Standardized Occupational License Forms
On July 1, 2017, Kentucky finalizes the transition to a standardized occupational license tax forms for business reporting. Instead of trying to locate and select between different forms for over 200 taxing districts, businesses will now be able to use standardized forms to file with the local tax districts in which they owe taxes.
HB 277 of the 2012 Kentucky General Assembly established a process to phase in standardized forms for occupational license tax reporting. The legislation was a compromise between the business community and the local government associations to make filing easier for businesses while also ensuring that cities maintain taxing independence. The legislation was implemented in several phases, culminating in the requirement for local governments to accept approved standardized forms by July 1, 2017.
As the first step in implementing the legislation, the Secretary of State gathered all occupational license tax ordinances and forms from tax districts throughout the state. The ordinances and forms of each local taxing jurisdiction were placed on the Secretary of State’s website in November of 2012. Businesses have since been able to download these documents from the Secretary of State’s website, instead of having to contact various tax districts to access them. The Secretary of State maintains updated ordinances and forms as well as a spreadsheet of all occupational license tax rates by city and district. These rates are in a readily searchable format on the website, Microsoft Excel.
In the next phase, the Secretary of State worked with tax preparers and local tax administrators to create standard forms for tax districts that collect taxes for a single district. This single reporting form, complete with instructions, was codified in an administrative regulation in November 2016 and is available on the Secretary of State’s website at http://app.sos.ky.gov/occupationaltax/ as form OL-S Single Tax District, Occupation License Fee Return. And on March 3, 2017, the Dual Tax District Occupational License Fee Return was developed by the Secretary of State and codified in an administrative regulation, with instructions. It too is available on the Secretary of State’s website linked above. There are six districts effected by this change, which are Boyle County/Danville, Daviess County/Owensboro, Henderson County/City of Henderson, Jessamine County/Nicholasville, Rowan County/Morehead, and Taylor County/Campbellsville.
All tax districts that collect for either a single district or dual districts are required to accept the forms effective July 1, 2017.
For those tax districts that collect multi-district occupational taxes, the Secretary of State’s Office is working with stakeholders on the development of another form or forms. Until such a form or forms are adopted formally through the regulatory process, however, businesses reporting in these jurisdictions will likely want to continue using the multi-district return forms developed by local authorities in Boone, Kenton, Campbell, and Scott counties. KLC will make sure to update our members when there are additional developments on this work.
Municipal Road Aid Reminder
We are entering budget season and the KLC Legal Team would like to take this opportunity to remind our cities that they need to have a public hearing to get public input on road and bridge projects before spending municipal road aid funds. KRS 174.100(1). A lot of our cities have found that a good time to conduct this hearing is during the overall budget process.
Notice for the hearing must be given at least seven, and not more than twenty-one days before the hearing and before beginning work on any projects using road aid funds. KRS 174.100(1). At the hearing, any person may speak about any proposed project, any project that they wish to propose, project prioritization, and any other matter related to road or bridge projects in the city. KRS 174.100(2). The city is not bound by the testimony heard, but the city must give the testimony due consideration. KRS 174.100(3).
A single hearing encompassing the entire road and bridge program of the city meets the statutory requirement. Thus, your city might consider having this hearing as part of the overall budget process. KRS 174.100(5). In the alternative, it is also proper to have the public road aid fund hearings throughout the year as the need to expend the funds arise.
If you have any additional questions, please contact the KLC Legal Team at 800.876.4552.
ATTENTION CITY ATTORNEYS AND OFFICIALS:
The KLC Legal Team has compiled summaries of all of the Kentucky Attorney General Opinions, including Open Records and Open Meetings, for the first quarter of the year.
As always, we are striving to provide the most timely and helpful legal information for our cities.
Please see this link for the current summary.
Budget season is upon us yet again and KLC Legal would like to take the opportunity to remind you of some important dates and requirements.
The proposed budget must be submitted by the executive authority, together with a budget message, to the legislative body no later than Thursday, June 1, 2017. The executive authority is the mayor in mayor-council and mayor-alderman cities. In commission cities, the executive authority is the commission.
The budget message is required by KRS 91A.030(7) to explain:
1) The revenue raising and expenditure goals fixed by the budget for the upcoming fiscal year.
2) Important features of activities anticipated in the budget.
3) The reasons for significant changes in program goals and appropriations levels from the previous year.
4) Any major changes in financial policy.
Saturday, July 1, 2017 is the start of the fiscal year and the deadline for our cities to enact their budgets.
If you have any questions, please contact KLC Legal at 1.800.876.4552.
KLC Files Amicus Curiae Brief in Important KY Supreme Court Case on Open Meetings
KLC recently filed an amicus curiae (“friend of the court”) brief in a case before the Kentucky Supreme Court which will examine what a city is allowed to do during a closed session to discuss future acquisition of real property.
In Board of Commissioners of the City of Danville v. Advocate Communications d/b/a the Advocate-Messenger, 2016 WL 1739310, the Kentucky Court of Appeals held that the city had violated the Open Meetings Act by reaching a consensus in closed session regarding bidding on a property for sale at an upcoming public auction and supporting the use of a bidding agent. The Court held the deliberations consisted of “final action” under the Open Meetings Act that should have been voted upon in open session.
The exception utilized by the city to go into closed session, KRS 61.810(1)(b), allows “deliberations on the future acquisition… of real property” when public discussion would “be likely to affect the value” of the property. One of the statutory limitations on this exception is that no “final action” can be taken in closed session. KRS 61.815.
In its brief, KLC first pointed out that the Court of Appeals had confused final action, which is prohibited in closed session, with other types of action, some of which are permitted. KLC urged the Supreme Court to recognize that an analysis of whether action taken in closed session is legal depends on the nature of the public agency involved. Cities operate differently from other public agencies, and even differently from each other depending on their form of government.
In this case, the city operates under the city manager plan, and the laws governing the plan place significant executive and administrative authority in the city manager, including budget administration. The city had already appropriated the funds to purchase the property in the budget ordinance. KLC argued that the board of commissioners could voice its support for the bidding strategy to be used without coming into open session to take formal action, because the city manager was authorized through his statutory powers and the budget ordinance to take action whether or not the closed session occurred. If the city had wanted to reverse course on the purchase, it could have taken final action in open session by amending the budget ordinance to reflect a different purchase price, or otherwise directing the city manager to act in a manner different from that authorized. Since they were merely in agreement with the bidding strategy, and since the strategy fit within the city manager’s authority, there was no need to take final action.
KLC participated in this case through its Legal Advocacy Program, which represents the collective legal interests of KLC’s member cities in the courts throughout the Commonwealth. In the past few years, KLC has participated or assisted in many important victories for cities regarding 911 fees, annexation, legislative prayer, open records exemptions, and many other issues.
We will continue to provide updates on this case as it progresses through the Supreme Court.
To read KLC’s amicus brief, go here. http://www.klc.org/UserFiles/files/DanvilleOpenRecordsBrief.pdf?
For more information on the Program or this case, contact Laura Ross, Managing Legal Services Counsel, at 800-876-4552.