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New Legislation Changes Property Taxes Collection Procedures and Other Tax Laws

03.25.2009

Enacted on March 24, 2009, H.B. 262 makes omnibus revisions to KRS Chapter 134, styled “Payment, Collection and Refund of Taxes,” by amending, repealing, and creating various sections.

H.B. 262 makes changes to the collection of delinquent personal property taxes and clarifies who may make payments on tax bills and certificates of delinquency to the sheriff or the county clerk. Certain sections are also amended to clarify collection and reporting processes and procedures for sheriffs. In this regard, H.B. 262 provides that the sheriff's commission is paid whether the taxes are collected by the sheriff or the county clerk and moves the administration of sales of certificates of delinquency from the sheriff's office to the county clerk’s office.

H.B. 262 provides that the Commonwealth will no longer be required to purchase these certificates. It also establishes procedures for third-party purchasers to register with the Kentucky Department of Revenue (“Department”) and county clerks prior to participating in the sale of certificates of delinquency.

H.B. 262 also amends KRS Chapter 131 by creating a new section containing lien provisions relating to taxes other than property taxes and repeals such provisions currently contained in KRS Chapter 134.

The general effective date of the H.B. 262 is January 1, 2010, while its provisions apply to taxes and related assessments imposed on or after January 1, 2009.

H.B. 186 amends KRS 132.0225 which provides that when a city sets a rate that will produce more than four percent (4%) in additional revenue over the compensating amount provided in KRS 132.010, the city must establish its rate within forty-five (45) days from the date the county tax roll is certified. H.B. 186 exempts from this deadline cities that do not elect to have the sheriff collect their ad valorem taxes.

H.B. 186 also amends KRS 132.285 to clarify procedures related to a city’s use of county ad valorem assessments. When the county property valuation administrator files a claim for costs of the assessments, as allocated under KRS 132.285, a certified recapitulation of all property assessed on the tax roll must be provided with the claim. Also, KRS 132.285(2) is amended to set forth various types of municipal governments whose chief executive officer receives the recapitulation, such as a charter county, unified local government, or consolidated local government, and is also amended to require that the mayor of any city using the county’s assessment receives the recapitulation.

H.B. 202 changes the dates of reporting and assessment of corporate watercraft subject to ad valorem tax. Previously, KRS 136.1801 required a corporation to file a detailed description of all watercraft with the Department by January 1 of each year and required the Department to send notices of assessment by July 1 of the year. H.B. 202 changes the reporting deadline to May 15 and provides that the Department sends notices of assessment on the watercraft “as soon as possible” after local tax rates are provided to the Department by the applicable tax district.

H.B. 340 adds a new provision to KRS 132.485 governing the consent to assessment on motor vehicles. This provision provides that when a vehicle is purchased in one year but registration occurs after January 1 of the following year through no fault of the owner, then the Department will assess the motor vehicle as provided under KRS 186A.035 and send the notice of assessment to the owner as of January 1. Such an assessment must be protested within forty-five (45) days of the date of the notice.

H.B. 87 updates the definition of “Internal Revenue Code” contained KRS 67.750, related to businesses taxed by local tax districts to the Internal Revenue Code, as amended on December 31, 2008.

If you have questions about this topic or any other legal issue, please contact any member of the firm's State and Local Tax Team.

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