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Gov. Beshear announces $1.2 billion proposal to provide vehicle property tax, sales tax relief

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Posted at 1:00 PM, Feb 16, 2022
and last updated 2022-02-16 17:31:40-05

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.

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 passed Joint 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.

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.

Gov. Beshear says the sales tax proposal would decrease costs by more than 16%, as the U.S. inflation rate currently is 7.5%.

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.