Fifteenth District State Representative Jason Petrie expects Kentucky will meet its next set of triggers this summer to lower the income tax rate by another half of a percent in 2026.
At the beginning of 2024, the tax rate dropped down to four percent because of triggers met in 2022. Representative Petrie, who created the formula that has to be met before lower rates can be approved, said a couple of things have happened in the state that allow for this to happen.
Petrie added they are monitoring the numbers regularly.
As the state budget continues to show improvement, Representative Petrie said the process has become a big deal, as the state was able to provide $3 billion to one-time projects in this latest cycle.
Petrie added as long as Kentucky keeps spending off its priority list, the tax reform can continue over the next several years. Since taking office in 2017, he said the business and tax climates have drastically changed and allowed for these changes.
There will be no income tax rate decrease in 2025, as the triggers weren’t met in 2023. Petrie represents all of Logan and Todd counties and a portion of Christian County, he also serves as the chairman of the House Appropriations and Revenue Committee.
