TAX & LICENSE / STATE TAX SYSTEM

KENTUCKY TAXES

State Income Tax
Kentucky imposes a tax on personal income, using the adjusted gross income reported on the federal income tax return minus allowable credits and deductions. The graduated tax rate falls between 2 and 6 percent, varying with filing status, income level, credits, and allowable deductions. A low-income tax credit is available to qualified taxpayers whose adjusted gross income falls beneath specified limits. For more information on the complete tax structure used by the Commonwealth of Kentucky or for answers to your specific questions, contact:

Kentucky Department of Revenue
Frankfort 502-564-4581
http://revenue.ky.gov

Louisville Taxpayer Service Center
620 South Third Street
Louisville 502-595-4512
http://revenue.ky.gov

Taxpayer Ombudsman
Frankfort 502-564-7822
https://revenue.ky.gov/Get-Help/Pages/Taxpayer-Ombudsman.aspx

 

Sales and Use Tax
Kentucky imposes a state sales and use tax of 6 percent on most retail items, with no local sales taxes. Some exemptions apply and include residential utilities, prescription medicines, and specific medical supplies. Use taxes are due on all items purchased outside of Kentucky like catalog or Internet orders where tax has not already been paid. Use tax payments can be filed at the time of each purchase or paid annually at income tax filing time.

 

Inheritance & Estate Tax
Inheritance taxes in Kentucky are based on the value of transferred property as well as the relationship of the beneficiary to the decedent. Estate taxes are based on the federal estate and gift tax guidelines. The estate tax is equal to the amount by which the credit for state death taxes exceeds the Kentucky inheritance tax.

 

Property Taxes
Property tax is levied on fair cash value of all real, tangible, or intangible property unless exempt. All locally taxed property is subject to county and school district taxes, and property inside city limits may also be subject to city property tax. Special local jurisdictions like fire protection, watershed, and sanitation districts often levy taxes in their operating areas. For more information or answers to questions, contact the property evaluation administrator in your county or the Kentucky Revenue Cabinet.

Kentucky Revenue Cabinet
502-564-4581
http://revenue.ky.gov

 

INDIANA TAXES

The state of Indiana relies on a number of taxes to generate revenue, including a personal income tax imposed at a rate of 3.4 percent on the federal adjusted gross income, minus any applicable credits and deductions. In addition to the state income tax, some counties impose either a county option tax or county income tax on residents and nonresidents whose principal place of employment is within the county. The county may also impose an economic development tax. Indiana also imposes a number of miscellaneous or special taxes. For complete information on taxes in Indiana, contact:

Indiana Department of Revenue
Indianapolis 317-233-4018
www.in.gov/dor

Clarksville District Revenue Office
1446 Horn Street
Clarksville 812-282-7729

Personal Income Tax
Information 317-232-2240
Fax Forms 317-233-2329
Forms by Phone 317-615-2581
www.in.gov/dor/3336.htm

Sales & Use Tax
The state imposes a 7.0 percent tax on retail sales, public utility services, and some renter transactions. Use taxes are due on all items purchased outside of Indiana like catalog or Internet orders where tax has not already been paid.

 

Estate & Inheritance Tax
Estate taxes are based on the difference between the state death tax credit allowed at the federal level and the amount paid in state inheritance tax. Inheritance tax is based on the relationship to the deceased, the property’s taxable value, and residency status.

 

Property Taxes
Property taxes in Indiana are collected by the local county treasurers and based on assessments that are provided by the township and county assessors. These assessments are based on guidelines adopted by the Indiana Department of Local Government Finance. For further information, contact your county and township assessors or the state agency:

Department of Local Government Finance
Indianapolis 317-232-3777
www.in.gov/dlgf