Request By:
Mr. Clinton H. Newman II
Assistant State Treasurer
Treasury Department
Frankfort, Kentucky 40601
Opinion
Opinion By: Steven L. Beshear, Attorney General; By: Charles W. Runyan, Assistant Deputy Attorney General
The Treasury Department is responsible for making quarterly city occupational tax payments to various Kentucky cities. You are referring to city occupational taxes imposed by cities, pursuant to § 181, Kentucky Constitution, covering those persons carrying on an occupation within the city.
City of Louisville v. Fischer Packing Company, Ky., 520 S.W.2d 744 (1975).
KRS 82.090 reads:
(1) The legislative boards and councils of the cities of this Commonwealth are hereby severally authorized by ordinances applying to occupations generally to impose occupational taxes upon all state employes and officers whether appointive or elective, for services performed therein, except those elected officers who are paid on a per diem basis.
(2) Except as provided in subsection (1) of this section, no person shall be relieved from liability for any occupational license tax levied for revenue purposes by any legislative board or council of a city of this Commonwealth by reason of his carrying on his occupation or performing services on any state property or area within the bounds of such city.
The actual city tax deductions are made from state employees' paychecks through the Department of Finance UPPS payroll system (Unified Payroll System) implemented in January, 1982.
Your question is this:
Is the Commonwealth of Kentucky under any legal obligation to furnish the cities with a listing of state employees from whom city taxes have been withheld and the appropriate amounts?
It is our understanding that the information just referred to will be available in the Unified Payroll System as of January 1, 1983. Your question covers the calendar year of 1982.
As relates to the sought informational breakdown in terms of specific state employees subject to various city occupational taxes and the precise total amount of tax deducted from their payroll checks in 1982, such information can be supplied by manual means from the payroll personnel in the various state departments. But you are asking whether the state is required to furnish the cities with that data.
In
Commissioners of Sinking Fund v. Estate of Doyle, Ky.App., 573 S.W.2d 932 (1979), the Court of Appeals held that under KRS 68.185 and 68.180 a fiscal court could delegate the assessment and collection of the county's occupational tax to the Sinking Fund of the city of Louisville.
It is our opinion that KRS 82.090, when viewed as a whole, by strong implication makes the state a tax collecting unit for those affected cities. This view is supported by the relational fact that the state employees subject to particular city occupational taxes are recipients of their state salary checks. This view is buttressed by the fact that the state deduction system promotes the effective and orderly enforcement of the cities' revenue tax. Thus this implied power to require the state to make the deductions from state payroll is necessary and incident to the express power of levying the occupational tax.
City of Louisville v. Fischer Packing Company, Ky., 520 S.W.2d 744 (1975) 746. In addition, the state's deduction of city occupational taxes under KRS 82.090 has been going on for many years. Thus contemporaneous construction of the statute may be resorted to, since the administrative authorities in charge of the payroll system in the Departments of Finance and Treasury have continued to give the statute the construction of requiring state payroll deductions for the city occupational taxes. See
Burbank v. Sinclair Prairie Oil Co., 304 Ky. 833, 202 S.W.2d 420 (1947). See also
Commissioners of Sinking Fund v. Hopson, Ky.App., 613 S.W.2d 621 (1980).
CONCLUSION
1. The Commonwealth of Kentucky by implication is required under KRS 82.090 to deduct from state employees' payroll checks applicable city occupational taxes.
2. In order to implement the above payroll deduction system and city enforcement of the occupational tax liability, the state, through its departmental payroll personnel, should furnish the applicable cities for the calendar year 1982 with a listing of state employees from whom city occupational taxes have been withheld and the actual amounts withheld in each individual case.