Sunday, May 22, 2016

The unique status of Louisville Metro

 Many of life's little mysteries can be answered by reading the Kentucky Revised Statutes.

Louisville Metro's Occupational payroll license fees are clearly income taxes, even if in order to ignore Kentucky's Constitution it is necessary to pretend they are not. If you work in Jefferson County you have to pay 1.25% of your gross income as a "license fee" for the privilege of working in Jefferson County.

On top of this you have to pay an additional 0.20 % for the transit fund. If you also reside in Jefferson County another 0.75% of your gross pay is deducted from every paycheck to fund the Jefferson County Public School system.

So, if you both live and work in Jefferson County, local payroll deductions add up to 2.20% of gross pay, unless you work in one of the several local small cities that impose their own Occupational License fees.

West Buechel, for example, has its own 1.50% payroll fee for work done within the City. These happy workers have to pay all the above. Both Louisville Metro Occupational fees and West Buechel's fees are payroll deductions.

Prior to the consolidation of Jefferson County and the City of Louisville, people who worked in West Buechel would not have paid Louisville's Occupational fees, because they did not work in Louisville, and they would have received a credit against any Jefferson County Occupational fees if they paid West Buechel's Occupational fee. KRS 68.197.

However, these days KRS 67C.101(2)(d) provides:
"A consolidated local government is neither a city government nor a county government as those forms of government exist on July 15, 2002, but it is a separate classification of government which possess the greater powers conferred upon, and is subject to the lesser restrictions applicable to, county government and cities of the first class under the Constitution and general laws of the Commonwealth of Kentucky."
The credit provisions of KRS 68.197 do not apply to the Occupational fees of Louisville Metro.

Specifically, KRS 68.197(7) provides, "persons who pay a county license fee and a license fee to a city contained in the county shall be allowed to credit their city license fee against their county license fee."

KRS 68.002 (1) defines a County to include, "a charter county government."

Louisville Metro is not a charter county government and pursuant to KRS 67C.1012(d), Louisville Metro is not a city or a county either. As mentioned, the city-county credit provisions of KRS 68.197 do not apply to the Occupational fees of Louisville Metro.

Therefore, those who live anywhere in Jefferson County and who are employed within the City limits of West Buechel pay both West Buechel and Louisville Metro Occupational fees, totaling . . . 3.7% of gross.

The really bad news is the fact you can count on West Buechel to piss that money away foolishly, and to be ungrateful to receive it.

Tom Fox, J. D.
Southern Specialty Law Publishing Company
Louisville, Kentucky

A division of Accountable Kentucky Incorporated
a Kentucky Non-profit corporation

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This is not legal advice and I am not a lawyer.

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