LOUISVILLE, Ky. — Jay Smith is known as the computer guy by his friends and family. “When I was a kid, I saw War Games. I went home and tried to hack into my school on a Commodore 64 just like he did,” said Smith. 

What You Need To Know

  • A 2022 Kentucky legislation subjects over 30 services to a 6% sales tax 

  • Some of those services include parking, photography and vehicle rental

  • The tax went into effect on Jan. 1, 2023. 

Smith has been working with computers since serving in the Army as an engineer and working in the transportation industry. But it was only a year ago when he started his digital marketing and web development business, Root of Pi. 

Smith says in a way, digital marketing is like the irrational number Pi. “There are limits to what we can do, but there’s a vast universe of possibilities within those limits,” said Smith. 

Smith says he was surprised to learn that he was not required to tax his clients for services when he started his business. 

A 2022 Kentucky legislation in House Bill 8 has changed that, and you may have to spend more for services including photography, parking, and private investigations. As of Jan. 1, 2023, over 30 services are subject to a 6% tax, including website design and development services. 

“I’d much rather increase my rates by 6% and keep that money, but taxes are a part of life and it’s something completely out of my control, so yeah, it was a little bit of a bite,” said Smith. 

Smith has increased his prices for new clients, but he’s absorbing those for existing ones. 

“Because I know how tough it is for small business owners, particularly when they’re looking at their books, and they’re trying to determine where they can save more money or where they need to spend their money. When it comes to marketing, that’s often times one of the first things people think that they can do without,” explained Smith. 

Smith is not against taxes as they support things like infrastructure and education. “Taxes are what they are,” he said. “If you’re ultra rich, or you’re in the right crowd, you can figure out a way not to pay them, but for small business owners, it’s just one of those things that we have to work with.”

Like pi, that list is infinitely long. 

Smith works closely with students in Louisville. He hopes to expand his business and hire creative people straight out of high school.

You can find a list of all the services subject to the new state tax here. 

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