue competing for jobs, workers, and opportunities. As the top Kentucky Chamber priority, responsibly lowering the state’s income tax will help position the Commonwealth to aggressively compete for jobs, workers, and opportunity for all while leaving more money in our hardworking Kentuckians’ paychecks,” Kentucky Chamber President and CEO Ashli Watts said Friday.
Click here for more Kentucky business news.