AN ACT relating to the collection of local business taxes and fees.

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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. KRS 67.767 is amended to read as follows: 3
(1) (a) 1. The Secretary of State shall prescribe separate[a] standard [form or 4
]forms, through promulgation of an administrative regulation in 5
accordance with KRS Chapter 13A , which [shall be accepted by all tax 6
districts and ]shall allow for: 7
a. A combined net profits and gross receipts occupational license 8
taxes return or separate forms for a net profits occupational 9
license tax return and a gross receipts occupational licen se tax 10
return by all business entities; and 11
b. A payroll occupational license tax return, for returns of payroll 12
taxes by all business entities [returns of net profits and gross 13
receipts occupational license taxes by all business entities unless 14
the tax dis trict opts out from acceptance in accordance with 15
subsection (2) of this section or is exempted under subsection (3) 16
of this section]. 17
2. For business entities to have the information necessary to ensure the 18
proper payment of the taxes to each tax district, the Secretary shall also 19
develop and update as necessary: 20
a. Instructions [or a set of instructions ] for business entities on the 21
completion of the standard [form or ]forms; and 22
b. Fillable portable document format versions of each of the 23
standardized forms developed pursuant to subparagraph 1. of 24
this paragraph [so that business entities have the current 25
information necessary to ensure the proper payment of the tax to 26
each tax district]. 27
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(b) The Secretary shall seek advice and comments on the development, 1
amendment, and maintenance of the [form or ]forms and instructions from an 2
advisory committee chaired by the Secretary, or his or her des ignee, that is 3
composed of: 4
1. One (1) member of the Secretary of State's staff; 5
2. Two (2) members submitted by the Kentucky League of Cities; 6
3. Two (2) members submitted by the Kentucky Association of Counties, 7
at least one (1) of which shall be a curre nt elected county 8
judge/executive; 9
4. Two (2) members submitted by the Kentucky Society of Certified 10
Public Accountants; 11
5. One (1) member submitted by the Kentucky Association of County 12
Treasurers and Finance Officers; 13
6. One (1) member submitted by the A ssociated General Contractors of 14
Kentucky; 15
7. One (1) member submitted by the Kentucky Association of Master 16
Contractors; 17
8. One (1) member submitted by the National Federation of Independent 18
Business; 19
9. One (1) member submitted by the Associated Builders and Contractors 20
of Indiana/Kentucky; 21
10. Two (2) members submitted by the Kentucky Occupational License 22
Association; and 23
11. One (1) member submitted by the Kentucky School Boards 24
Association. 25
(c) The advisory committee shall: 26
1. Meet at the call of the chair; 27
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2. Convene before August 31, 2026, for the first meeting, and as 1
necessary thereafter; 2
3. Develop any new forms, returns, and instructions required in this 3
subsection before June 1, 2027; and 4
4. File the completed forms to the Legislative Research Co mmittee for 5
referral to the Interim Joint Committee on Local Government by June 6
24, 2027. 7
(d) Within fourteen (14) days after the July 2027 Interim Joint Committee on 8
Local Government meeting, the Secretary of State shall submit a proposed 9
administrative r egulation to the Legislative Research Committee in 10
accordance with KRS Chapter 13A, which includes the forms and electronic 11
links required in this subsection. 12
(e) This subsection shall not be interpreted to require the development or 13
adoption of a new form if the Secretary of the State determines that an 14
existing form satisfies the requirements of paragraph (a) of this subsection. 15
[a representative from the Kentucky Association of Counties, the Kentucky 16
League of Cities, the Kentucky Occupational License As sociation, the 17
Kentucky School Boards Association, the Kentucky Society of Certified 18
Public Accountants, urban -county governments, and consolidated local 19
governments, and a representative of business entities appointed by the 20
Secretary. 21
(c) During the deve lopment of the proposed initial form or forms, the Secretary 22
of State shall report in writing to the Interim Joint Committee on Local 23
Government on the progress of the development process. When the proposed 24
administrative regulation is filed with the Legis lative Research Commission 25
pursuant to KRS Chapter 13A, the Secretary of State shall also submit a copy 26
thereof, via regular or electronic mail, to the members of the Interim Joint 27
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Committee on Local Government or, if during a session of the General 1
Assembly, to the members of the House Standing Committee on Local 2
Government and the Senate Standing Committee on State and Local 3
Government. The submission to the members shall include a note from the 4
Secretary of State stating that the members may submit any c omments 5
regarding the proposed administrative regulation in accordance with the 6
deadline established in KRS 13A.270(1)(c). 7
(d) Notwithstanding KRS 13A.290(6)(a), after full review by the Administrative 8
Regulation Review Subcommittee, the Legislative Resear ch Commission 9
shall assign the administrative regulation to the Interim Joint Committee on 10
Local Government for consideration or, if during a session of the General 11
Assembly, to the House Standing Committee on Local Government and the 12
Senate Standing Committee on State and Local Government.] 13
(f)[(e)] Once the standard [ form or] forms are adopted or amended, the 14
Secretary of State shall include the [ form or] forms, instructions, electronic 15
links to the fillable portable document format versions of the forms, and any 16
updates on the one -stop business portal or another public website maintained 17
by that office , along with information submitted to the Secretary of State 18
pursuant to subsection (2) or (3) of this section. The [ form or] forms and 19
instructions shall b e updated and maintained by the Secretary of State at no 20
cost to the tax districts. A[No] fee shall not be levied against the public or 21
businesses for accessing and downloading forms, instructions, or other 22
information maintained by the Secretary of State under this section. 23
(2) After the[ form or] forms are adopted under subsection (1) of this section but prior 24
to July 1, 2029[July 1, 2017], a tax district shall: 25
(a) [may ]Adopt the standard [ form or] forms as its exclusive electronic return[ 26
form or] forms;[,] 27
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(b) [may ]Accept the standard[ form or] forms electronically in addition to the tax 1
district's own return form or forms; or 2
(c) 1. Opt out from adopting or using the forms in paragraphs (a) and (b) of 3
this subsection if it has: 4
a. An online filing and payment system in use on or before January 5
1, 2025; or 6
b. Entered into a binding contract for the implementation of an 7
online filing and payment system on or before July 1, 2026. 8
2. If a tax district opts out under subparagraph 1. of this paragraph, in 9
addition to providing online access to the electronic filing and 10
payment system it uses on its own website that permits the electronic 11
submission of forms and the electronic remittance of payments, and in 12
order to maintain its exemption, it shall provide: 13
a. An electronic link to access its online filing and payment 14
system[, or may elect to opt out of accepting the standard form or 15
forms through adoption of a written order by the tax district's 16
governing body. If a tax district elects not to a ccept the standard 17
form or forms, it shall forward the following information] to the 18
Secretary of State for inclusion on the one -stop business portal or 19
another public website maintained by that office;[:] 20
b.[(a)] A copy of the written order specifying tha t the tax district 21
has a qualifying online filing system in use and will not accept 22
the standard [ form or] forms within thirty (30) days of its 23
adoption; and 24
c.[(b)] A copy of occupational license tax forms that the tax district 25
accepts, any accompanying i nstructions, and any future 26
amendments to those forms , [and ] instructions, and electronic 27
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links within thirty (30) days of any change. 1
(3) A tax district that accepts the standard forms for filing under subsection (2)(a) or 2
(b) of this section shall have n ine (9) months from the final approval date of an 3
administrative regulation establishing any new or amended standard forms to 4
comply with the provisions of those subsections. 5
(4)[(3)] After July 1, 2029[July 1, 2017], a tax district: 6
(a) Shall either adopt the standard [ form or] forms as its exclusive electronic 7
return[ form or] forms or accept the standard [form or ] forms in addition to 8
the tax district's own return form or forms, unless: 9
1.[(a)] The tax district submits a written request approved by the t ax 10
district's governing body to the Secretary of State for an exemption 11
based on documented information that: 12
a. Acceptance of the form will impose an undue financial hardship 13
on the tax district; or 14
b. The tax district is part of an interlocal agreement t hat provides 15
for a single tax collection process for multiple jurisdictions; and 16
2.[(b)] The Secretary of State approves the request for an exemption and 17
obtains the return [ form or] forms that will be accepted by the tax 18
district and any applicable instru ctions for inclusion on the one -stop 19
business portal or another public website maintained by that office. In 20
exercising his or her discretion to grant an exemption under this 21
subsection, the Secretary of State may impose any reasonable terms and 22
limitations upon the exemption; 23
(b) Shall provide on its official website or other means for business entities to 24
access and download the forms, returns, instructions, and methods of 25
acceptable electronic payment of its occupational license taxes in a way that 26
the forms and returns may be electronically completed and submitted to the 27
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tax district by the taxpayer; 1
(c) Shall allow a taxpayer who files the forms or returns electronically to pay 2
the tax due with the form or return by an automated clearinghouse 3
electronic funds transfer directly to the tax district's designated depository 4
account or by any other approved electronic method; 5
(d) May charge and collect from the taxpayer an additional electronic 6
processing fee and any fee or surcharge to recover the actual cos ts incurred 7
by the taxing district in connection with the electronic filing, processing, 8
security, maintenance, and acceptance of electronic payments, including 9
costs imposed by third party vendors or financial institutions; 10
(e) Shall provide an electroni c receipt to the taxpayer upon the successful 11
electronic filing of the form or return and payment; and 12
(f) If approved by an annual application with the Secretary of State, shall not 13
be subject to the provisions of paragraphs (b) to (f) of this subsection if the 14
tax district: 15
1. Collected less than two hundred thousand dollars ($200,000) during 16
the immediately preceding fiscal year from the combined levy of all 17
types of occupational license taxes in the immediately preceding fiscal 18
year; or 19
2. Submits reaso nable evidence that the cost of compliance with this 20
paragraph would exceed more than five percent (5%) of the taxing 21
district's total annual budget. 22
(5)[(4)] Upon receipt of an order pursuant to subsection (2) of this section or upon the 23
issuance of an ex emption under subsection (4)[(3)] of this section, the Secretary of 24
State shall provide notice to the Kentucky Society of Certified Public Accountants 25
of the tax districts that have submitted a written order to opt out under subsection 26
(2) of this section or that are granted an exemption under subsection (4)[(3)] of this 27
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section. 1
(6)[(5)] The Secretary of State shall [, only upon the request of a tax district,] include 2
electronic links for the electronic [ filing of] downloading of forms and electronic 3
links for the online tax filing payment system provided to it under this section on 4
the one-stop business portal or other website maintained by the Secretary of State 5
within thirty (30) of receipt from the tax district [ with the local tax di strict by no 6
later than July 1, 2017]. 7
(7)[(6)] Nothing in this section or KRS 67.766 shall be interpreted to alter or preempt 8
the requirements imposed by a tax district regarding deadlines, reporting, rates, or 9
other legally imposed procedures regarding the imposition, administration, and 10
collection of local occupational license taxes by a tax district. Nor shall the 11
adoption or use of a standard [ form or] forms developed under this section release 12
the taxpayer from any liability or responsibility to the tax district for the correct 13
payment of taxes, penalties, and any other obligations imposed by the tax district. 14
This section and KRS 67.766 shall not b e interpreted to authorize the collection of 15
local tax revenues by the state government or any other agency of the state. 16