Kentucky Gov. Beshear’s “Blue Ribbon Commission on Taxation” is due to deliver a finalized report of its recommendations for updating the state tax code. The Commission has held 14 hearings during the year, which included testimony from business leaders, tax experts, and other citizens. The Governor has acknowledged that passing a comprehensive tax reform within the given time is unlikely, and a special session will probably be required. The expected resistance is expected in part because revenue bills can only be passed with a 3/5 affirmative vote from both legislative chambers.
A few of the major recommendations that have been released are:
- Increasing the state cigarette tax by $0.40;
- Adopting single sales factor apportionment for corporate income taxes;
- Expanding the state’s related party expense addback statute to include management fees;
- Reducing the retirement income exemption; and
- Creating an earned income tax credit.