HB363 amends Kentucky’s individual income tax law to create a temporary state income tax exclusion for certain employment-related dues. For taxable years beginning on or after January 1, 2026, and before January 1, 2030, taxpayers may exclude professional membership dues and union dues paid during the year, to the extent those amounts are not already deducted under federal law. The bill defines professional membership dues as amounts required to maintain a professional license or association membership related to employment, and union dues as amounts required of members of or public employees represented by a labor organization.
The bill also requires the Department of Revenue to report annual data to the Legislative Research Commission and the Interim Joint Committee on Appropriations and Revenue beginning November 1, 2027, including the number of returns claiming the exclusion, the total exclusions and tax savings, and the tax benefit by income range. Those reporting requirements are made expressly public and not subject to taxpayer confidentiality restrictions for the specified data. In addition, the bill amends Kentucky’s tax confidentiality statute to authorize disclosure of information to the legislature for administration of this new exclusion.
Impact
HB363 would modify KRS 141.019 to add a new temporary subtraction from adjusted gross income for union dues and professional membership dues, affecting individual income tax calculations for eligible taxpayers from 2026 through 2029. It would also amend KRS 131.190 to permit the Department of Revenue to share related data with the Legislative Research Commission for oversight and evaluation of the exclusion. The bill does not change corporate tax law, but it would affect employees, union members, and professionals who pay qualifying dues and could reduce state income tax liability for those taxpayers.
Sentiment
Based on the bill text and the absence of recorded committee testimony or votes in the provided materials, the bill appears to be presented as a targeted tax relief measure rather than a broad tax overhaul. The structure of the bill suggests a policy interest in supporting workers and licensed professionals while also preserving legislative oversight through mandatory reporting. No formal vote history or transcript evidence is available here to show support or opposition, but the inclusion of a sunset date and reporting requirements indicates an effort to make the proposal more measurable and politically palatable.
Contention
The main likely point of contention is the policy choice to grant a tax benefit specifically for union dues and professional membership dues, which may be viewed by supporters as relief for workers and by critics as a selective tax preference. Another possible issue is the fiscal impact on state revenue, since the exclusion would reduce taxable income for affected filers for four tax years. The bill’s reporting and disclosure provisions may also draw attention because they carve out an exception to normal taxpayer confidentiality rules, though only for aggregate evaluation data rather than individual returns.