Missouri residents may soon pay a flat 4% state income tax, under a plan advanced by Republican lawmakers who want to eventually eliminate the tax. At the same time, the GOP proposal would give the General Assembly the power to impose sales taxes on an array of previously untaxed services – everything from massages to furnace maintenance.

Republican supermajorities in the Kentucky General Assembly are expected to begin the 2025 legislative session the same way they began the 2023 session with a popular bill that will cut the state income tax rate by one-half of 1 percentage point.

Kentucky’s Republican-dominated legislature has convened to start a 30-day session that's expected to include action to reduce the state’s individual income tax rate

The bill would lower Kentucky’s individual income tax rate from 4% to 3.5% in 2026, projected to lower state revenue by $718 million annually.