Request By:
Mr. Stephen W. Towler
Superintendent
Ashland Public Schools
1420 Central Avenue
Ashland, Kentucky 41101
Opinion
Opinion By: Bteven L. Beshear, Attorney General; Robert L. Chenoweth, Deputy Attorney General
As the Superintendent of the Ashland Public Schools you have asked the Office of the Attorney General for a formal advisory opinion on two questions relating to the Utility Gross Receipts License Tax for schools authorized pursuant to KRS 160.613. You have asked the following two questions:
1. Once the 3% Utility Gross Receipts License Tax is imposed, may the effective rate of the tax be reduced by the Board of Education?
2. May the local Board of Education impose the 3% Utilities Tax for a specified amount of time, i.e., a predetermined number of years?
We are of the opinion an affirmative answer is appropriate for each of your questions.
We wish to take up your second question first. We are of the belief that a local board of education may establish a predetermined number of years a Utility Gross Receipts License Tax will be levied. Although we cannot point to any section of law that specifically so provides, we think a strong argument exists for concluding that a local board has such discretionary powers. To support this conclusion we note the discussion of the
Kentucky Court of Appeals in Fendley v. Board of Education of Oldham Co. Sch. Dist., Ky., 240 S.W.2d 837 (1951), regarding the discretion of a local board of education in preparing a resolution for a special school building tax rate under KRS 160.477. See also OAG 78-354, copy attached. The Court of Appeals took the position that the board of education had large discretionary powers that included levying a tax for an indefinite number of years to come, even though the project which prompted the tax rate had been completed. By like token, we believe the Court, in Fendley, impliedly concluded that the board of education could have contained a limitation in the resolution adopted as to the number of years the tax would run.
Just as there is nothing in KRS 160.477 as to the number of years the tax may be levied, as we noted earlier, there is no time limit specified in KRS 160.613 for the Utility Gross Receipts License Tax. We believe the local board of education has discretion to adopt a resolution calling for the levying of a Utility Gross Receipts License Tax for an indefinite number of years to come or to prescribe a predetermined number of years for existence of the tax.
As to your first question, we believe ample support for our conclusion may be found in KRS 160.635 which reads:
"School taxes imposed under the provisions of KRS 160.593 to 160.597, 160.601 to 160.633, and 160.635 to 160.648 shall remain in full force and effect from year to year until the board of education reduces the rate in effect."
This section applies to a Utility Gross Receipts License Tax for schools. Clearly, the provision authorizes a local board of education to reduce the rate in effect. Thus, we see no reason why a school board is prohibited from decreasing the tax rate below the maximum 3% if, in the board's discretion, such a decrease is deemed warranted.