Kentucky Governor’s Red Tape Reduction Initiative Provides Opportunity to Update Tax Regulations
In early July, Kentucky Governor Bevin announced the Red Tape Reduction Initiative. The details of the Initiative can be found here.
The Initiative’s website allows anyone to report a regulation, stating “If you are aware of a regulation that you believe to be outdated, unnecessary or overly complex, let us know by filling out this form. All suggestions will be reviewed and evaluated.”
The Kentucky Department of Revenue has promulgated many tax regulations. However, a good number of these have not been updated in years, even though the underlying statutory provisions that they address have been amended, sometimes multiple times. One example is the lack of an administrative regulation concerning the Limited Liability Entity Tax (“LLET”). Although there is a regulation for the LLET’s predecessor, the Alternative Minimum Calculation, 103 KAR 16:220, there is no LLET regulation.
This Initiative has been endorsed by business leaders and organizations throughout the Commonwealth. The Kentucky Chamber of Commerce and the Kentucky Society of CPAs have encouraged their members to participate.
Obviously, tax practitioners do not necessarily want tax regulations eliminated. They want outdated, unnecessary or overly complex tax regulations replaced with updated, necessary and appropriately tailored regulations, which include examples to make them easier to understand. In the tax area, more regulations are needed, not less.
The Red Tape Reduction Initiative’s website states that “The end goal is to allow businesses to operate in a modernized regulatory system that provides them with the flexibility they need to serve their customers.” Obviously, updated tax regulations come within this goal.
While this Initiative is going on, Kentucky taxpayers should review regulations that are important to them and, if appropriate, request a review of those regulations.