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Restaurant Tax

Cities of the previous fourth and fifth class are authorized by KRS 91A.400 to levy a tax on restaurant sales to fund local tourism commissions. All money received from a restaurant tax must be turned over to the community’s tourism and convention commission. A consolidated local government is authorized by KRS 153.460 to impose a restaurant tax to fund the operating costs of a multipurpose arena.

Only around 20% of cities allowed to levy a restaurant tax have chosen to do so. Although restaurant taxes accounted for only 1% of total tax collections, they provided $28.7 million in revenue in FY 2021.