Update: Sales tax increase proposed in Kentucky withdrawn

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FRANKFORT, Ky. (WYMT/WSAZ) - Updated 1/22/2020
Kentucky shoppers and small businesses alike no longer need to worry about an increased sales tax, at least not this year.


Around 7 p.m. Tuesday, House Bill 28, which would have increased the Kentucky sales tax to eight percent, was withdrawn.

Original Story
For Kentucky consumers, there's a possibility that shopping might be a little more expensive in a little over a year.

Rep. John Sims Jr. (D-Flemingsburg) is sponsoring a bill that if passed would raise the sales tax to eight percent starting January 2021. If it passes, it would be the first sales tax increase since 1990.

Local businesses say it could leave their customers paying more at checkout.

Joey McKenney, the owner of Appalachian Apparel, says he is just worried about his customers.

"It creates more of a strain on people who are already maybe struggling to buy the things they need and stuff in the first place," said McKenney. "The sales tax, again, it doesn't affect my bottom line but it does translate to the customers and puts the pressure on them more to have to pay that increase in the tax."

Judy Campbell, the owner of The Decorating Center, says it may not seem like much but for her, it will make a difference.

“My first thoughts were we are already burdened. Small businesses are burdened with the economy in Southeastern Kentucky and I think another tax increase would probably not help us very much," said Campbell. "You know when you think of two percent you don't think that's a whole lot, but when you start adding eight cents to a dollar, you know, everything goes up. "

The bill would also raise personal property tax to six percent and motor vehicle usage tax up to eight percent.

The increase in sales tax proposal comes alongside a possible minimum wage increase that is also making its way through the Kentucky House of Representatives.

“If you come here and we raise prices, the people who buy product off us have to raise prices and then what's to say that the person they're selling to isn't just going to order offline from somewhere that's not as expensive,” said Corey Stinson, who works at Tri-State Vinyl and Supplies in Greenup County. “So it's just going to hurt the local small businesses in the area.”

House Bill 28 was referred to the Kentucky House Appropriations and Revenue Committee.

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