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UNOFFICIAL COPY 26 RS HB 518/GA
1 AN ACT relating to the collection of local business taxes and fees.
2 Be it enacted by the General Assembly of the Commonwealth of Kentucky:
3 Section 1. KRS 67.767 is amended to read as follows:
4 (1) (a) 1. The Secretary of State shall prescribe separate[a] standard [form or
5 ]forms, through promulgation of an administrative regulation in
6 accordance with KRS Chapter 13A, which [shall be accepted by all tax
7 districts and ]shall allow for:
8 a. A combined net profits and gross receipts occupational license
9 taxes return or separate forms for a net profits occupational
10 license tax return and a gross receipts occupational license tax
11 return by all business entities; and
12 b. A payroll occupational license tax return, for returns of payroll
13 taxes by all business entities[returns of net profits and gross
14 receipts occupational license taxes by all business entities unless
15 the tax district opts out from acceptance in accordance with
16 subsection (2) of this section or is exempted under subsection (3)
17 of this section].
18 2. For business entities to have the information necessary to ensure the
19 proper payment of the taxes to each tax district, the Secretary shall also
20 develop and update as necessary:
21 a. Instructions [or a set of instructions ]for business entities on the
22 completion of the standard [form or ]forms; and
23 b. Fillable portable document format versions of each of the
24 standardized forms developed pursuant to subparagraph 1. of
25 this paragraph[so that business entities have the current
26 information necessary to ensure the proper payment of the tax to
27 each tax district].
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1 (b) The Secretary shall seek advice and comments on the development,
2 amendment, and maintenance of the [form or ]forms and instructions from an
3 advisory committee chaired by the Secretary, or his or her designee, that is
4 composed of:
5 1. One (1) member of the Secretary of State's staff;
6 2. Two (2) members submitted by the Kentucky League of Cities;
7 3. Two (2) members submitted by the Kentucky Association of Counties,
8 at least one (1) of which shall be a current elected county
9 judge/executive;
10 4. Two (2) members submitted by the Kentucky Society of Certified
11 Public Accountants;
12 5. One (1) member submitted by the Kentucky Association of County
13 Treasurers and Finance Officers;
14 6. One (1) member submitted by the Associated General Contractors of
15 Kentucky;
16 7. One (1) member submitted by the Kentucky Association of Master
17 Contractors;
18 8. One (1) member submitted by the National Federation of Independent
19 Business;
20 9. One (1) member submitted by the Associated Builders and Contractors
21 of Indiana/Kentucky;
22 10. Two (2) members submitted by the Kentucky Occupational License
23 Association; and
24 11. One (1) member submitted by the Kentucky School Boards
25 Association.
26 (c) The advisory committee shall:
27 1. Meet at the call of the chair;
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1 2. Convene before August 31, 2026, for the first meeting, and as
2 necessary thereafter;
3 3. Develop any new forms, returns, and instructions required in this
4 subsection before June 1, 2027; and
5 4. File the completed forms to the Legislative Research Committee for
6 referral to the Interim Joint Committee on Local Government by June
7 24, 2027.
8 (d) Within fourteen (14) days after the July 2027 Interim Joint Committee on
9 Local Government meeting, the Secretary of State shall submit a proposed
10 administrative regulation to the Legislative Research Committee in
11 accordance with KRS Chapter 13A, which includes the forms and electronic
12 links required in this subsection.
13 (e) This subsection shall not be interpreted to require the development or
14 adoption of a new form if the Secretary of the State determines that an
15 existing form satisfies the requirements of paragraph (a) of this subsection.
16 [a representative from the Kentucky Association of Counties, the Kentucky
17 League of Cities, the Kentucky Occupational License Association, the
18 Kentucky School Boards Association, the Kentucky Society of Certified
19 Public Accountants, urban-county governments, and consolidated local
20 governments, and a representative of business entities appointed by the
21 Secretary.
22 (c) During the development of the proposed initial form or forms, the Secretary
23 of State shall report in writing to the Interim Joint Committee on Local
24 Government on the progress of the development process. When the proposed
25 administrative regulation is filed with the Legislative Research Commission
26 pursuant to KRS Chapter 13A, the Secretary of State shall also submit a copy
27 thereof, via regular or electronic mail, to the members of the Interim Joint
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1 Committee on Local Government or, if during a session of the General
2 Assembly, to the members of the House Standing Committee on Local
3 Government and the Senate Standing Committee on State and Local
4 Government. The submission to the members shall include a note from the
5 Secretary of State stating that the members may submit any comments
6 regarding the proposed administrative regulation in accordance with the
7 deadline established in KRS 13A.270(1)(c).
8 (d) Notwithstanding KRS 13A.290(6)(a), after full review by the Administrative
9 Regulation Review Subcommittee, the Legislative Research Commission
10 shall assign the administrative regulation to the Interim Joint Committee on
11 Local Government for consideration or, if during a session of the General
12 Assembly, to the House Standing Committee on Local Government and the
13 Senate Standing Committee on State and Local Government.]
14 (f)[(e)] Once the standard[ form or] forms are adopted or amended, the
15 Secretary of State shall include the[ form or] forms, instructions, electronic
16 links to the fillable portable document format versions of the forms, and any
17 updates on the one-stop business portal or another public website maintained
18 by that office, along with information submitted to the Secretary of State
19 pursuant to subsection (2) or (3) of this section. The[ form or] forms and
20 instructions shall be updated and maintained by the Secretary of State at no
21 cost to the tax districts. A[No] fee shall not be levied against the public or
22 businesses for accessing and downloading forms, instructions, or other
23 information maintained by the Secretary of State under this section.
24 (2) After the[ form or] forms are adopted under subsection (1) of this section but prior
25 to July 1, 2029[July 1, 2017], a tax district shall:
26 (a) [may ]Adopt the standard[ form or] forms as its exclusive electronic return[
27 form or] forms;[,]
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1 (b) [may ]Accept the standard[ form or] forms electronically in addition to the tax
2 district's own return form or forms; or
3 (c) 1. Opt out from adopting or using the forms in paragraphs (a) and (b) of
4 this subsection if it has:
5 a. An online filing and payment system in use on or before January
6 1, 2025; or
7 b. Entered into a binding contract for the implementation of an
8 online filing and payment system on or before July 1, 2026.
9 2. If a tax district opts out under subparagraph 1. of this paragraph, in
10 addition to providing online access to the electronic filing and
11 payment system it uses on its own website that permits the electronic
12 submission of forms and the electronic remittance of payments, and in
13 order to maintain its exemption, it shall provide:
14 a. An electronic link to access its online filing and payment
15 system[, or may elect to opt out of accepting the standard form or
16 forms through adoption of a written order by the tax district's
17 governing body. If a tax district elects not to accept the standard
18 form or forms, it shall forward the following information] to the
19 Secretary of State for inclusion on the one-stop business portal or
20 another public website maintained by that office;[:]
21 b.[(a)] A copy of the written order specifying that the tax district
22 has a qualifying online filing system in use and will not accept
23 the standard[ form or] forms within thirty (30) days of its
24 adoption; and
25 c.[(b)] A copy of occupational license tax forms that the tax district
26 accepts, any accompanying instructions, and any future
27 amendments to those forms, [and ]instructions, and electronic
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1 links within thirty (30) days of any change.
2 (3) A tax district that accepts the standard forms for filing under subsection (2)(a) or
3 (b) of this section shall have nine (9) months from the final approval date of an
4 administrative regulation establishing any new or amended standard forms to
5 comply with the provisions of those subsections.
6 (4)[(3)] After July 1, 2029[July 1, 2017], a tax district:
7 (a) Shall either adopt the standard[ form or] forms as its exclusive electronic
8 return[ form or] forms or accept the standard [form or ]forms in addition to
9 the tax district's own return form or forms, unless:
10 1.[(a)] The tax district submits a written request approved by the tax
11 district's governing body to the Secretary of State for an exemption
12 based on documented information that:
13 a. Acceptance of the form will impose an undue financial hardship
14 on the tax district; or
15 b. The tax district is part of an interlocal agreement that provides
16 for a single tax collection process for multiple jurisdictions; and
17 2.[(b)] The Secretary of State approves the request for an exemption and
18 obtains the return[ form or] forms that will be accepted by the tax
19 district and any applicable instructions for inclusion on the one-stop
20 business portal or another public website maintained by that office. In
21 exercising his or her discretion to grant an exemption under this
22 subsection, the Secretary of State may impose any reasonable terms and
23 limitations upon the exemption;
24 (b) Shall provide on its official website or other means for business entities to
25 access and download the forms, returns, instructions, and methods of
26 acceptable electronic payment of its occupational license taxes in a way that
27 the forms and returns may be electronically completed and submitted to the
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1 tax district by the taxpayer;
2 (c) Shall allow a taxpayer who files the forms or returns electronically to pay
3 the tax due with the form or return by an automated clearinghouse
4 electronic funds transfer directly to the tax district's designated depository
5 account or by any other approved electronic method;
6 (d) May charge and collect from the taxpayer an additional electronic
7 processing fee and any fee or surcharge to recover the actual costs incurred
8 by the taxing district in connection with the electronic filing, processing,
9 security, maintenance, and acceptance of electronic payments, including
10 costs imposed by third party vendors or financial institutions;
11 (e) Shall provide an electronic receipt to the taxpayer upon the successful
12 electronic filing of the form or return and payment; and
13 (f) If approved by an annual application with the Secretary of State, shall not
14 be subject to the provisions of paragraphs (b) to (f) of this subsection if the
15 tax district:
16 1. Collected less than two hundred thousand dollars ($200,000) during
17 the immediately preceding fiscal year from the combined levy of all
18 types of occupational license taxes in the immediately preceding fiscal
19 year; or
20 2. Submits reasonable evidence that the cost of compliance with this
21 paragraph would exceed more than five percent (5%) of the taxing
22 district's total annual budget.
23 (5)[(4)] Upon receipt of an order pursuant to subsection (2) of this section or upon the
24 issuance of an exemption under subsection (4)[(3)] of this section, the Secretary of
25 State shall provide notice to the Kentucky Society of Certified Public Accountants
26 of the tax districts that have submitted a written order to opt out under subsection
27 (2) of this section or that are granted an exemption under subsection (4)[(3)] of this
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1 section.
2 (6)[(5)] The Secretary of State shall[, only upon the request of a tax district,] include
3 electronic links for the electronic[ filing of] downloading of forms and electronic
4 links for the online tax filing payment system provided to it under this section on
5 the one-stop business portal or other website maintained by the Secretary of State
6 within thirty (30) of receipt from the tax district[ with the local tax district by no
7 later than July 1, 2017].
8 (7)[(6)] Nothing in this section or KRS 67.766 shall be interpreted to alter or preempt
9 the requirements imposed by a tax district regarding deadlines, reporting, rates, or
10 other legally imposed procedures regarding the imposition, administration, and
11 collection of local occupational license taxes by a tax district. Nor shall the
12 adoption or use of a standard[ form or] forms developed under this section release
13 the taxpayer from any liability or responsibility to the tax district for the correct
14 payment of taxes, penalties, and any other obligations imposed by the tax district.
15 This section and KRS 67.766 shall not be interpreted to authorize the collection of
16 local tax revenues by the state government or any other agency of the state.
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