# Kentucky HB 775: AN ACT relating to fiscal matters. Kentucky HB 775, AN ACT relating to fiscal matters., is a 2025 Regular Session House bill sponsored by Jason Nemes (Republican); status became law, last action 2025-03-27 (became law without Governor's Signature (Acts Ch. 98)); PRIA reads it as touching household money (as of 2026-10-17). - Canonical: https://policyrisk.com/state-bill/KY-HB775-2025RS - As of: 2026-10-17 - Plain-text twin of the page above; the HTML and this file carry the same facts. ## Facts - Bill: Kentucky HB 775 - State: Kentucky - Session: 2025 Regular Session - Title: AN ACT relating to fiscal matters. - Status: became law - Chamber: House - Introduced: 2025-02-19 - Last action: 2025-03-27, became law without Governor's Signature (Acts Ch. 98) - Sponsor: Jason Nemes (Republican) - Cosponsors: 0 - Subjects: Economic Development, State Agencies, Cities, First Class, Counties with Cities of the First Class - Touches household money: yes - Roll calls: 2 (99 yes, 23 no in all) - Economic provisions PRIA read: 29 ## Summary No summary available. ## Bill overview: provisions PRIA read - Farm sellers get capped tax credits: benefit, high. Farm sellers can claim approved credits up to $25,000 yearly and $100,000 lifetime for sales to actively engaged, non-beginning farmers. Sales to beginning farmers have higher caps: $50,000 yearly and $200,000 lifetime. Credits cannot exceed the approved amount or tax owed, cannot be transferred, a… - More farm sales qualify for credits: benefit, high. The Selling Farmer Tax Credit no longer excludes buyers who previously owned farmland used for farming for more than 10 years. Buyers must still be Kentucky residents with required licenses, registrations, and experience. They cannot already own the assets being purchased. Applications can be revie… - Lower income taxes for Kentucky households: benefit, medium. Kentucky’s individual income tax rate falls from 4% in 2024 and 2025 to 3.5% for tax years beginning January 1, 2026. Savings depend on Kentucky net income. Beginning with 2027 tax years, further cuts require annual revenue and reserve-fund tests and approval by the General Assembly. - Licensed businesses can ship hemp drinks: benefit, medium. Type B direct shipper license holders can ship cannabis-infused drinks to Kentucky consumers. Eligible applicants include Public Health-licensed manufacturers and qualifying manufacturers or suppliers authorized in their home state. Manufacturers can ship only brands they own or exclusively license… - Beer buyers receive brewer tax credits: benefit, medium. The 50% malt beverage tax credit flows through to distributors or retailers buying directly from an in-state brewer. The credit covers no more than 300,000 barrels per year. This is a business tax benefit, not a required price cut for consumers. - Microbreweries gain private selection options: benefit, low. A microbrewery holding a quota retail drink or package license can include a barrel-selected bottle in a private selection package. The bottle must come from barrels the microbrewery selected during a private selection event. - Gaming regulator faces limits on authority: benefit, low. Beginning July 1, 2025, the gaming corporation cannot regulate horse sales or require breeders to hold licenses as breeders. It cannot control matters within an entity's exclusive national authority under federal law. It also cannot restrict or ban games or charitable gaming activities in use in Ke… - New state regulator oversees racing and gaming: benefit, low. The independent Kentucky Horse Racing and Gaming Corporation oversees live racing, pari-mutuel and sports wagering, and horse-breed integrity and development. It took the Horse Racing Commission's duties, staff, equipment, and funding on July 1, 2024, abolishing the commission. Its charitable gamin… - Public gains access to gaming records: benefit, low. Beginning July 1, 2025, the gaming corporation's records and board meetings are generally open to the public. It can withhold trade secrets, legally protected intellectual property, confidential business information, and operational security records. Meetings can close for applicable legal exceptio… - Beverage exporters get a tax exemption: benefit, low. Covered alcoholic and cannabis-infused drinks made in or imported into Kentucky are exempt from the state gallon tax when permanently shipped out. The drinks must be sold and consumed outside Kentucky. - Employer college credit lasts through 2037: benefit, low. The Metropolitan College employer tax credit is extended to April 15, 2037, unless lawmakers extend it again. Qualifying taxpayers receive 50% of eligible tuition and other education costs for up to 2,800 participating employees yearly. They must be consortium-agreement parties as of June 26, 2009,… - Large event sponsors share tax incentives: benefit, low. Beginning July 1, 2025, qualifying attractions receive an incentive equal to 50% of Kentucky sales tax from admissions and on-site goods and services. Half goes to the venue operator for operations and maintenance, and half goes to the sponsor. Each ticketed, public entertainment series must last a… - Older development projects can seek incentives: benefit, low. A narrow group of revised projects can reapply to the first Signature Project initiative for eligible cost recovery. The original project cannot have had the specified local development contract in effect on or before March 23, 2007. It must have had a project grant agreement signed before January… - Tourism developers gain broader tax incentives: benefit, low. Approved tourism attractions in enhanced incentive counties with 20,000 or fewer people can receive sales-tax incentives over 20 years. County population uses the latest decennial census when the company gains approval. Recovery cannot exceed the lower of company-and-lessee sales-tax liability or 5… - Farm buyers face longer commitments: cost, high. Buyers in Selling Farmer Tax Credit deals must intend to keep the purchased Kentucky land in for-profit farming for 10 years, up from five. They must provide most of the farm’s management and materially take part in its work. Buyers who fail program requirements owe a penalty equal to the seller’s… - Hemp drink businesses face new requirements: cost, medium. Covered cannabis drinks must be permitted, intoxicating adult-use liquids with no more than 5 milligrams of intoxicating cannabinoids per 12-ounce serving. Cannabinoids must come from USDA-sanctioned domestic hemp programs, not other substances; medical cannabis, tinctures, and solely nonintoxicati… - New farm credit applications end: cost, medium. New Selling Farmer Tax Credit applications are not accepted or considered on or after December 31, 2031. Applications with preliminary or final approval by that date remain covered by the program rules. - Beverage businesses face new filing rules: cost, low. Covered alcohol licensees, except retailers, and permitted cannabis-drink manufacturers must file monthly beverage activity reports by the 20th. Reports cover the prior month, including beverages destined for sale outside Kentucky; Revenue can require additional reports. Beginning July 1, 2026, qua… - New electronic charity ticket sites limited: cost, low. From July 1, 2025, through April 15, 2026, the gaming corporation generally cannot approve additional electronic charity ticket locations. New approvals are limited to charity offices, licensed bingo sites, and pre-approved fundraising events. Activities and sites operating before July 1, 2025, can… - New taxes on cannabis drinks: cost, low. Kentucky taxes covered cannabis-infused drinks at $1.92 per gallon, with proportional amounts for smaller or larger containers. A separate 11% tax applies to covered wholesale sales and certain shipments to consumers at Kentucky addresses. Covered manufacturers must hold a Kentucky Department for P… - Property classification changes limit refund claims: cost, low. Qualifying utility mains, pipes, pipelines, and conduits count as real property beyond the former 2024–2025 assessment limit. This covers authorized infrastructure in public or private streets or places serving public heat, steam, water, sewage, gas, or electricity. The property-tax amendments in S… - Kentucky updates federal income tax rules: mixed, medium. For tax years beginning January 1, 2025, Kentucky uses the federal tax code in effect on December 31, 2024. This replaces the December 31, 2023 reference date. Later federal changes generally do not apply, except extensions of provisions that otherwise expire. The effect on a taxpayer's bill depend… - Data center incentives reach more counties: mixed, medium. Data center owners, operators, and colocation tenants need $450 million in investment in counties with at least 100,000 people. The minimum is $100 million above 50,000 but below 100,000 people, and $25 million at 50,000 or fewer. Project organizers need $150 million, and required investment must b… - Gaming corporation gains flexibility, loses funding: mixed, low. Beginning July 1, 2025, the gaming corporation can set its own purchasing rules instead of following the standard state procurement chapter. Major personal-service procurements are exempt from a specified state rule, and its president can declare purchasing emergencies. After transfers of specified… - Bonded spirits face taxes before exemption: mixed, low. Spirits stored or aging in barrels in qualifying bond-financed warehouses are taxed on 100% of value at January 1, 2023 rates. Warehouses must belong to tax-exempt governments or statutory authorities, with industrial revenue bonds issued before January 1, 2024. Some warehouse costs must remain bon… - Distillers get relief but replacement taxes: mixed, low. The taxable share of qualifying barrel-stored spirits falls from 96% on January 1, 2026, to 8% on January 1, 2042. These spirits become exempt from state and local property taxes on January 1, 2043. Starting in 2026, qualifying warehouse taxpayers also owe a replacement tax in jurisdictions that co… - Further income tax cuts need lawmakers: mixed, low. State budget officials must review fiscal tests and report by September 5, 2025, and September 5, 2026. Passing those tests permits lawmakers to consider income tax cuts for 2027 and 2028, respectively. Revenue officials cannot lower the rate without General Assembly action. Annual reviews continue… - Local development areas gain financing options: mixed, low. In counties containing a consolidated local government or first-class city, qualifying development areas can be smaller than one square mile. They remain capped at six square miles, may include existing economic assets, and must meet public-improvement or project criteria. New areas can also be car… - Lodging incentives come with new reviews: mixed, low. Specified approved lodging projects receive 20-year sales-tax incentives capped at the lower of company-and-lessee sales-tax liability or 50% of approved costs. One qualifying project type needs over $100 million in eligible costs and at least 100 public-open days yearly, including year one. After… ## Sponsors and cosponsors - Sponsor: Jason Nemes (Republican), House ## Roll call votes | Date | Chamber | Motion | Result | Yes | No | Other | | --- | --- | --- | --- | --- | --- | --- | | 2025-03-14 | Senate | passed | pass | 32 | 5 | | | 2025-03-11 | House | 3rd reading, passed | pass | 67 | 18 | | ## Actions (40) - 2025-03-27: became law without Governor's Signature (Acts Ch. 98) - 2025-03-26: filed without Governor's signature with the Secretary of State - 2025-03-14: delivered to Governor - 2025-03-14: enrolled, signed by President of the Senate (Senate) - 2025-03-14: enrolled, signed by Speaker of the House (Senate) - 2025-03-14: passed 61-23 (Senate) - 2025-03-14: House concurred in Senate Committee Substitute (1) and Floor Amendment (4) (Senate) - 2025-03-14: posted for passage for concurrence in Senate Committee Substitute (1) and Floor Amendment (4) (Senate) - 2025-03-14: to Rules (H) (House) - 2025-03-14: received in House (House) - 2025-03-14: passed 32-5 with Committee Substitute (1) and Floor Amendment (4) (Senate) - 2025-03-14: Floor Amendments (1), (2) and (3) withdrawn (Senate) - 2025-03-14: 3rd reading (Senate) - 2025-03-14: floor amendment (4) filed to Committee Substitute (Senate) - 2025-03-14: posted for passage in the Regular Orders of the Day for Friday, March 14, 2025 (Senate) - 2025-03-14: reported favorably, to Rules with Committee Substitute (1) (Senate) - 2025-03-13: returned to Appropriations & Revenue (S) (Senate) - 2025-03-13: 2nd reading (Senate) - 2025-03-13: taken from Appropriations & Revenue (S) (Senate) - 2025-03-13: floor amendment (3) filed (Senate) - 2025-03-12: floor amendments (1) and (2) filed (Senate) - 2025-03-11: 1st reading (Senate) - 2025-03-11: returned to Appropriations & Revenue (S) (Senate) - 2025-03-11: taken from Appropriations & Revenue (S) (Senate) - 2025-03-11: to Appropriations & Revenue (S) (Senate) - 2025-03-11: to Committee on Committees (S) (Senate) - 2025-03-11: received in Senate (Senate) - 2025-03-11: 3rd reading, passed 67-18 with Committee Substitute (2) and Committee Amendment (1-title) (House) - 2025-03-11: placed in the Orders of the Day (House) - 2025-03-11: taken from Rules (House) - 2025-03-11: reported favorably, to Rules with Committee Substitute (2) and Committee Amendment (1-title) (House) - 2025-03-06: recommitted to Appropriations & Revenue (H) (House) - 2025-03-06: taken from the Orders of the Day (House) - 2025-03-05: floor amendment (1) filed to Committee Substitute (House) - 2025-02-28: posted for passage in the Regular Orders of the Day for Tuesday, March 04, 2025 (House) - 2025-02-28: 2nd reading, to Rules (House) - 2025-02-27: reported favorably, 1st reading, to Calendar with Committee Substitute (1) (House) - 2025-02-20: to Economic Development & Workforce Investment (H) (House) - 2025-02-19: to Committee on Committees (H) (House) - 2025-02-19: introduced in House (House) ## Bill text - Current, 2025-03-14: [PDF](https://apps.legislature.ky.gov/recorddocuments/bill/25RS/hb775/bill.pdf) - Introduced, 2025-01-30: [PDF](https://apps.legislature.ky.gov/recorddocuments/bill/25RS/hb775/orig_bill.pdf) ## Related bills - HB 501: AN ACT relating to pharmaceutical drugs. (became law) - HB 664: AN ACT relating to the operation of a motor vehicle and declaring an emergency. (signed) - HB 606: AN ACT relating to economic development. (signed) - HB 421: AN ACT relating to colorectal cancer screenings. (signed) - HB 555: AN ACT relating to local government financial practices. (signed) - HB 493: AN ACT relating to the towing and storage of motor vehicles. (signed) ## Sources - [Current (PDF)](https://apps.legislature.ky.gov/recorddocuments/bill/25RS/hb775/bill.pdf) - [Introduced (PDF)](https://apps.legislature.ky.gov/recorddocuments/bill/25RS/hb775/orig_bill.pdf) ## Related - [HB 501: AN ACT relating to pharmaceutical drugs.](https://policyrisk.com/state-bill/KY-HB501-2025RS) - [HB 664: AN ACT relating to the operation of a motor vehicle and declaring an emergency.](https://policyrisk.com/state-bill/KY-HB664-2025RS) - [HB 606: AN ACT relating to economic development.](https://policyrisk.com/state-bill/KY-HB606-2025RS) - [HB 421: AN ACT relating to colorectal cancer screenings.](https://policyrisk.com/state-bill/KY-HB421-2025RS) - [HB 555: AN ACT relating to local government financial practices.](https://policyrisk.com/state-bill/KY-HB555-2025RS) - [HB 493: AN ACT relating to the towing and storage of motor vehicles.](https://policyrisk.com/state-bill/KY-HB493-2025RS) - [Kentucky bills](https://policyrisk.com/states/kentucky/bills) - [Kentucky state hub](https://policyrisk.com/states/kentucky) - [All state legislation](https://policyrisk.com/state-bills) Source: PRIA, https://policyrisk.com/state-bill/KY-HB775-2025RS (as of 2026-10-17).