A proposal to cut Kentucky’s personal state income tax has passed the first hurdle.
The House Appropriations and Revenue Committee gave approval to the legislation, which would cut the state tax another one-half percent.
Committee Chairman Representative Jason Petrie said the tax rate would drop to 3.5-percent on net income on January 1st of 2026.
Jason Bailey, the executive director of the Kentucky Center for Economic Policy, opposed the legislation.
Bailey said the initial legislation provided a tax cut of half-percent per year when Kentucky received a large infusion of federal money.
If approved, Bailey said the new tax cut would cost the state another $718 million dollars.
Added with the two previous approved tax cuts, Bailey said Kentucky would be losing $2.2 billion dollars per year.
The bill passed 17-0 and now heads to the House floor.
