Dozens of new services now have a 6% sales tax in Kentucky | Politics

Dozens of new services now have a 6% sales tax in Kentucky |  Politics
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LOUISVILLE, Ky. (WDRB) — Starting Sunday, Kentuckians will see sales tax on more than three dozen new goods and services.

While residents will pay less income tax in 2023, many things are now included in the current 6% sales tax to make up for this loss in government revenue.

house bill 8 passed earlier this year and lowered the state’s income tax from 5% to 4.5%. For a person earning a salary of $60,000, they currently pay $3,000 in state income tax. According to the new 4.5% rate, the same person would pay $2,700.

Lawmakers then decided to include dozens of different new services in the state’s current 6% sales tax. Some of these now taxed industries include ridesharings like Uber or Lyft, parking services, recreational sports, rental space for weddings, and more.

Below is the full list of services that will now come with a 6% sales tax:

  1. Photo and photo finishing
  2. Marketing
  3. telemarketing
  4. Public opinion and research survey
  5. lobbying
  6. administrative staff recruitment
  7. Website design and development
  8. website hosting
  9. fax transmission
  10. private mail room
  11. Protection services
  12. Security system monitoring
  13. Private investigation services
  14. Process server services
  15. Recovery of personal property
  16. Personal background check services
  17. parking services
  18. Road and travel services
  19. Apartment timeshare exchange services
  20. Short term rental
  21. Social event planning and coordination
  22. Leisure, recreational and athletic teaching services
  23. Rest camp training and fees
  24. Personal fitness training
  25. Massage (non-medical)
  26. Cosmetic Surgery
  27. Body modification (piercing, tattoos)
  28. testing services
  29. interior decoration and design
  30. moving house
  31. Special design (fashion)
  32. Lapidary services
  33. Labor and services for commercial refrigeration
  34. Labor to repair or replace clothing, shoes, watches or jewelry
  35. Pre-written computer software access services

Find more detailed definitions of each category from the Kentucky Department of Revenue, the game and the game.

Senate Budget Chair Chris McDaniel said he understood there was a lot to digest, but the sales tax expansion was designed to help lower Kentucky’s income taxes.

“It’s not a dramatic increase in sales tax,” said McDaniel, a Republican. “We tax consumption, not production. And when Kentuckians make money, we think these individual people are the best people to decide how they spend that money. (People) can choose how they want themselves. Rather than having someone living hundreds of miles in Frankfort decide how to spend that money Spend that money.”

However, he admits that it will not fully compensate for the loss.

“Ultimately, we’ve put a lot of effort into making sure this doesn’t blow a big hole in the state budget, and there are multiple layers of checks and balances to make sure it doesn’t do that up front,” he said.

Meanwhile, the Kentucky Center for Economic Policy is sounding the alarm.

“For the most part, what’s happening here is a big hole in the budget,” said Jason Bailey, executive director of the Kentucky Center for Economic Policy.

Bailey said the tax change hurt the poor and helped the rich.

“It’s really skewed to the very, very rich, and part of the problem is that these revenues are going to our schools, our healthcare system, our infrastructure and other needs,” he said.

But McDaniel disagrees.

“Most of their income is spent in tax-exempt and tax-exempt areas, and those same people, you know, have more money in their pockets,” McDaniel said. “So it’s just an absolute straw man discussion.”

At the same time, there are still unanswered questions about some of the nuances in the law, especially about use taxes for non-primary housing.

“Confusion about how to play has always been a problem,” said Kyle Noltemeyer, a Kentucky host. “No one can be completely sure and then they find out and they have to go back, so yeah, it’s a mess of things.”

The tax will relate to water, gas and electricity for additional properties such as rental units or apartments you can rent. It starts in January. 1 but there is some exemptions.

“The intent is that if it’s a place where you live, you won’t be taxed for those utilities,” the representative said. “R-D33,” Jason Nemes said.

When WDRB News requested an interview with the state Revenue Department earlier this month about the changes, we were directed to: frequently asked questions page then to the deputies who wrote the tax change.

McDaniel said he hopes Kentuckians will adapt to the changes, although it will take several pay cycles.

“The average Kentuckian will see nothing of this change except that they have a few more dollars in their pocket each week to choose how they spend it,” he said.

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