Kentucky House Approves Bill to Enable Incremental Income Tax Cuts

The Kentucky House passed House Bill 775, a comprehensive tax reform measure that allows more flexible reductions in the state’s income tax rate. Originally a four-page bill, it expanded to 107 pages and would enable lawmakers to reduce the income tax incrementally by as little as 0.1% and up to 0.5% per year based on state revenue conditions. The bill is a response to the 2022 law that restricted income tax reductions to half a percentage point under specific fiscal triggers. Supporters argue this flexibility will promote economic growth, while critics, mainly Democrats, have expressed concerns about the rapid changes and lack of public input. The bill, which covers various topics including tax incentives for tourism, now moves to the Senate for further consideration. If passed, it could significantly alter Kentucky's tax landscape.