Startup Costs
Kentucky

Costs to Start a Business in Kentucky

Kentucky Startup Costs Overview

Kentucky is home to over ,000 small businesses that account for 99.% of the businesses in the state, employing 4.% of Kentucky's workforce. Kentucky offers a strong business environment supported by industries such as manufacturing, logistics, and healthcare. The state’s central location, competitive tax structure, and access to major transportation routes make it an ideal destination for businesses looking to grow. Kentucky also offers various incentives and development programs for entrepreneurs. Here's a primer on how to start a business in Kentucky.

Kentucky State-Specific Costs

Types of Business Structures

Formation Costs

There are several types of business entities you can choose for your company.  Which is best for your business depends on a variety of factors, like ownership in the business, taxation, and more. Each structure has its own one-time formation or set-up cost that varies by state.

ENTITY
Cost
Corporation
$50
Limited Partnership
$50
Limited Liability Company
$40

Annual Reporting Fees

In many states, business entities must file an annual report. Annual reports are short documents that provide updated information about your business, including the name and address of the business, the people who run it, and its registered agent. Keeping this information up to date ensures you stay compliant.

The most cost efficient way to report annually is to do it yourself. Here are the costs for annual filings for the state.
ENTITY
Cost
Corporation
$15
Limited Partnership
$15
Limited Liability Company
$15

Franchise Tax Fees

Franchise taxes are state fees that businesses pay in order to have the right to operate in those states. They are paid in addition to state and federal income taxes. Here are the franchise tax fees for each business entity structure in this state.  

ENTITY
Cost
C-Corporation
$175 minimum annual fee + 4% of net income
S-Corporation
$175 minimum annual fee
LLC
$175 minimum annual fee



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State Income Taxes

Most states (44 out of 50) levy a corporate income tax.
C-Corps pay a C-Corp state income tax rate.
If the income tax is pass-through, as with S-Corps, use your personal income tax rate.

For LLCs, the tax rate depends on the how you set up the LLC business structure.

  • Multi-member LLC: treated as a partnership (pass-through). Each person pays personal income tax based on their share of the LLC's income and their own personal income tax rate.
  • LLCs as S-Corps: if the LLC elects to be taxed as an S-Corp (pass-through), the LLC is taxed at the personal income tax rate.
  • LLCs as C-Corps: if the LLC elects to be taxed as a C-Corp, the LLC is taxed at the C-corp income tax rate.
ENTITY
Percentage fee
C-Corporation
5%
S-Corporation
Pass-through
Personal
4.5%

Sales Tax

The Kentucky Sales Tax is 6%

Outsourcing Costs

Additional Information

Business Specific Costs

These costs are similar across states. We estimate the total non-state specific costs to be $XXX. Link to Overall Costs page.

Total Costs for Starting a Business in Kentucky


Summing up the above fees, we estimate the total cost for starting a business in this state to be:

$XX