Opinion
Opinion By: Albert B. Chandler III, Attorney General; Amye L. Bensenhaver, Assistant Attorney General
Open Records Decision
The question presented in this appeal is whether the City of Shepherdsville and the Shepherdsville-Bullitt County Tourist & Convention Commission properly relied on a local ordinance, KRS 131.190, and KRS 61.878(1)(a), (c), (i), (j), and (l), in denying Verlin Flaherty's February 27, 2001, request for "the names and locations of the businesses that are delinquent on the payment of their food/ restaurant taxes." For the reasons that follow, we find that the public agencies' reliance on the cited authorities was misplaced.
In a response dated February 27, the city denied Mr. Flaherty's request. In support, the city invoked City Ordinance 997-415, Section 9, which provides:
Any information, including returns, documents, or payments made pursuant hereto and any other information gained by the Collector or any other official, agent, or employee of the city as a result of any return, investigation, hearing or verification required or authorized by this ordinance shall be confidential; except, in accordance with proper judicial order, and any person or agent divulging such information shall, upon conviction, be subjected to a fine of not less than Fifty dollars ($ 50.00) nor more than Five Hundred dollars ($ 500.00) or imprisonment not to exceed Thirty (30) days, or both, at the discretion of the court, and upon conviction shall be dismissed from employment by the city.
Mr. Flaherty was advised that if litigation was initiated against a restaurant delinquent in paying its taxes, "the information will become public." One day later, Chairman Mark E. Edison, Shepherdsville-Bullitt County Tourist & Convention Commission, denied Mr. Flaherty's request, advising him that the information he seeks "is established by City of Shepherdsville Ordinance as confidential. " Additionally, he advised:
Because of ongoing activity by the Shepherdsville City Attorney concerning collection of tax dollars, this information is not in its final form and . . . is exempt pursuant to KRS 61.878(1).
From these denials, Mr. Flaherty appeals. Having reviewed the arguments advanced by the City of Shepherdsville and the Shepherdsville-Bullitt County Tourist & Convention Commission, we find that the agencies improperly withheld records reflecting the names and addresses of businesses delinquent in paying their restaurant taxes.
In 94-ORD-64, the Attorney General determined that the City of Pikeville improperly relied on a local ordinance in denying a request for the identities of delinquent occupational taxpayers, but properly withheld the amount of the taxes owed since disclosure of the latter revealed the taxpayers' business affairs. There, we observed:
This Office has consistently recognized that occupational license records are open to public inspection to obtain the names and addresses of licensees. OAG 82-435; OAG 84-93; OAG 85-1; OAG 87-57; 92-ORD-1119. At page 2 of OAG 84-93, we observed:
Hence, the public is entitled to know what business and professions have been licensed to exist and operate within the boundaries of the governmental unit. We have also recognized that nothing in the Open Records Act prohibits the disclosure of the fact that a person is delinquent in paying his or her occupational tax. OAG 81-309. "Whether taxes are being paid by all persons who are legally obligated to pay them is a legitimate interest of the public and any person has a right to check on that matter." OAG 82-435, at p. 3.
Nevertheless, we have held that the public's right of inspection is not unlimited. The public cannot have access to information about a license which is made expressly confidential. KRS 131.190(1) prohibits the release of certain tax records, and provides:
Records disclosed to the City to obtain an occupational license or collect a license fee, such as social security number and federal identification numbers, remain confidential, and are exempt from public inspection. OAG 82-2; OAG 84-93. Information which reveals the affairs of the business, such as profits, taxes, deductions, and salaries, is also exempt. To the extent that disclosure of the amount of tax paid or owing, or the penalty assessed reveals the private details of the taxpayer's business, it is not subject to disclosure.
94-ORD-64, p. 2, 3; see also, 96-ORD-96; 97-ORD-22; 00-ORD-117.
The existence of a city ordinance mandating the confidentiality of "all information obtained . . . in the administration of [the occupational license fee] ordinance . . ." did not alter our conclusion that the names and addresses of delinquent occupational taxpayers must be disclosed. On this issue, the Attorney General observed:
This Office has repeatedly stated that a city cannot, by ordinance or any other device, regulate access to records in a manner which conflicts with the Open Records Law. In OAG 82-435, at page 2, we observed:
See also, OAG 82-518, at p. 1 ("The Mayor does not have the authority to countermand the requirements of the Open Records Law" ); 92-ORD-1136.
On its face, the Ordinance enacted by the City of Pikeville does not appear to conflict with the Open Records Law. In many respects, it follows the language of KRS 131.190(1). As interpreted and applied by the City Clerk, however, we believe the Ordinance runs counter to a long line of opinions of this Office interpreting the Open Records Law and the exceptions to it in this particular context. We therefore conclude that the City's reliance on Ordinance 0-91-016 and KRS 61.878(1)(c)1.c. was partially misplaced, and direct it to release the names of delinquent taxpayers. The City need not release the amount of the penalty assessed to each taxpayer.
94-ORD-64, p. 4; see also 00-ORD-117, p. 7 ("Unless it is consistent with one or more of the exceptions to public inspection found in the Open Records Act, a promise of confidentiality has no legal effect").
Applying this reasoning to the appeal before us, we find that the City of Shepherdsville's ordinance does not abrogate or supercede the mandatory disclosure provisions of the Open Records Act as construed in the cited open records decisions. Although we have not had occasion to address these issues in the context of a request for delinquent restaurant taxes, we believe that this reasoning yields the same result. In OAG 83-315, the Attorney General recognized that "a transient room tax imposed by a city and county or by either one individually pursuant to KRS 91A.390 to fund the operations of a Tourist and Convention Commission is a license or occupational tax." OAG 83-315, p. 2, citing Ky. Const. Section 181;
City of Lexington v. Motel Developers, Inc., Ky., 465 S.W.2d 253 (1971), and OAG 82-26. KRS 91A.400 authorizes cities of the fourth and fifth class to enact a restaurant tax. That statute provides:
In addition to the three percent (3%) transient room tax authorized by KRS 91A.390, the city legislative body in cities of the fourth and fifth classes may levy an additional restaurant tax not to exceed three percent (3%) of the retail sales by all restaurants doing business in the city. All moneys collected from the tax authorized by this section shall be turned over to the tourist and convention commission established in that city as provided by KRS 91A.350 to 91A.390.
It too, is a license or occupational tax, and whether the tax is "being paid by all persons who are legally obligated to pay them is a legitimate interest of the public . . . ." OAG 82-435, p. 3. The Attorney General has thus determined that the public's interest in what businesses are taxed, where they are located, and whether they are delinquent in paying their taxes (but not the amount of taxes owed or any other information that reveals the affairs of their businesses), is superior to any privacy interest asserted. Notwithstanding City Ordinance 997-415, Section 9, we find that the City of Shepherdsville and the Shepherdsville-Bullitt County Tourist & Convention Commission improperly withheld records containing "the names and locations of businesses that are delinquent on the payment of their food/ restaurant taxes." 1
A party aggrieved by this decision may appeal it by initiating action in the appropriate circuit court pursuant to KRS 61.880(5) and KRS 61.882. Pursuant to KRS 61.880(3), the Attorney General should be notified of any action in circuit court, but should not be named as a party in that action or in any subsequent proceedings.
Footnotes
Footnotes
1 Both the City and the Commission also rely on KRS 61.878(1)(c), (i), and (j) in denying Mr. Flaherty's request, but fail to sustain their statutory burden of proof relative to the invocation of these exceptions. KRS 61.880(2)(c); see 00-ORD-117. Accordingly, we cannot affirm their denials on these bases.