FRANKFORT, Ky. (LEX 18) — Gov. Andy Beshear has announced a proposal to provide relief on vehicle property taxes as well as a temporary 1% drop in Kentucky sales tax.
Governor Beshear has taken the podium at the Capitol. He’s addressing inflation, which he says “is a temporary problem, but reaching a 40-year high” @LEX18News pic.twitter.com/RmPMPQhoEC— Conroy Delouche (@ConroyDelouche) February 16, 2022
Under the proposal, Kentuckians will see tax relief of about $1.2 billion, of which $873 million is directly related to sales tax savings and $340 million is from the reduction in vehicle property taxes.
This follows votes and discussion in the House and Senate, each led by Republicans, to address the recent increase in vehicle taxes for all Kentuckians. The House previously passed House Bill 6, and last week, the Senate passedJoint Resolution 99 which demanded the governor lower car taxes.
On Wednesday, the governor signed an executive order that will stop an increase in vehicle property taxes, which rose by nearly 40% in the state since last year.
Signing executive order now, with Rep. Angie Hatton behind him. These cuts will be effective for 2 years, and go into effect immediately @LEX18News pic.twitter.com/mB9mIUhfHK— Conroy Delouche (@ConroyDelouche) February 16, 2022
In addition to the vehicle property tax relief, Gov. Beshear announced Rep. Angie Hatton will file a bill that would temporarily lower the state's sales tax temporarily from 6% to 5% during the next fiscal year – from July 1, 2022, through June 30, 2023.
Under Kentucky state law, only the Kentucky General Assembly can exempt all, or any portion of the property tax applied to motor vehicles. But for the first time, last week, in a Senate Joint Resolution the Kentucky Senate stated that I have the authority to make this change.— Governor Andy Beshear (@GovAndyBeshear) February 16, 2022
Gov. Beshear says the sales tax proposal would decrease costs by more than 16%, as the U.S. inflation rate currently is 7.5%.
This historic sales tax cut will help families until the high U.S. annual inflation rate retreats, which experts predict will fall back to around the 2% range by the end of 2022 and through 2023.— Governor Andy Beshear (@GovAndyBeshear) February 16, 2022
Rep. Hatton represents Kentucky's 94th House district, which includes Letcher County and part of Pike County. She says the sales tax cut proposal is something that would help bring relief for all Kentuckians.
"These moves would benefit all of us, but there is no doubt they are desperately needed in regions like mine in Eastern Kentucky, which has had to do more with less for so long that there’s just not any more to give," said Hatton.
The GOP controls both the House and the Senate with supermajorities. Leaders have indicated they are prioritizing tax code reform this year, and have told reporters they are looking to lower the income tax for Kentuckians.