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Advocacy in action blog

The Kentucky Legislature has passed a comprehensive tax reform package, and thanks to advocacy work by NAIFA's Kentucky chapter financial planners and investment advisors narrowly avoided a 6% sales tax on their services.

On March 30, 2022, Kentucky House Bill 8 was sent to Governor Andy Beshear’s desk to be signed into law. HB 8 by Kentucky Representative Jason Petrie, in its original form, aimed to impose a 6% sales tax on a variety of services to help lower the state’s income tax. While financial services are rarely subject to sales taxes, this proposal would have made Kentucky subject to one of the highest tax rates in the country for these services.

NAIFA immediately engaged in strategic outreach to Kentucky lawmakers. NAIFA-KY President Cathy Carlson and other local NAIFA members visited in person with home district legislators and members of the Senate Appropriations & Revenue Committee to express the major concerns regarding HB 8 coming directly from financial planners. NAIFA-KY members Patrick Robison and Brian Wilson also contacted their respective legislators.

NAIFA worked closely with a broad coalition of industry partners and along with NAIFA-KY's grassroots efforts, found success when the Senate Committee Substitute bill was introduced removing the taxes on personal financial planning and investment management services. This is an amazing legislative win that not only continues to protect NAIFA members but also shows the power of NAIFA’s grassroots advocacy.

Financial planning includes several valuable services including budgeting, planning for retirement, college savings, investing, estate planning, risk management, and more. Imposing additional taxes and fees could have had a devastating impact on the accumulation of assets, particularly in long-term savings strategies like retirement planning. High sales taxes on investment management fees would discourage large private investors from placing their money with Kentucky's financial professionals. Furthermore, this tax would have created an additional hurdle for Kentuckians who want and need the assistance of financial planners or investment advisors.

Please join us in celebrating this NAIFA-Kentucky win in keeping financial planning and investment management services sales tax free!

If you are interested in learning more about NAIFA’s grassroots network and have a passion for advocacy, make sure to register for NAIFA’s 2022 Congressional Conference in Washington, D.C.! Be among the hundreds of top industry professionals visiting Capitol Hill to advocate for policies that impact your business and clients.