State & Local Taxes  
  A state sales tax is levied at the rate of 6% on the purchase or lease price of taxable goods and on utility services. Local sales taxes are not levied in Kentucky.

The Kentucky Constitution requires the state to tax all classes of taxable property, and state statutes allow local jurisdictions to tax only a few classes. All locally taxed property is subject to county taxes and school district taxes (either a county school district or an independent school district). Property located inside city limits may also be subject to city property taxes. Property assessments in Kentucky are at 100% fair cash value. Special local taxing jurisdictions (fire protection districts, watershed districts and sanitation districts) levy taxes within their operating areas (usually a small portion of the community or county).

Click here for general fact sheets on federal, state and local business and personal taxes.

 
     
  State Property Tax Rates Per $100 Valuation, 2013  
  Selected Class of Property State Rate Local Taxation
Permitted
 
  Real Estate $0.1220 Yes  
  Manufacturing Machinery $0.1500 No  
  Pollution Control Equipment $0.1500 No  
  Inventories:  
      Raw Materials $0.0500 No  
      Goods in Process $0.0500 No  
      Finished Goods $0.0500 Yes  
      Goods-In-Transit Exempt Limited  
  Motor Vehicles $0.4500 Yes  
  Other Tangible Personal Property $0.4500 Yes  
  Source: Kentucky Department of Revenue.  

 

  Local Property Tax Rates Per $100 Valuation, 2016  
  Taxing Jurisdiction Property Taxes
Per $100 Valuation
   
  Real Estate Tangibles Motor Vehicles  
  County  
  Calloway $0.2400 $0.2270 $0.2010    
  Fulton $0.3631 $0.3301 $0.2483    
  Graves $0.2060 $0.2634 $0.1910    
  Hickman $0.2447 $0.2110 $0.1792    
  Marshall $0.3242 $0.3295 $0.2690    
  McCracken $0.2169 $0.2589 $0.2179    
  City  
  Clinton $0.2700 $0.2640 $0.2640    
  Fulton $0.2650 $0.2650 $0.2800    
  Mayfield $0.2900 $0.2900 $0.3400    
  Murray $0.4260 $0.4260 $0.3800    
  Paducah $0.2550 $0.3900 $0.3900    
  School District  
  Calloway County Schools $0.4340 $0.4340 $0.5210    
  Fulton County Schools $0.5120 $0.5120 $0.5570    
  Fulton Independent Schools $0.7540 $0.7540 $0.7800    
  Graves County Schools $0.4230 $0.4230 $0.4640    
  Hickman County Schools $0.5510 $0.5540 $0.5470    
  Marshall County Schools $0.4740 $0.4740 $0.4560    
  Mayfield Independent Schools $0.7210 $0.7210 $0.6890    
  McCracken County Schools $0.5160 $0.5160 $0.5290    
  Murray Independent Schools $0.6380 $0.6380 $0.5440    
  Paducah Independent Schools $0.7990 $0.7990 $0.5660    
  Source: Kentucky Revenue Cabinet.  
  Local Occupational License Taxes, 2016  
  Cities, counties and school districts may levy an occupational license tax on the net profits of businesses and/or on the salaries and wages of employees earned in the jurisdiction. Rates can vary between the two types of occupational license taxes. Occupational license taxes may be levied on businesses as either a flat rate schedule or as a percentage of apportioned net profits or gross receipts. Where both the city and county levy an occupational license tax, a credit may be given, at the option of the local governments, for the amount paid to the city against the occupational license tax of the county. (Consult local jurisdictions for further details.)  
  Taxing Jurisdiction   Tax Rate on
Salaries/Wages
  Tax Rate on
Net Profits/Receipts
 
  County  
  Calloway   No tax   No tax  
  Fulton   No tax   2.00% (on gross receipts)  
  Graves   1.00%   No tax  
  Hickman   1.25% (Max tax $750; tiered taxable wages.)   No tax  
  Marshall   1.00% (School tax .50)   1.00% (on net profits)  
  McCracken   1.00%   1.00% (on net profits)  
  City  
  Clinton   0.50% (Tiered taxable wages)   0.50% (on gross receipts)  
  Fulton   2.00%   2.00% (on gross receipts)  
  Mayfield   2.00% (Tiered taxable wages)   2.00% (on net profits less than $50K; 1% $50K-$500K; 1/2% over $500K)  
  Murray   No tax   No tax  
  Paducah   2.00%   on gross receipts. Varies based on business type.  
  School District  
  Calloway County Schools   No tax   No tax  
  Fulton County Schools   No tax   No tax  
  Fulton Independent Schools   No tax   No tax  
  Graves County Schools   No tax   No tax  
  Hickman County Schools   No tax   No tax  
  Marshall County Schools   0.05% (on net profits)   0.05% (on net profits)  
  Mayfield Independent Schools   No tax   No tax  
  McCracken County Schools   No tax   No tax  
  Murray Independent Schools   No tax   No tax  
  Paducah Independent Schools   No tax   No tax  
  Source: Occupational Taxes Spreadsheet - Kentucky Secretary of State, Local Tax Listing - Kentucky Personnel Cabinet   
  Incentives  
  Source: Kentucky Cabinet for Economic Development.