Occupational tax issue to resurface this summer

While local leaders in Corbin and Laurel County have monitored with interest attempts in the Kentucky General Assembly to pass legislative amendments that would change the laws on annexation, it’s a measure that has not been filed yet that could have the biggest impact of all.

An amendment Kentucky Senate President Robert Stivers (R-Manchester) successfully pushed through in both 2012 and 2014 that has prevented the city of Corbin from collecting any occupational tax revenue from its Knox County side is set to expire on July 15. Stivers said Tuesday that he’s doubtful he can do anything to intervene this time around.

Negotiations over a state budget have broken down in recent days.

Stivers added that he plans to work with leaders in Corbin and Knox County to come to some sort of resolution to the impasse regarding occupational tax collections.

About 23 percent of Corbin’s citizens live in Knox County. It’s been estimated that between $800,000 and just over $1 million is collected in occupational taxes from the Knox County portion of the city.

None of that money goes to the city of Corbin.

The city of Corbin unsuccessfully fought the law in the courts, calling it “special legislation.”

In 2012, the “Stivers Amendment” was added to HB 499, a “tax amnesty” bill that was eventually signed into law by Kentucky Gov. Steve Beshear.

Before the “Stivers Amendment” was initially passed, Corbin was awaiting only a lower court declaration regarding the population of Knox County before beginning to collect the tax. Since previous rulings had already decided the issue, it was destined to go Corbin’s way.

Corbin passed a citywide one percent occupational tax in 2005. Through an agreement with the Whitley County Fiscal Court, the city keeps 75 percent of revenue garnered from the tax in the Whitley County side of Corbin. But city leaders have never been able to reach a similar agreement with Knox County leaders, and so never collected the tax. Knox County passed its tax in 1999. Corbin filed a lawsuit in 2008 to settle a dispute over the issue.

Stivers has argued that to allow Corbin to collect the tax would gut Knox County’s ability to provide services to its citizens.

He added Tuesday that he’s helped Corbin in various ways through the state’s transportation budget and elsewhere to help offset the occupational taxes it was unable to collect over the four year period.