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Kentucky Exempts Military from State Income Tax 
Army News Service 
Dave Campbell 
FORT CAMPBELL, Ky., Sept. 14, 2009 
Kentucky Gov. Steve Beshear signed the state's military tax exemption bill Sept. 9 in a ceremony at the 101st Airborne Division Headquarters.

The bill will relieve Soldiers of their yearly income tax responsibilities if they are residents of Kentucky.

Kentucky became the 10th state in which Soldiers are not required to pay state income tax, joining Florida, Alaska, Michigan, Texas, New Hampshire, Nevada, South Dakota, Wyoming and Washington state.

In effect on Jan. 1, it's estimated the bill will put about $1,000 a year back into the pockets of active-duty Soldiers, including Reserve and National Guard members.

"If this persuades Soldiers to make their homes in Kentucky, rather than some neighboring state, then it's a positive for us," said Nicole Hagan, district manager of the Hopkinsville Service Center.

Beshear recognized that passage of the bill was not only a way of saying thanks, but also an enticing draw for Soldiers to settle their residence in Kentucky.

"In a small but tangible way we're showing our support," Beshear said. "This gesture is a long time coming, but it's here today."

The bill was approved during a special legislative session in June and after a long push from advocates on both sides of the aisle, Beshear said.

Following the ceremony, lawmakers active in the bill's passage gathered with the governor to explain further about the bill, a process said to have begun years ago, being introduced to numerous different legislative sessions.

"The first time I put this measure in the budget, the governor at that time, took it out," Kentucky Senator Elizabeth Tori said.

One estimate on how the bill will affect state funding was a potential loss to state revenue in the amount of $18 million, said Sen. David Williams, who also helped pass the bill.

The figure was reached as one that would depend on all those eligible taking advantage of the benefits.

The hope prevailed, however that the enticing draw of the exemption would provide more benefits to the state, than loss, as it could enticed more Soldiers to move their residence to Kentucky.

There was much discussion and debate, and even some "speed bumps" throughout the five-year legislative process, Beshear acknowledged.

"Mostly I think the bumps were, can we give up the revenue," he said, adding that regardless of any hit to the budget, this was the right thing to do.

Williams cited a speech by Tori in which she quieted opposition when referencing the distinction of military personnel from other residents.

She called the tax exemption a continual Christmas present to the military, and any price to pay is very small compared to what military residents give.

9/21/2009