By Dustin Miller
The A&R Committee met in Frankfort to receive an update on General Fund receipts and a presentation on the Limited Liability Entity Tax.
The A&R Committee met in Frankfort to receive an update on General Fund receipts and a presentation on the Limited Liability Entity Tax.
State Revenue Update
Greg Harkenrider with the Governor's Office Economic Analysis provided an update on state revenues. A copy of his presentation is available HERE and the highlights and key legislative questions are summarized below:
- Expected that June receipts will be up and that receipts overall will be up for the 2018 fiscal year.
- It is expected that Road Fund revenues will be in line with the enacted estimate and that it will be within $10 million. Two notes: gallonage appears to have gone up slightly on motor fuels tax and that although the estimate was accurate the overall revenue was not good to keep up with road fund needs
- Language in HB 487 makes KY look like South Dakota for purposes on online sales tax collection related to the recent US Supreme Court decision. Sets a de minimum standard of $100k in gross receipts or 200 transactions to have economic nexus.
Rep. Fleming asked about Wayfair timing?
Harkenrider - Going to take a prospective approach, so no back taxes. Tough part is reaching out to retailers to get them to register as a retailer in KY for sales tax. Thinks it will be a slow start and told legislators not to get their hopes up for large revenue increases in Kentucky for FY 2019.
Rep. Rudy asked about Wayfair...Estimates?
Harkenrider - Nothing official from GOEA.
Rudy said GAO says $94-140 million per year?
Harkenrider - We think those are a little high because of efforts around streamlined sales tax
Rudy asks if streamlined sales tax program that compensates online vendors for voluntary collection will fall apart?
Harkenrider - Not sure will have to follow up
Rep. Tipton asked about expansion of sales tax and questions from nonprofits and charitable organizations?
Harkenrider - Sales tax expanded to participatory admissions. Legislative intent was to catch for-profit entities. Court case in Feb. said for-profits and not for profits can't be treated separately. Thus charities are caught in this as well. McDaniel said there is interest in fixing this quickly the next time the legislature is in session.
Limited Liability Entity Tax
The LLET- Cost of Goods Sold Definition presentation was provided by Charles George, Kentucky Society of CPAs; Eric Scott, Ernst & Young; and Kevin Doyle, CFO with Congleton-Hacker Company. A copy of their slides are available HERE.