Occupational fee to increase to 1.25 percent

The new occupational license fee, which raises the tax rate per $100 earned by employees that work in the county is now a done deal with the passage of the amended ordinance last Thursday by Clinton Fiscal Court. (A separate article on the court meeting can be found beginning on page 1.)

Prior to the special call meeting of the court Thursday, March 5, a public hearing was held on the occupational tax issue and only a few local residents braved the late winter snow storm and below freezing temperatures to attend the session, which allowed citizens to voice their opinions on the proposed new rates prior to a final vote being taken.

There was some verbal opposition to the increase on the occupational tax, but during the hour-long hearing, a lot of questions were put forth, as well as several opinions and much discussion on the county’s financial outlook and how revenues could be raised or how the county could save money in general.

Former road supervisor Jim Penneycuff was among the residents–and the first up–to speak, saying he didn’t like tax increases but understood the necessity for it. He further said he didn’t like the county “shoveling money” into accounts, addeing the county should try and see that is stopped. He said allocated money should be used for that purpose.

Judge/Executive Richard Armstong noted it was legal to switch general fund money to different accounts and Treasurer Dallas Sidwell also noted it was a standard use, noting the annual fiscal year budget could be amended throughout the year at any time, adding “if we (county) were flushed with money, we wouldn’t have to do it (make transfers from one account to another to meet expenses.)

What concerned most residents that were in attendance was the collection rate of the current occupational tax, with most inferring it wasn’t fair that most people–individuals and businesses–paid the tax while others who are obligated to do so weren’t paying. At one point, one resident even said, “I didn’t know the tax was voluntary.”

Judge Armstrong explained, however, that since he began office, and even some months before, himself and Tax Administrator Virginia Conner, who was not present for the hearing, were working hard to get the collection rate up, noting they were also going back to try to “pick up” what is owed.

Armstrong said there had been a few thousand letters sent and also said many people have come in to begin paying the occupational fee.

Al Gibson, owner of Gibson Printing Company and the Clinton County News, was in opposition to the tax increase, stating he felt all other options (such as collecting all the current fees from persons responsible for paying) should be exhausted before the additional tax is imposed.

The judge/executive again noted the cost of operating the EMS (ambulance service) and jail, saying the county needed to see what kind of revenue would be coming in and noted that since Amedysis has been billing for the ambulance service, they were now at a 92 percent collection rate. He also noted the occupational license fee collections had risen from as low as around 40 percent to close to a current 80 percent.

Armstrong also estimated the county was putting in hundreds of thousands of dollars annually to help fund the ambulance service and jail.

There was also questions once again about whether or not closing the jail would help the county financially, as those discussions were held several months ago during the previous administration.

Magistrate Mickey Riddle said that by closing the jail and transporting inmates to nearby facilities could cut the jail budget in half.

Armstrong, however, noted that closing the jail would cost about 17 jobs (the current total of jail employees) and also noted the cost of transportation to other counties. In the end, however, he did leave open the options to explore all possibilities for saving the county money.

One resident also suggested a possible “wheel tax” which some other area counties in both Kentucky and Tennessee have in place, putting a set fee on all workers where everybody, not just some, would have to pay the same share.

More discussion centered around the jail, including collecting booking from inmates. Judge Armstrong noted on that issue that if it were up to him, if an inmate came before the (circuit or district) judge and owed $2,000 in booking fees, they would either pay the fee or go back to jail.

There was also talk about using inmates for work release programs.

Discussion again switched back to the problem most residents felt should be fixed–collecting the fee from everyone who under the ordinance–is supposed to pay and ways of keeping track of those who are or aren’t paying. It was noted that there are fines and fees that the county attorney’s office can deal with in collecting current and back taxes–up to five years.

Armstrong also suggested to those on hand that if they knew of someone not paying the fees, they should give the county judge’s offices the names.

County Attorney Michael Rains supplied the NEWS with a copy of the ordinance and specifically noted the “penalty” section under KRS 67.790, which reads for the most part:

(1) A business entity subject to tax on net profits may be subject to a penalty equal to five percent (5 percent) of the tax due for each calendar month or fraction thereof if the business entity: (a) Fails to file any return or report on or before the due date prescribed for filing or as extended by the (county.). (b) Fails to pay the tax computed on the return or report before the due date prescribed for payment. The total penalty levied pursuant to this subsection shall not exceed 25 percent of the total tax due; however, the penalty shall not be less than $25.

(2) Every employer who fails to file a return or pay the tax on or before the date prescribed…may be subject to a penalty in the amount equal to five percent of the tax due for each calendar month or fraction thereof. The total penalty levied pursuant to this subsection shall not exceed 25 percent of the total due; however, the penalty shall not be less than $25.

(3) In addition to the penalties prescribed in this section, any business entity or employer shall pay, as part of the tax, an amount equal to 12 percent per annum simple interest on the tax shown due, but not previously paid, from the time the tax was due until the tax is paid. A fraction of a month is counted as an entire month.

(4) Every tax imposed by this ordinance, and all increases, interest, and penalties thereon, shall become, from the time the tax is due and payable, a personal debt of the taxpayer to the (county).

(5) The (county) may enforce the collection of the occupational tax due under section (3) of this ordinance and any fees, penalties, and interest as provided in subsections 1-4 by civil action in a court of appropriate jurisdiction. To the extent authorized by law, the (county) shall be entitled to recover all court costs and reasonable attorney fees incurred by it in enforcing any provision of this ordinance.

(6) In addition to the penalties prescribed in this section, any person, business entity or employer who willfully fails to make a return, willfully makes a false return, or who willfully fails to pay taxes owing or collected, with the intent to evade payment of the tax or amount collected, or any part thereof, shall be guilty of a Class A misdemeanor.

(7) Any person who willfully aids or assists in, or procures, counsels, or advises the preparation or presentation under, or in connection with, any matter arising under this ordinance of a return, affidavit, or other document, which is fraudulent or is false as to any material matter, whether or not the falsity or fraud is with the knowledge or consent of the person authorized to present the return, affidavit, claim, or inducement, shall be guilty of a Class A misdemeanor.

A copy of the Occupational License Fee Ordinance in its entirety can be viewed at the Clinton County Judge-Executiv’es office during normal business hours

Fiscal court members listened as Jim Pennycuff addressed the court last Thursday afternoon during a one-hour long public hearing that was designed to solicit comments regarding a proposed increase in the rate of the occupational tax. During the meeting that followed the hearing, the court voted 4-2 to increase the tax rate to 1.25 percent.