LOUISVILLE, Ky. — Kentuckians will see a cut in their state income tax next year.  

The drop is triggered by legislation passed earlier this year. 

Under House Bill 8, certain revenue benchmarks trigger a reduction in state income tax.

According to the Department of Revenue, reduction conditions outlined in the bill have been met, and Kentucky’s income tax rate will go down from 5 percent to 4.5 percent for the taxable year beginning on Jan. 1, 2023.

Republicans have said the change will encourage people to move to Kentucky. 

“Our population is flat, for the most part,” said Rep. Ken Fleming (R-Louisville). “In order to increase the population, which will drive more revenues, we need to go and look at what’s most important, and that is your personal income tax.”

Republicans say their goal is to eliminate income tax completely. 

“I think no matter where you are on the spectrum of income, you’re going to be benefitting,” said Fleming. “We’re in an inflationary period... and every penny, every dollar we can save, that we give back into the people, to reimburse back the people, that’s a good thing, no matter how small or how large it is.”

The legislation also creates new taxes on certain goods and services, such as electric vehicles and ride-sharing services like Uber.

Rep. Al Gentry (D-Louisville) and other Democrats voted against the measure. 

He said it shifts the brunt of the tax burden from higher earners to lower earners. 

“The Republican majority leadership wants to move in the direction of all sales tax and property tax instead of income tax,” said Gentry. “What that does is it benefits the higher earners and it’s more of a burden on the lesser earners, when you look at the amount of taxes they have to pay as a ratio to the income that they make.”

Gov. Andy Beshear vetoed House Bill 8, but lawmakers with a Republican supermajority overrode the veto.