Taxation in Kentucky

Updated on Friday 17th August 2018

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If you have decided on business in Kentucky, it is recommended to have an idea about the taxation system in the American state. For instance, the corporate income tax is imposed in three different brackets, depending on the registered taxable income. Our company formation agents in USA are here to provide you with information about how to open a company in USA, including in Kentucky. Also, tax advice and management can be provided on request.

What is the sales tax in Kentucky?

The sales tax in Kentucky is set at 6% rate and it is applicable for products and services offered for sale purposes in this state.  It is good to know that municipalities in Kentucky impose no city sales tax. Depending on the type of purchase in Kentucky, the tax rate may change, meaning that a lodgings tax, consumer use or a rental tax is applicable.

What is the corporate income tax in Kentucky?

Corporations in Kentucky are subject to specific income tax rates, depending on the taxable net income, as follows in the table below:
Taxable Income Tax Rates
Between 0$ and $50,000 4%
Between $50,000 and $100,000 5%
More than $100,000 6%

Please feel free to ask for information and talk to our USA company incorporation specialists about how to start a business in USA and about the tax regimes in each American state. Also, we invite you to read the general guide to company incorporation in Kentucky for information about how business is done in this state.

What is the limited liability entity tax in Kentucky?

The limited liability entity tax in Kentucky (LLET) is applicable for LLCs, S corporations, limited partnerships, limited liability partnerships and it is based on the annual gross receipts of a business in this state. As an example, to companies with gross receipts of less than $3 million, a minimum LLET of $175 applies. In the case of companies with gross incomes of more than $3 million, LLET is beyond 9.5 cents/$100.

Taxes for LLCs in Kentucky

As it is known, limited liability companies are considered pass-through entities for which LLET is imposed. This tax applies to each individual that forms the LLC and particularly on the income registered in the company.

Please do not hesitate to contact our team of company incorporation consultants in USA and ask for extra details about the USA company formation and the taxes involved for each type of business.