New Kentucky laws regarding THC-infused drinks, online data going into effect Jan. 1

LOUISVILLE, Ky. (WDRB) -- Several new Kentucky laws go into effect Thursday.

The new rules range from online data rights to restrictions on THC-infused drink sales. Here's a breakdown of some of the changes that could effect you:

Income Tax Changing

The General Assembly passed House Bill 1 in early this year, which lowers the state's individual income tax from 4% to 3.5% starting Jan. 1.

Supporters of the measure said the lower rate will promote long-term economic growth and population gains in the Bluegrass State by enabling people to keep more of the money they earn. State lawmakers, like Rep. Jason Nemes, R-Louisville, hope to completely eliminate the state's income tax. He believes it's possible in eight to 10 years with incremental cuts.

"It's on our way to 0% over time," Nemes said. "The states that have low to no income tax grow at twice the rate of states that have over a 3.5% income tax. So that's the reason we do it."

In 2022, the legislature passed a bill which lowers Kentucky's income tax rate gradually with a goal of eventually eliminating it altogether, but the reductions depend on certain budget conditions being met.

Lawmakers have different interpretations on whether those conditions have been met this year as they debate a further cut for 2027.

Earlier in 2025, Gov. Andy Beshear said the half-percentage point cut would reduce the state's general fund revenues by $718 million annually once it is fully implemented. The general fund pays for most state services, including education, health care and public safety.

Consumer Data Privacy

Kentuckians will soon have more rights over their personal information online under The Kentucky Consumer Data Protection Act.

In 2026, you will be able to access, correct and delete that information on the internet. You can also opt out of targeted ads and data sales.

The KCDPA applies to businesses that operate in Kentucky or deliberately market their goods or services to Kentucky residents and meet at least one of these thresholds in a year:

They handle personal data belonging to 100,000 or more consumers, or
They handle data from 25,000 or more consumers and make over half of their revenue from selling personal data.

Consumers can:

Ask whether a business is collecting or using their personal data
Request access to the data a business has about them
Ask for incorrect information to be fixed
Request deletion of personal data the business collected

Consumers can also opt out of:

Targeted advertising
The sale of their personal data
Certain automated decision-making processes that significantly affect them (such as profiling)

Businesses are required to provide simple and accessible ways for people to exercise these rights.

The law does not apply to certain entities and data already subject to other federal privacy laws, such as Health Insurance Portability and Accountability Act (HIPPA), Gramm-Leach-Bliley Act (GLBA), and Fair Credit Reporting Act (FCRA).

Only the Kentucky attorney general can enforce the KCDPA. Consumers cannot sue businesses directly under this law.

Before penalties are imposed, businesses must be given a 30-day period to correct violations after receiving notice. If the problem is not fixed, the state may seek civil penalties of up to $7,500 per violation. Any collected penalties go toward funding privacy enforcement efforts in Kentucky.

THC Drink Sales

You won't be able to buy THC-infused drinks at Kentucky fairs and festivals anymore. A new law treats THC seltzers like alcohol and limits the drinks to 5 milligrams per can.

The law allows ABC to regulate the sale of hemp seltzers and requires businesses to get a license to sell them. Single can sales have also been banned at bars and restaurants since June 2025.

However, people can still purchase the hemp seltzers at Kentucky liquor stores. People must be at least 21 years old to purchase the drinks.

Vaping and Tabaco Sales

Kentucky businesses that sell tobacco, nicotine, or vaping products have until Jan. 1, 2026, to obtain a state license or risk fines and criminal penalties.

The deadline comes as part of Senate Bill 100, signed into law by Gov. Andy Beshear on March 24, 2025, aimed at keeping these products out of the hands of minors.

Secretary Ray Perry said the law responds to growing concerns from parents, teachers, and youth advocates about how easily young people can access nicotine and vaping products, according to a news release.

“This licensing process gives our teams the tools they need to protect Kentucky's youth,” Perry said.

The law requires all retailers to secure an annual license through the Kentucky Department of Alcoholic Beverage Control and strengthens enforcement with routine compliance checks and a new team to investigate complaints. A portion of fines will fund youth vaping prevention programs.

Businesses are urged to apply as soon as possible through ABC's Online Licensing Portal to ensure their licenses are processed before the Jan. 1 deadline.