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Lemurs and Camels and Tax Bills, Oh My!

03.12.2008

On occasion, one could liken the legislative session in Kentucky to a trip down the proverbial “Yellow Brick Road” in Oz. On March 11, 2008, the House Appropriations and Revenue Committee replaced the existing text of H.B. 262, which would have provided a sales tax exemption for lemurs, with several proposals for both new and increased taxes. H.B. 262 is seen as a companion to and meant to provide funds “needed” to balance the Budget Bill, H.B. 406. Both Bills were reported favorably out of Committee on March 11, 2008.

Most notably, the House Committee substitute to H.B. 262 would increase the cigarette tax, now at $.30 a pack, by $.25 to a total of $.55 per pack. It would also increase the tax on other tobacco products, which is currently at 7.5% by 6.75% to 14.25%. A floor stock tax would also be due on the increase in cigarette and tobacco taxes.

H.B. 262, as modified by the House Committee Substitute, would also extend the sales tax to the following five services: (1) commercial janitorial services, including carpet, upholstery, and window cleaning; (2) armored car services; (3) security services; (4) chartered air flights, if a pilot is furnished, including hot air balloon flights; and (5) commercial linen services (excluding commercial uniform services and commercial linen services provided to hospitals and nursing homes).

The Bill would modify how and when motor fuel taxes are calculated. The changes would generally result in higher motor fuel taxes.

It has also been reported that H.B. 569, which, as currently proposed, would amend KRS 139.480, to exempt camel feed from sales and use tax, and could be used as a vehicle for the so-called “stream saver” bill, which seeks to prevent filling streams with waste associated with mining.

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