KY Income Tax Exemption for Military

Frankfort, KY – Kentucky lawmakers are looking to entice more Fort Campbell and Fort Knox troops to become full-time residents by exempting them from the state's income tax. State lawmakers last month approved an income tax exemption for members of the active duty military beginning January 2010. It will apply to all military pay earned by active duty soldiers, reservists, and National Guard members.

Hopkinsville State Senator Joey Pendleton says he feels the exemption will be a big economic development win for the state.

Exactly how many soldiers will become Kentucky residents remains to be seen. Lawmakers predict it will cost the Commonwealth about $18 million in tax revenue - a loss they're hoping to offset with additional property and sales tax revenue that could come with additional soldiers.