Kentucky Discusses Application of Sales Tax to Services

Jan 27th, 2010

Kentucky's legislature is in dialogue over imposing a sales tax on all services performed in the state. While it appears unlikely at this time, consideration of imposing sales tax on services would place Kentucky with a very few states that generally tax services (four at present; Hawaii, New Mexico, South Dakota, and West Virginia).

As states' continue to face budget shortfalls, we have seen a significant increase in dialogue, proposed legislation, and "voter approved" bills to increase tax rates and expand the scope of transactions subject to sales tax.