Ky. hopes eliminating tax draws more residents

By Joe Biesk – The Associated Press
Posted : Thursday Jul 2, 2009 18:56:31 EDT

FRANKFORT, Ky. — Home to two Army bases and thousands of soldiers, Kentucky is looking to entice more 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’s a nod to soldiers’ service to the country, and a shot at boosting the state’s economy.  “When the soldiers come out of Fort Campbell, they take a right instead of a left to come to Kentucky,” said state Sen. Joey Pendleton, a Hopkinsville Democrat who has helped push for the legislation. “We feel like this will be a big economic development win for us.”  Kentucky has both Fort Knox and Fort Campbell — which straddles the border with Tennessee — within its borders. After years of trying, lawmakers approved the exemption during a special session in June.  The income tax exemption applies to all military pay earned by active duty soldiers, reservists and members of the National Guard.  Each state taxes military pay differently — some not at all. Some states tax soldiers the same as anyone else, while others — such as Michigan or Montana — exempt all or some military pay.


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