March 9, 2023 10:00am
Revenue bill passes KY House
On Wednesday, a revenue bill containing clarifications and fixes to Kentucky’s tax code passed the House. Sponsored by Appropriations & Revenue Chair Jason Petrie (R-Elkton), House Bill 360 includes clean-up from last year’s sweeping tax reform legislation, House Bill 8, and GLI priorities regarding the state and local tax (SALT) parity issue and updating Kentucky’s internal revenue code conformity date.
Many of the changes are clarifications requested by the Kentucky Department of Revenue and the Kentucky Finance and Administration Cabinet.
Other key changes include:
- Exempts marketing services as subject to state sales tax. According to Rep. Petrie, this was to keep marketing services in line with advertising services, which were already listed as exempt in last year’s sweeping tax reform legislation, House Bill 8.
- Allows business owners to deduct a greater share of their state and local taxes (SALT) from federal income tax liability, which can lead to a lower federal tax liability for business owners.
- Exempts contracts for construction projects facilitated by a water district for publicly owned utilities from sales tax.
- Updates internal revenue code conformity which benefits Kentucky taxpayers and tax practitioners.
The changes in HB 360 were introduced through a committee substitute in the House Appropriations & Revenue earlier this week. The legislation now moves to the Senate where further changes are expected.