Tax Amnesty Program Annouced; Begins Oct. 1

Commonwealth of Kentucky

Finance and Administration Cabinet

Steven L. Beshear, Govenor

Lori H. Flanery, Secretary

CONTACT:   

Pamela Trautner, 502-564-4240; 502-545-1440

pamela.trautner@ky.gov

FOR IMMEDIATE RELEASE

Kentucky Announces Tax Amnesty Program

Delinquent taxpayers can avoid fees, penalties and prosecution;

needed revenue generated for the Commonwealth

Frankfort, Ky. (Sept. 20, 2012) – Kentucky is launching a Tax Amnesty program allowing people or businesses who owe back taxes to the Commonwealth of Kentucky to pay with no fees or penalties.  The threat of prosecution will be waived, and only half the interest owed will be due. 

"This program will generate much-needed revenue for vital services in Kentucky at a time when dollars are hard to come by," said Finance and Administration Cabinet Secretary Lori H. Flanery.  "At the same time, we are making sure that delinquent taxpayers pay their fair share." 

The 61-day program kicks off October 1, 2012.   Delinquent taxpayers will soon receive mailed notifications stating the known amount of back taxes.  They have until the end of November 2012 to apply for amnesty and pay their overdue taxes.

However, if taxpayers fail to take advantage of the amnesty program, penalties get more severe and the interest escalates.  An additional 2 percent interest will be charged on unpaid amnesty-eligible taxes.  Taxpayers taking advantage of amnesty must remain current over the next three years or face reinstated penalties, fees and interest. 

The General Assembly authorized the amnesty program in the 2012 legislative session.  Kentucky conducted a similar tax amnesty program in 2002.  More than 23,000 taxpayers participated, netting more than $40 million in back taxes.

"We're making it as easy as possible for people to determine if they owe back taxes and to create multiple ways to pay," said Tom Miller, Commissioner, Kentucky Department of Revenue.  "They can mail in the payment or use a credit card.  They can pay at any of our 10 offices around the state, or they can pay online using a website we have created just for Tax Amnesty."

The website – amnesty.ky.gov provides news and information about the program, online payment options and a way to search for all persons and businesses on the delinquent tax roll. Anyone with questions can also call the Tax Amnesty toll-free hotline at 855-KYTAXES (855-598-2937). 

The amnesty program applies to taxes owed only to the Kentucky Department of Revenue for eligible tax periods ending after December 1, 2001 and prior to October 1, 2011.  While most on the delinquent taxes roll reside in Kentucky, the list includes people in all 50 states plus several other countries. 

"This is a great opportunity for delinquent taxpayers to reestablish themselves as compliant," according to Mack Gillim, Executive Director, Office of Processing and Enforcement with the Kentucky Department of Revenue.  "It's not only a fresh start for them, but it also helps those who comply every day with all the tax laws by creating an equitable distribution of the tax burden.  We're all in this together." 

While the current database shows nearly 170,000 individuals and businesses qualifying for tax amnesty, others may also owe back taxes.  The list of delinquent debtors includes those businesses and individuals who have a tax lien on file, but does not include those who may owe taxes and have not filed.  The state is continuously gathering taxpayer information to discover non-filers and under-reporters.

To spread the word about Tax Amnesty, an advertising and public relations campaign will take place across the Commonwealth.  Governor Beshear will hold a news conference in Frankfort revealing more details on the kickoff day, October 1, 2012.  Ads will appear in newspapers and magazines and on websites.  TV and radio commercials will generate awareness and Department of Revenue officials will make presentations to numerous groups and public events.

"It's safe to say that if you owe taxes, you will hear about the amnesty program," said Secretary Flanery. 

###

Governor's Blue Ribbon Commission on Tax Reform Meeting Summary

By Rachel Phelps

As you know the Governor's Tax Reform Commission met today to receive the independent report from their consultants.  Their report is to be used as a tool in the Commission issuing a final report but is not to be taken as a final recommendation by any means.  There are still several meetings left in the coming weeks before the Commission will issue a report and any recommendations.  We have been at the meeting all afternoon and they just released the report to the public so aside from our notes, we haven't had the opportunity to digest the report and that is true for the Commission members, as well.  The consultants were very strong in their statements that they are presenting options and not recommendations.

As you can see from the article and from the executive summary, a lot is put on the table - just about every option is covered in some way.  For that reason, we would caution getting too excited or exercised over any one piece of it until the Task Force and all other interests have an opportunity to absorb.  It is one thing to write it and another to consider it as a recommendation, and still another to try and pass it through the General Assembly. 

We would point out a couple of options that may be of interest--a gross receipts tax to replace the corporate income tax and the LLET.  It is shown as revenue neutral, stating it could be set at 1/3 of 1% to generate the same as the corporate income taxes.  The report lists the local option sales tax as an option to consider.  In addition some services are also listed that could be brought under the sales tax.  The report suggests as an option moving to a single sales factor.  In response to questions from the Commission the consultants noted they did not include some revenue raisers, like the cigarette tax, because it increases a set rate but does not broaden the base.  They also did not address issues related to the road fund.

Download the Executive Summary from the report which includes the options and the scoring on those options HERE.

August Tax Receipts

The Office of the State Budget Director Mary Lassiter released the August 2012 monthly tax receipts today. You can download a copy of her press release and charts HERE. The highlights are as follows:

- General Fund receipts were up 2.5% compared to August 2011. This basically cancels out the decline from July 2012 receipts leaving revenues flat through the first two months of this Fiscal Year. To meet the revenue projections for this Fiscal Year per the state budget, tax receipts need to grow 2.8% over the next 10 months.

- The more surprising news is that Road Fund revenues were down 2.9% in August 2012 compared to August 2011. This is the first month of declining Road Fund revenues in 25 months stretching back to June 2010. The main reason for the decline was that motor vehicle usage tax was down 13.5%. In order to meet Fiscal Year 2013 projections of a 3.9% increase, Road Fund revenues need to grow 3.9% over the remaining 10 months.

2013 Legislative Calendar

The Legislative Research Commission released the 2013 Regular Session calendar today. A copy of the press release and a link to a copy of the calendar is below. Here are the highlights:

- The 2013 session will be an odd-year "short" 30-day session compared to the 60 day even-year sessions. These short sessions begin with a 4-day organizational session, where the House and Senate will elect new leadership, determine committee chairs, and assign members to committees. That is currently scheduled to take place January 8-11.

- The General Assembly will then recess until February 5 when they will reconvene and begin the work of considering bills and resolutions until March 11, when they are scheduled to break for the Governor to consider any vetoes. The schedule released today has them returning after the veto recess on March 25 & 26 for the final two days of the session to override any vetoes and finalizing their work. They have some flexibility in the calendar as they don't have to complete their work until March 30 per the constitution.

- Two dates we always circle are the last day for introduction of new bills, which is scheduled for February 15 in the Senate and Feb. 19 in the House.

News Release

September 6, 2012

Calendar set for General Assembly's 2013 session

FRANKFORT – The 2013 Regular Session of the Kentucky General Assembly is scheduled to begin on Jan. 8 and will last 30 legislative days.

As usual during an odd-numbered year, in which sessions are half as long as in even-numbered years, the session will have two parts. The first four days of the session – Jan. 8 to Jan. 11 – will focus on organizational work, such as electing legislative leaders, adopting rules of procedure and organizing committees. The introduction and consideration of legislation can also begin during this time.

The second part of the session begins on Feb. 5, with final adjournment scheduled for March 26.

Legislators will not meet in session on Feb. 18 in observance of Presidents' Day.

The veto recess – the period of time when lawmakers commonly return to their home districts to see which bills, if any, the governor vetoes – begins on March 12. Lawmakers will return to the Capitol on March 25 and 26 for the final two days of the session.

The 2013 session calendar can be viewed online at http://www.lrc.ky.gov/sch_vist/13RS_calendar.pdf

--END--