Louisville, KY Taxes 2025
Complete local tax guide and OBBBA calculator
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Louisville Tax Overview 2025
Louisville has local occupational tax. Affordable housing market.
Local Income Tax
2.2%
City/county rate
Sales Tax
6.00%
State + local
Property Tax
0.83%
Effective rate
Median Home
$200,000
Home value
State Tax Information
Louisville is located in Kentucky (4% state income tax)
💼 Louisville Local Income Tax
Louisville imposes a local income tax of 2.2% on residents. This is in addition to any state income tax you may owe to Kentucky.
Local income taxes are common in Ohio, Pennsylvania, and a few other states. They're typically withheld from your paycheck if you work in Louisville, regardless of where you live.
Total Income Tax Burden in Louisville
🛒 Louisville Sales Tax 2025
The combined sales tax rate in Louisville is 6.00%. This includes both the Kentucky sales tax and any local sales taxes.
Sales tax applies to most retail purchases in Louisville. Some items like groceries, prescription medications, and clothing may be exempt or taxed at reduced rates depending on Kentucky law.
Sales Tax Breakdown
Sales Tax Examples
| Purchase Amount | Sales Tax | Total |
|---|---|---|
| $50 | $3.00 | $53.00 |
| $100 | $6.00 | $106.00 |
| $500 | $30.00 | $530.00 |
| $1,000 | $60.00 | $1,060.00 |
🏠 Louisville Property Tax 2025
The average effective property tax rate in Louisville is 0.83%. Based on the median home value of $200,000, the typical homeowner pays approximately $1,660 per year in property taxes.
Property taxes fund local services including schools, police, fire departments, roads, and parks. Rates vary by specific location within Louisville based on school district and other taxing authorities.
Estimated Annual Property Tax in Louisville
| Home Value | Annual Tax | Monthly | SALT Deductible? |
|---|---|---|---|
| $200,000 | $1,660 | $138 | ✓ Yes |
| $300,000 | $2,490 | $208 | ✓ Yes |
| $400,000 | $3,320 | $277 | ✓ Yes |
| $500,000 | $4,150 | $346 | ✓ Yes |
| $750,000 | $6,225 | $519 | ✓ Yes |
| $1,000,000 | $8,300 | $692 | ✓ Yes |
💡 SALT Tip: Under the OBBBA, you can deduct up to $40,000 in state and local taxes (SALT) on your federal return. This includes property taxes, state income taxes, and local income taxes.
💰 Louisville Cost of Living
Housing Costs
Tax Summary
OBBBA Tax Benefits for Louisville Residents
Local income tax makes OBBBA federal deductions more valuable.
The One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, introduced several federal tax deductions that can significantly reduce your tax burden as a Louisville resident.
Available OBBBA Deductions:
Calculate Your Louisville Tax Savings
Use our free OBBBA calculator to see exactly how much you could save on your 2025 federal taxes as a Louisville resident.
Calculate My SavingsFrequently Asked Questions
What is the sales tax in Louisville?
The combined sales tax rate in Louisville is 6.00%. This includes both state and local sales taxes.
Does Louisville have a local income tax?
Louisville has a local income tax of 2.2%. This is in addition to any state and federal income taxes.
What is the property tax rate in Louisville?
The average effective property tax rate in Louisville is 0.83%. On a home worth $200,000, you'd pay approximately $1,660 per year.
How do OBBBA deductions benefit Louisville residents?
Local income tax makes OBBBA federal deductions more valuable. You can use our free calculator to estimate your total savings from tips, overtime, auto loan interest, SALT, and senior bonus deductions.