Secret kentucky tax (Louisville, Jeffersontown, Okolona: sales, car insurance, buy) - (KY) - City-Data Forum

Moreyhead · 07-04-2011, 01:30 PM

Does anyone know the details about a secret Kentucky tax referred to as: INSURANCE PREMIUM TAX? A tax that is added to insurance policies. If so, could you please explain why it was started, what types of insurance it is applied to (i.e. auto, health, home, dental, boat, etc.) who collects the money (state ?) etc. Was the tax started for a specific purpose such as road repair......?

Is this tax charged to everyone in the state who purchases insurance or only in select communities?

This tax seems to be a well-kept Kentucky secret.

Thanks.

InLondon · 07-04-2011, 02:09 PM

It's not a secret, see link below....

Kentucky: Department of Revenue - Insurance Premiums Tax/Surcharge

Off Topic · 07-05-2011, 06:54 AM

Yeah, that's been around for years, if not decades. Hardly a secret, especially to anyone in the insurance business.

Why you may have thought it was a secret is that many companies are now listing all of these taxes rather than just a flat rate. So for example, my cable company doesn't send me a bill for $90 -- it sends me a bill for $80 of service and $10 of taxes. Which on one hand seems like a good idea (the more information the better) and on the other hand seems like they are trying to shift some of the blame for a high bill. "Hey, it's not us ripping you off, it's the evil big government!"

tomocox · 07-05-2011, 07:40 PM

It's original purpose was to provide funding for police and firefighter pensions and workers compensation. Typical of all taxes, once the foot was in the door...

Moreyhead · 07-09-2011, 12:14 PM

Thanks to those who posted a reply.

It has been interesting trying to find out about this tax. It appears that the tax is now more than 12%. An insurance agent stated that it was JUST SOMETHING THAT THE COMPUTER ADDS TO POLICIES!!!!! SO JUST PAY IT!! When pressed for an explanation of what the tax is for......they had no idea.

It appears that cities, villages etc. add the tax. Do they spend all of the collected funds for PENSIONS? I thought that I heard that the pension funds (Kentuck public pension funds) are in bad shape.

Does anyone know whether ALL KENTUCKY RESIDENTS must pay the tax?

tomocox · 07-09-2011, 12:25 PM

Quote:

Originally Posted by Moreyhead

Thanks to those who posted a reply.

It has been interesting trying to find out about this tax. It appears that the tax is now more than 12%. An insurance agent stated that it was JUST SOMETHING THAT THE COMPUTER ADDS TO POLICIES!!!!! SO JUST PAY IT!! When pressed for an explanation of what the tax is for......they had no idea.

It appears that cities, villages etc. add the tax. Do they spend all of the collected funds for PENSIONS? I thought that I heard that the pension funds (Kentuck public pension funds) are in bad shape.

Does anyone know whether ALL KENTUCKY RESIDENTS must pay the tax?

Yes, all Kentucky Residents must pay 1.75%, then each city, town, or even recently county government could add their own rate above that. It once was limited to 10% max, but....

Off Topic · 07-10-2011, 10:32 AM

Quote:

Originally Posted by Moreyhead

An insurance agent stated that it was JUST SOMETHING THAT THE COMPUTER ADDS TO POLICIES!!!!!

LOL. You mean like the computers just adding sales tax when you buy a meal? Or the computer just adding sales tax when you buy clothes?

I understand you getting upset about taxes but seriously, this isn't anymore more than a sales tax on insurance policies. It's not secret, it's not sinister, it's not a plot to deprive you of your freedoms. It's just a tax.

sanibal · 01-22-2018, 04:42 PM

Your car insurance tax will be paid to the city you list as address. Your car insurance bill will show which city they are paying. In Jefferson County you need to list your actual city not just "Louisville". There are over 80 cities in Jefferson County. If you live in Jeffersontown, Lyndon, Buechal, St. Mathews, Windy Hills, Okolona, Fairdale, Middletown, etc., etc., etc., any incorporated area, you need to use your actual city as your address so that the tax $$'s will be properly directed and not erroneously sent to that tax grub Louisville.

Normashirley · 01-24-2018, 07:40 PM

I believe Kntucky is also only one of seven states that still has a "Tangible Personal Property" tax.

https://taxfoundation.org/states-mov...onal-property/

It was a huge reason why KY was NOT on my list of possible states to retire in.

The map in the above link is a few years old, so the TPP tax may have been abolished by now??

Oldhag1 · 01-25-2018, 02:59 AM

Quote:

Originally Posted by Normashirley

I believe Kntucky is also only one of seven states that still has a "Tangible Personal Property" tax.

https://taxfoundation.org/states-mov...onal-property/

It was a huge reason why KY was NOT on my list of possible states to retire in.

The map in the above link is a few years old, so the TPP tax may have been abolished by now??

Interesting given that Kentucky is continually ranked as one of the most retirement friendly states in the nation, and low overall taxes is almost always listed as one of the factors. I know we'll be retiring there, and one of the factors is, even with paying all those not-so-secret taxes, our taxes alone will be at least 10K cheaper than where we currently live.