Request By:
Mr. Neal Smith
Todd & Smith
204 Scott Avenue
P.O. Box 112
Pikeville, Kentucky 41501
Opinion
Opinion By: David L. Armstrong, Attorney General; By: Susan G. Leavenworth, Assistant Attorney General
You have made an inquiry of this office concerning the application of the utility gross receipts tax provided for in KRS 160.613. You set out the following facts:
"There is a portion of property located near the Floyd County line that adjoins Pike County but this portion of property is not immediately contiguous to Floyd County. Nevertheless the only road by which one can gain access to the property is through Floyd County. The property which is approximately ten (10) acres is called Little Floyd. It seems that several years ago the Pike County Property Valuation Administrator and the Floyd County Property Valuation Administrator agreed to allow these people to pay their property taxes in Floyd County in exchange for the Floyd County Magistrate in that area caring for the roads and providing other services to these people. Floyd County does not have a utility school tax and the children in the community attend Betsy Layne High School in Floyd County.
However, the residents are still assessed a utility tax by the Kentucky Power Company as prescribed by law for the Pike County School District. They are now requesting that they be exempt from the utility tax because they pay their taxes in Floyd County even though they are residents of Pike County."
It must be stated at the outset that there is no legal authority for the payment of property taxes to a county other than the county in which the property is located. It is the duty of the PVA to assess all property in his county. KRS 132.420. He then prepares a tax roll. KRS 132.530. Using that tax roll, the county clerk then should prepare a correct tax bill for each taxpayer in the county whose property has been assessed. KRS 132.550; KRS 133.220. Thus, the arrangement between the Pike County PVA and the Floyd County PVA you describe has no valid legal basis. Therefore, a request for a tax exemption based upon that arrangement has no validity either.
This conclusion would seem to dispose of the exemption request except that I note that you indicate that these people send their children to school in Floyd County. So the question remains whether they are in the taxing district. The utility gross receipts tax, as you know, is levied by the school board. It is a district wide tax, not necessarily a county wide tax. See KRS 160.045. Therefore, if the school district coincides with the county lines, then there can be no basis for an exemption.
A final point to note is that the utility gross receipts tax is not actually a tax on the consumer, but rather is a tax on the utility itself. However, the utility does have the statutory authority to pass on the tax to the consumer. KRS 160.617. I mention this only to point out that there is no statutory basis for providing an exemption to any consumer.
To summarize, if the residents of Little Floyd are within the boundaries of the Pike County School District then they are obligated to pay the utility gross receipts tax. However, the fact that they are residents of Pike County does not automatically mean that they are residents of the school district.