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Kentucky Board of Tax Appeal Does Not Have Jurisdiction Over Facial Constitutional Challenge


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The Kentucky Board of Tax Appeals (“KBTA”) recently held that it did not have jurisdiction over a facial constitutional challenge of a statute. Revelation Energy v. Kentucky Dep’t of Revenue, Order No. K-24660, File No. K13-R-08 (Ky. Bd. Tax App., June 24, 2014). Revelation Energy, a taxpayer of special fuels taxes and petroleum environmental assurance fees, claimed a refund for the special fuel purchases it made from 2009-2011. Revelation Energy claimed the refund pursuant to KRS 138.144(1), which allows for a reimbursement of taxes paid on gasoline or special fuel for non-highway unlicensed vehicles or equipment.

The Department of Revenue (“Department”) partially denied Revelation Energy’s refund claim, only allowing a refund for the period after Revelation Energy obtained a refund permit and it went into effect. The Department claimed that KRS 138.580(8) and KRS 138.345 both require a taxpayer to have a refund permit before obtaining a refund. Revelation Energy agreed that these statutes were controlling and did have a refund permit provision, but Revelation Energy argued that these statutes were unconstitutional under the Kentucky Constitution and the United States Constitution. Revelation Energy claimed the statutes violated the due process and equal protection clauses of the Commonwealth’s constitution as well as the federal constitution.

The KBTA held that it does not have jurisdiction to determine whether a statute is constitutional on its face. Pointing to precedent that holds that administrative agencies may not decide constitutional issues, the KBTA dispensed with the case by upholding the Department’s final ruling. The KBTA noted, however, that Revelation Energy had preserved all arguments for further appellate review.


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