Business Taxes

One of Kentucky’s many advantages is its competitive tax climate. According to the Tax Foundation’s 2011 State Business Tax Climate Index, Kentucky’s tax climate improved more than any other state over the past two years jumping 15 spots to #19. A summary of state and federal business taxes can be found in the additional resources section below.

The Kentucky Business One Stop website also offers an in-depth overview of taxes – federal, state and local – required of businesses operating in the Commonwealth, including:

  • Federal Tax Registration Requirements - In addition to obtaining an EIN, the federal tax identification number for a business, it is important for business owners to understand federal tax obligations. The Internal Revenue Service (IRS) has a number of useful online resources to help in this area.
  • State Tax Registration Requirements - By completing the multi-use Kentucky Tax Registration Application with the Department of Revenue, your business will automatically enroll for the most common business taxes.
  • Special State Tax Registration Requirements – Depending on the product or service your business provides, there may be other state taxes that apply to your business. Most of these require that you file a special application/registration with the Department of Revenue.
  • Local Requirements - You should also check with each city/county government where you intend to transact business or have a business presence. Many cities and counties require a local business license and/or impose an occupational tax or other type of tax on individuals and firms conducting business within their jurisdiction.

Additional Resources

 

Kentucky Cabinet for Economic Development   Old Capitol Annex  300 West Broadway   Frankfort, KY 40601
502-564-7140 (local)   800-626-2930 (toll free)