Friday, July 15, 2016

Notes on refund of City taxes

KRS 134.590 Refund of ad valorem taxes or taxes held unconstitutional. 

(1) *
(2) *

(3) If a taxpayer pays city, urban-county, county, school district, consolidated local government, or special district ad valorem taxes to a city, urban-county, county, school district, consolidated local government, or special district when no taxes were due or the amount paid exceeded the amount finally determined to be due, the taxes shall be refunded to the person who paid the tax.

(4) Refunds of ad valorem taxes shall be authorized by the mayor or chief finance officer of any city, consolidated local government, or urban-county government for the city, consolidated local government, or urban-county government or for any special district for which the city, consolidated local government, or urban-county government is the levying authority, by the county judge/executive of any county for the county or special district for which the fiscal court is the levying authority, or by the chairman or finance officer of any district board of education.

(5) Upon proper authorization, the sheriff or collector shall refund the taxes from current tax collections he or she holds. If there are no such funds, the district's finance officer shall make the refunds. The sheriff or collector shall receive credit on the next collection report to the district for any refunds the sheriff or collector makes.

(6) No refund shall be made unless each taxpayer individually applies within two (2) years from the date payment was made. If the amount of taxes due is in litigation, the taxpayer shall individually apply for refund within two (2) years from the date the amount due is finally determined. Each claim or application for a refund shall be in writing and state the specific grounds upon which it is based. No refund for ad valorem taxes, except those held unconstitutional, shall be made unless the taxpayer has properly followed the administrative remedy procedures established through the protest provisions of KRS 131.110, the appeal provisions of KRS 133.120, the correction provisions of KRS 133.110 and 133.130, or other administrative remedy procedures.

(7) *


Maximum Machine Co. v. City of Shepherdsville, 17 SW 3d 890, (Ky. 2000)

"Neither party has cited, nor do we find, any statutory provision or ordinance governing claims for a refund of the occupational tax. Consequently, Appellants' claims for a refund must be based in common law. Inland Container Corp. v. Mason County Board of Education, et al., Ky., 6 S.W.3d 374 (1999); see also Martin Marietta Aluminum, Inc. v. Hancock County Board of Education, 806 F.2d 678 (6th Cir.1986).

"In Great Atlantic and Pacific Tea Company v. City of Lexington, 256 Ky. 595, 76 S.W.2d 894, 895 (1934), our predecessor court stated:

Money paid without consideration and which in law, honor, or good conscience was not payable ought in law, honor, and good conscience to be recoverable, and that rule applicable to transactions between individuals should be generally made applicable to municipalities and other governments. Only very compelling reasons of public policy relieve the state and its subdivisions from being required to live up to the same moral standards demanded of individuals and to repay taxes collected without authority of a valid law. 

"Pursuant to Martin Marietta, supra, the common law authorizes a tax refund when: (1) the taxing statute or regulation is invalid and the tax payments were submitted involuntarily, or (2) the taxing authority has engaged in misrepresentation. Id. at 683. See also City of Louisville v. Louisville Taxicab & Transfer Co., 238 S.W.2d 121 (1951)."

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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