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Bill

HB 729

AN ACT proposing to create a new section of the Constitution of Kentucky relating to the exemption of state and local excise, sales, and use taxes from food, food ingredients, prescription drugs, and residential and on-farm utilities.

2025 Regular Session

Kentucky constitutional amendment would exempt food, medications, and residential utilities from state/local sales taxes, reducing revenue but lowering costs for essential items.

to Elections, Const. Amendments & Intergovernmental Affairs (H)
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Bill Summary · HB 729

Legislative bill overview

HB 729 proposes a constitutional amendment in Kentucky that would exempt food, food ingredients, prescription drugs, and residential and on-farm utilities from state and local excise, sales, and use taxes. This requires passage by the legislature and voter approval to amend the state constitution. The bill is currently in committee review.

Why is this important

Tax exemptions on these essential items would reduce costs for households, particularly affecting low-income families who spend proportionally more income on food, utilities, and medications. However, it would also reduce state and local government revenue that currently funds schools, infrastructure, and public services, necessitating either budget cuts or alternative revenue sources.

Potential points of contention

  • Revenue impact: Removing sales tax from essential goods could significantly reduce state and local tax revenues; estimates of fiscal impact are critical to evaluate
  • Inequality concerns: While intended to help lower-income households, exemptions benefit all purchasers equally regardless of income, raising questions about tax policy efficiency
  • Implementation complexity: Defining "food ingredients" versus taxable items, and distinguishing residential from commercial utilities, could create ambiguity and administrative challenges
  • Constitutional precedent: This locks tax policy into the constitution rather than allowing legislative flexibility to adjust based on economic conditions

Compiled from official sources — confirm details with the bill’s official record.

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