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AN ACT relating to the collection of local business taxes and fees. 1
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 2
SECTION 1. A NEW SECTION OF KRS CHAPTER 41 IS CREATED TO 3
READ AS FOLLOWS: 4
(1) As used in this section: 5
(a) "Occupational license fee" means any occupational license fee levied by a 6
local taxing jurisdiction under KRS 67.083, 68.180, 68.197, 91.200, or 7
92.281; and 8
(b) "System" means the centralized occupational license fee collection and 9
reporting system developed under subsection (2) of this section. 10
(2) On or before January 1, 2028, the Office of the State Treasurer shall develop and 11
maintain a web-based system for the centralized reporting, collection, and 12
distribution of occupational license fees. The State Treasurer may contract with a 13
third party for the development and operation of the system. The system shall: 14
(a) Accommodate the payment and reporting of occupational license fees by a 15
business, including allowing payment and reporting to occur in a single 16
transaction regardless of the number of local taxing jurisdictions involved; 17
(b) Allow businesses to view the occupational license fee rate and related rate 18
base information for each local taxing jurisdiction imposing an 19
occupational license fee; and 20
(c) Provide local taxing jurisdictions access to the occupational license fee 21
information reported by a business for auditing and compliance purposes. 22
(3) Revenues collected by the system shall be distributed to the applicable local taxing 23
jurisdictions within twelve (12) hours of receipt. 24
(4) The State Treasurer may impose an annual fee on businesses using the system to 25
help offset the cost of the system's development and maintenance. 26
(5) Businesses shall not be mandated to use the system and shall continue to have the 27 UNOFFICIAL COPY 25 RS BR 301
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option to report and pay occupational license fees directly to local taxing 1
jurisdictions. 2
(6) The State Treasurer shall promulgate administrative regulations in accordance 3
with KRS Chapter 13A, which establish: 4
(a) The amount of any fees imposed by the State Treasurer on businesses using 5
the system; 6
(b) Procedures for local taxing jurisdictions to submit or update their 7
occupational license fee rate and related rate base information to the State 8
Treasurer; 9
(c) A registration system for businesses to access the system; 10
(d) A universal template for businesses to use to report their occupational 11
license fees and remit any accompanying payment; 12
(e) Procedures for local taxing jurisdictions to access the occupational license 13
fee information reported by businesses; 14
(f) A distribution process for occupational license fee revenues collected 15
through the system; and 16
(g) Reporting requirements related to providing occupational license fee 17
information to the State Treasurer. 18
(7) The State Treasurer shall not be responsible for: 19
(a) Auditing the occupational license fee information provided by businesses or 20
local taxing jurisdictions; 21
(b) Ensuring that businesses comply with the local taxing jurisdiction's 22
occupational license fee requirements; 23
(c) Verifying the amount of occupational license fees paid by businesses; or 24
(d) Issuing credits or refunds from the system to businesses. 25
(8) Occupational license fees reported and paid through the system shall be subject 26
to the same auditing and compliance requirements as occupational license fees 27 UNOFFICIAL COPY 25 RS BR 301
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reported and paid directly to the local taxing jurisdiction outside of the system. 1
(9) Local taxing jurisdictions shall: 2
(a) Cooperate fully with the State Treasurer in the development and 3
implementation of the system; 4
(b) Enact or amend any ordinances necessary to allow the reporting and 5
payment of occupational license fees through the system; and 6
(c) Develop procedures to accommodate the reporting and payment of 7
occupational license fees through the system, including procedures for 8
crediting or refunding the overpayment of occupational license fees by a 9
business. 10
SECTION 2. A NEW SECTION OF KRS CHAPTER 41 IS CREATED TO 11
READ AS FOLLOWS: 12
(1) To reduce the administrative burden on businesses subject to local taxes in the 13
state, the State Treasurer shall appoint a working group to assist in the 14
modernization of reporting, collecting, and distributing local business taxes and 15
fees. 16
(2) The working group shall be chaired by the State Treasurer or his or her designee 17
and shall be composed of the following representatives appointed by the State 18
Treasurer: 19
(a) One (1) member of the State Treasurer’s staff; 20
(b) Two (2) members submitted by the Kentucky League of Cities; 21
(c) Two (2) members submitted by the Kentucky Association of Counties; 22
(d) Two (2) members submitted by the Kentucky Society of CPAs; 23
(e) One (1) member submitted by the Kentucky Association of Manufacturers; 24
(f) One (1) member submitted by the Kentucky Chamber of Commerce; 25
(g) One (1) member submitted by the Kentucky Association of Master 26
Contractors; and 27 UNOFFICIAL COPY 25 RS BR 301
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(h) One (1) member submitted by the National Federation of Independent 1
Business. 2
(3) The working group shall meet at the call of the chair and provide 3
recommendations on creating a centralized system for modernizing the reporting, 4
collection, and distribution of local business taxes and fees. The 5
recommendations shall outline an implementation plan and proposed budget for 6
the centralized system and include: 7
(a) The needs for businesses and local taxing jurisdictions regarding the 8
functionality of a centralized system; 9
(b) A review of existing centralized systems for collecting local business taxes 10
and fees in other states; 11
(c) The feasibility of developing and maintaining a centralized system; and 12
(d) The estimated costs of developing and maintaining a centralized system, 13
including estimated personnel costs. 14
(4) By the tenth day of each month that follows a meeting of the working group, the 15
working group shall provide a written status report listing concerns identified and 16
recommendations made during the prior meeting to the Senate Standing 17
Committee on Appropriations and Revenue and the House Standing Committee 18
on Appropriations and Revenue, or the Interim Joint Committee on 19
Appropriations and Revenue. 20