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Local Taxes
Payroll Tax
Total of 2.75%: 2.25% of wages, salaries and commissions earned in Fayette County; and an additional 0.5% for all Fayette County residents and businesses, which goes to the public schools.
Personal Property Taxes
Motor vehicles, truck trailers and campers are liable for ad valorem ("items of value") property tax, to be assessed January 1 of each year. These taxes are collected upon renewal of registration in the county clerk's office.
Also, an intangible tax of $.25 per $100 of value is assessed annually on some personal investments which can include some bonds and certain loans/other receivables.
Utilities Tax
3% of the cost of telephone, electric, water and natural gas services; paid with utility bill (for schools & local government).
Real Estate Property Taxes
All property must be assessed at 100% of fair cash value on January 1 of each year, unless specifically exempted by the Kentucky Constitution.
The first $28,000 of homestead value owned by persons 65 and older (and totally disabled persons) is exempt from property taxes if the property is their residence. Property owners pay an ad valorem tax based on the services provided. The tax collected is distributed to the state and local governments and the public schools.
Sanitary sewers taxes are separate quarterly taxes with the amount determined by total water usage.
State Taxes
Kentucky Sales Tax
6% of retail sales price paid by the consumer. Exceptions include: motor fuels, grocer food, residential utilities (except telephone), prescription drugs, and some medical supplies.
Kentucky Individual Income Tax
Kentucky residents pay state income taxes based on thir federal adjusted gross income, with certain adjustments such as U.S. Government interest, and the first $35,000 of retirement income. Persons not domiciled in Kentucky but who live in Kentucky for more than 183 days during the tax year are considered residents. Persons moving into Kentucky must report income received from Kentucky sources prior to becoming residents and income received from all sources after becoming Kentucky residents. Federal income tax is not deductible. Rates are graduated based on income level.
Taxable Income:
Up to $3,000 - 2%
Next $1,000 or portion - 3%
Next $1,000 or portion - 4%
Next $3,000 or portion - 5%
All in excess of $8,000 - 6%
Kentucky state tax forms may be ordered from:
Property & Mail Services Section
Revenue Cabinet
Frankfort, KY, 40620
(502-564-3658)
Lexington Taxpayer Service Center
301 East Main Street
Lexington, KY, 40507
(859-246-2165)
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