FRANKFORT, Ky. — A bill that seeks to lower the state income tax cleared its first hurdle toward becoming law Thursday.

House Bill 1 passed 90-7 and now heads to the State Senate for action. It would drop the income tax from 4% to 3.5% in 2026 should it become law. 

What You Need To Know

  • House Bill 1 passed with a 90-7 vote

  • It seeks to lower the state income tax to 3.5%

  • This would take effect in 2026

  • The State Senate will likely vote on the bill in early February

“You have reduced, we have reduced income taxes on the average Kentucky taxpayer over $1,500," said Majority Whip Jason Nemes, R-Louisville, of the continued tax cuts passed by the legislature. "That is a mighty good thing." 

Kentucky Republicans said they intend to continue incrementally lowering the income tax to 0%, which has concerned some Democrats. But despite hesitation on the issue, 13 of the House’s 20 Democrats voted in favor of the tax cut.

“I vote 'yes' today with a heavy heart and with uncertainty of what this leads to the future, but I’m doing it to help the people I was sent here to represent,” said State Rep. Adrielle Camuel, D-Lexington.

“There are so many people out here doing great work for us, and we today are trying to do great work for them, but that involves a plan for the future,” said Minority Whip Lindsey Burke, D-Louisville. “And while this is good for today, we need a good plan for tomorrow.”

The state must meet certain economic triggers each year for the tax rate to be dropped. 

The State Senate must now act on House Bill 1. It would then head to the desk of Gov. Andy Beshear, D-Ky., for action. Beshear has indicated he supports the half-percent drop. 

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