Tax Reform

2024 Session tax updates

Last Updated: 4/16/2024

The General Assembly has agreed upon a final revenue proposal, House Bill 8, via a free conference committee. Below is a section-by-section summary of the revenue bill that has been sent to the Governor for signature as of 3/28/2024.

• Sections 1, 2, 3: updated extension to the petroleum storage tank accounts, pp 1-8.
• Section 4: will require KY DOR to submit an annual report on new tax law changes to the Interim Joint Committee on A&R by October 1 of each year. KY DOR already submits these reports to the Governor’s Administration, pp 8, 9.
• Sections 5, 6, 7, 8: pari-mutuel tax revenue distributions, pp 9-28.
• Section 9: technical correction regarding the excise tax administered by the Kentucky Horse Racing Commission, pp 28.
• Section 10: increases the de minimis threshold from $6,000 to $12,000 for the sale of tangible personal property outlined by specific statutory reference, pp 28-37.
• Section 11, 12, 13: new qualified broadband investment tax credit to support broadband development initiatives in Kentucky, pp 37-49.
• Section 14: Kentucky’s U.S. Internal Revenue Code (IRC) conformity update to 1/1/2024. The update retains the IRC Section 168(k) and 179 conformity exemptions. This is a KyCPA policy priority, pp 49-56. 
• Section 15: Exempts funds appropriated from the Budget Reserve Trust Fund account from the definition of “General Fund appropriations.” As a reminder, the individual income tax rate reduction provisions outlined by HB8 2022 Session reference General Fund appropriations when calculating whether the state Treasury meets those reduction requirements, pp 56-64.
• Section 16: delay of the combined group reporting deduction to 1/1/2026, pp 64-69.
• Section 17: coal severance tax refund, pp 69.
• Section 18, 19, 20: strikes definition of “hybrid vehicle” from Kentucky Revised Statute (KRS). Exemption of hybrid vehicles from the electric vehicle ownership fees, pp 69-85.
• Section 21: eliminates the $5 fee for personal identification cards for individuals without a permanent address, pp 85-89.
• Section 22, 23, 24, 25, 26, 27: HB122, KY DOR administrative writings transparency, pp 89-106.
• Section 28: “Bad debt” deductions related to rental cars, “charged off for income tax purposes,” pp 106-112.
• Section 29: SB129, tax increment financing (TIF) district relief from reduction in individual income tax rate delayed to 2026, pp 112-121.
• Section 30: child victims trust fund, Transportation Cabinet, special license plates pp 121-128.
• Section 31: ride sharing companies/services, amendments to definitions of gross receipts and license fees, pp 129-131.
• Section 32: updated extension to new tire fees, pp 131-134.
• Section 33, 34: HB101, SB105, SB121, exemption of currency and bullion from the sales and use tax, pp 134-159.
• Section 35: new statutory guidance regarding general powers of appointment, inheritance tax, pp 159-162.
• Section 36: corporate tax exemption for disaster response businesses extended to 1/1/2027, pp 162-165.
• Section 37, 38, 39, 40, 41, 42: new sections of KRS chapter 154, subchapter 20 regarding the KY Economic Development Finance Authority providing incentives for a qualified data center project, pp 165-183.
• Section 43, 44, 45, 46, 47: KY tax amnesty program extension into 2024, 2025, pp 183-194.
• Sections 48-61: non-codified budget language, pp 194-167.
• Section 62: analysis conducted by KY DOR and the Office of State Budget Director to consider sunsetting specific tax expenditures, analysis report to be reviewed by the Interim Joint Committee on Appropriations & Revenue, pp 197, 198.
• Sections 63-68: specific section effective dates, pp 198.

Other tax reform measures that passed during the 2024 Legislative Session include:

• House Bill 122: Supplemental revenue package including a sales and use tax exemption for electric vehicle charging stations with a charging capacity of less than 20 kilowatts, an updated property valuation administrator salary schedule, and including mains, pipes, pipelines, and conduits in the definition of "real property," effective 1/1/2024.  

State tax reform resources

The Kentucky General Assembly passed significant tax reforms during the 2022 and 2023 Legislative Sessions. The Kentucky Department of Revenue has administered regulatory guidance regarding the implementation of the new tax reform changes via their Tax Answers website. Any specific guidance administered by the Department will be posted on this website for ease of access.

Questions?

If you have specific questions, please email KyCPA Government Affairs Director, P. Anthony Allen at aallen@kycpa.org.