Kentucky Taxes Overview
Kentucky has a 5% flat income tax rate. Certain counties and cities can levy an additional payroll tax on wages. The state gas tax is 26 cents per gallon, which includes a 1.4 cents per gallon tax for underground fuel storage.
Governor Beshear froze the state gas tax in June 2022, saving Kentuckians $35.4 million. However, the General Assembly failed to continue the freeze, resulting in a 2 cents per gallon increase on the gas tax.
Gas Tax Comparison Across States
The value of Kentucky’s gas tax has significantly decreased over time, with experts estimating it now has only half the buying power compared to 1968. Pennsylvania currently has the highest gas tax rate at 61 cents per gallon, while Alaska has the lowest at 15 cents per gallon. States with higher gas taxes generally experience higher gas prices overall.
Additional Tax Information
Kentucky’s diesel tax varies by supplier, and the state sales tax rate is 6%. Commercial vehicles over 60,000 pounds must obtain a KYU number before operating on Kentucky highways, with a 10-day KYU permit costing about $46.