Opinion
Opinion By: Jack Conway, Attorney General; Michelle D. Harrison, Assistant Attorney General
Open Records Decision
At issue in this appeal is whether the City of Mt. Vernon violated the Kentucky Open Records Act in denying Richard Courtney's July 13, 2010, request to be provided with a list "by business name or person[']s name . . . of people who have delinquent occupation tax & the amount owe [sic] (by year past due)." 1 In a timely written response, City Clerk Jeanette Robinson denied Mr. Courtney's request "[p]ursuant to the privacy exemption in KRS 61.878(1)(b)-(d) and by legislative enactment KRS 67.790(8)(a)." Mr. Courtney subsequently initiated this appeal, noting his belief that "[e]very year property tax delinquent names & amounts owed are published in the newspaper my request is no different." In accordance with prior decisions of this office interpreting KRS 131.190(1) and 67.790(8)(a), this office finds that Mr. Courtney is entitled to know the name (and location) of the business in question, as well as whether the business is delinquent in paying its taxes, but is not entitled to know the amount of the taxes owed or any other information such as profits, deductions, and salaries, which reveals the "affairs of the business."
Upon receiving notification of Mr. Courtney's appeal from this office, Martha Alexander, legal counsel for the City in this case, responded on its behalf, initially observing that her client interpreted his request "to be one for tax documents" which "contain information such as name, addresses, phone numbers, as well as details concerning the type of business that each taxpayer is engaged in and are required from all businesses that operate within the city." In her view, the information contained in such records "is both personal and exempted from disclosure by KRS 61.878," specifically KRS 61.878(1)(a). 2 Because occupational tax records also contain "information relating to the entities['] business activities," Ms. Alexander asserted, "the City has no duty to provide even redacted records." In support of this position, the City relied upon 01-ORD-63, 09-ORD-015, and OAG 82-2. According to Ms. Alexander, "KRS 61.878(1)(c)[2.c. and d., respectively] likewise applies in this case as the City maintains the records and requires businesses to pay occupation taxes in conjunction with the regulation of commercial enterprise and for the grant of a license to do business." In the alternative, "KRS 61.878(1)(d) also prevents the disclosure of the requested record as names of people owing occupational taxes could reveal previously undisclosed prospective plans for a business to establish itself within the City."
While all of these statutory exceptions apply in the City's view, Ms. Alexander contended that KRS 67.790(8)(a), incorporated into the Open Records Act by operation of KRS 61.878(1)(l), is "perhaps the most on point." In support of the City's position regarding KRS 67.790(8)(a), Ms. Alexander cited 09-ORD-015, acknowledging that information sought in that case "was different than that sought here," but arguing that "the rationale for denying" access to "it is the same." Disclosure of the information sought, Ms. Alexander continued, "does nothing to further the purposes of the Open Records Act and invades the privacy of the individuals whose records are the subject of the request." As Ms. Alexander correctly observed, in 09-ORD-015 this office recognized that "'[t]o 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. '" 09-ORD-015, p. 2(citation omitted). In the City's view, the information requested "falls squarely within the bounds of that statement and KRS 67.790(8)."
In reference to Mr. Courtney's objection regarding publication of property tax information, which is publicly accessible in local newspapers, Ms. Alexander correctly observed that "'information is no less private simply because it is available elsewhere,'" quoting
Zink v. Commonwealth of Kentucky, Department of Workers' Claims, 902 S.W.2d 825 (Ky. App. 1994). 3 Again relying upon Zink, Ms. Alexander also reiterated that disclosure of the records being sought would not "further the purpose of the Open Records Act" as the information contained therein only reveals "which businesses are failing in their duty to the City," does not "subject the City's action to public scrutiny," and "would result only in the disclosure of personal information." This office finds, in accordance with governing precedents, that none of the provisions relied upon prohibit disclosure of the name (or location) of a business or the fact that a business is delinquent in paying any taxes owed; however, the amount of taxes owed "reveals the private details of the taxpayer's business," and is therefore statutorily protected.
Contrary to the City's assertion, it is a well-established principle that whatever privacy interest a taxpayer may have is clearly outweighed by the public's right to know whether the city is properly executing its duty to collect taxes and prosecute delinquent taxpayers. 97-ORD-22, p. 2. In 04-ORD-010, a copy of which is attached hereto and incorporated by reference, this office was asked to determine whether the Martin County Occupational Tax Administrator violated the Open Records Act in denying the request of a reporter from The Big Sandy News "to inspect records containing the names of the businesses and individuals who are, and are not, paying the recently imposed Business and Occupational Tax." Relying upon 01-ORD-63, the Attorney General concluded that the City's expansive interpretation of KRS 131.190 (which KRS 67.790(8) largely mirrors) 4 ran counter to a long line of decisions interpreting the Act and KRS 61.810(1)(a) specifically in this context.
Elaborating upon the general principle that disclosure of the information contained in an occupational license does not constitute an unwarranted invasion of personal privacy, the Attorney General observed:
Hence, the public is entitled to know what businesses 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, 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 expressly made confidential. KRS 131.190(1) prohibits the release of certain tax records, and provides: [See footnote 4]
Records disclosed to the City to obtain an occupational license or collect a license fee, such as social security number [s] and federal identification numbers, remain confidential, and are exempt from public inspection. OAG 82-2; OAG 84-93. Information which reveals the affairs of businesses, such as profits, taxes, deductions, and salaries, is also exempt. To the extent that disclosure of the amount 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, pp. 2, 3; See also 96-ORD-96; 97-ORD-22; 00-ORD117.
The existence of a city ordinance mandating the confidentiality of "all information obtained . . . in the administration of [the occupational license fee] . . ." did not alter our conclusion that the names and addresses of delinquent occupational taxpayers must be disclosed. On this issue, the Attorney General observed:
04-ORD-010, pp. 9-10, quoting 01-ORD-63, pp. 3-4.
More recently, the General Assembly enacted KRS 67.790(8)(a) , pursuant to which:
No present or former employee of any tax district shall intentionally and without authorization inspect or divulge any information acquired by him or her of the affairs of any person, or information regarding the tax schedules, returns, or reports required to be filed with the tax district or other proper officer, or any information produced by a hearing or investigation, insofar as the information may have to do with the affairs of the person's business. This prohibition does not extend to information . . . in any way made a matter of public record . . . .
(Emphasis added.) With regard to application of this provision, the analysis contained in 07-ORD-255, a copy of which is attached hereto and incorporated by reference, is controlling. Neither KRS 131.190(1) nor KRS 67.790(8)(a) can properly be construed "to erect an impenetrable barrier" to disclosure of business licensing records; however, the qualifying language in each provision, "insofar as the information may have to do with the affairs of a person's business," is identical and our analysis is therefore the same. The qualifying language quoted above has expressly been construed to encompass, for example, information such as profits, taxes, deductions, and salaries. 07-ORD-255, p. 6; see 09-ORD-015 (extending protection of both provisions to names of subcontractors appearing on IRS Form 1099 as that information did have "to do with the affairs of" the business).
Although nothing in the Open Records Act prohibits disclosure of the fact that a business is delinquent in paying any taxes, which 04-ORD-010 and 07-ORD-255 confirm, the amount of taxes owed, in contrast, "reveals the private details of the taxpayer's business," and is therefore protected from disclosure under these confidentiality provisions. See 08-ORD-143. 5 Whether a business and occupational license tax is "'being paid by all persons who are legally obligated to pay [it] is a legitimate interest of the public . . . .'" Id., p. 5, citing OAG 82-435, p. 3; 04-ORD-010. The Attorney General has therefore determined that the public's interest in which businesses and individuals are being taxed, where they are located, and "whether they are delinquent in paying their taxes (but not the amount of the taxes owed or any other information that reveals the affairs of their businesses), is superior to any privacy interest asserted." Id. Accordingly, the City violated the Open Records Act in declining to provide Mr. Courtney with access to existing records containing the names of businesses which are delinquent in paying their occupational taxes but properly withheld the amounts owed, which may reveal the "affairs of the person's business" in violation of KRS 67.790(8)(a). Pursuant to KRS 61.878(4), the City may redact private information such as date of birth, social security number, etc. per KRS 61.878(1)(a), and other information, which "may have to do with the affairs of the person's business," if any, though none of that information was even requested here.
This office is not persuaded that either KRS 61.878(1)(c)2.(c. or d.) 6 or 61.878(1)(d) 7 alter this conclusion as the limited information at issue (name and whether delinquent) does not satisfy the precondition for invocation of the former, and the latter is facially inapplicable. Shortly after the enactment of KRS 61.878(1)(c)1. and 2., this office recognized that "[i]t is incumbent on an agency which relies on this provision to establish that the [disputed] records were confidentially disclosed to the agency, are generally recognized as confidential or proprietary, such that disclosure would permit an unfair commercial advantage to competitors, and that the records were submitted either in conjunction with an application for a loan, in conjunction with an application for the administration of assessments, incentives, inducements, and tax credits, in conjunction with the regulation of a commercial enterprise, or for the grant or review of a license to do business." 93-ORD-22, p. 4. The City's original response to Mr. Courtney's request was entirely devoid of any showing, and its supplemental response only improved marginally on that response by making a bare claim relative to KRS 61.878(1)(c)2. and (1)(d). The Open Records Act makes it clear that a public agency "bears the burden of proof. Thus, any lack of evidence should be construed in favor of the requestor of the public document" per KRS 61.880(2)(c). Kenton County Fiscal Court v. Kentucky Enquirer, above. First and foremost, the record on appeal contains no proof whatsoever that the specific information requested was "confidentially disclosed to [the City] or required by [the City] to be disclosed to it," a precondition to invocation of KRS 61.878(1)(c)2.a., b., c., or d. In the absence of such proof, and in accordance with all of the authorities referenced above, this office finds that even assuming the unspecified records containing the information requested were "confidentially disclosed to" the City, the names (and locations) of the businesses and their delinquency status cannot be properly characterized as "generally recognized as confidential or proprietary. " Accordingly, KRS 61.878(1)(c) 2. does not apply.
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 proceeding.
Richard CourtneyJeannette RobinsonGary CromerJerry CoxMartha Alexander
Footnotes
Footnotes
1 Although the City was not statutorily required to create such a list if none currently existed (see 04-ORD-010, pp. 5-6), the City did not raise this argument. In any event, while a requester cannot require a public agency to compile information, a public agency does have to make any existing nonexempt documents which are potentially responsive to a request available for inspection and copying in the alternative. Id.
2 Ms. Alexander noted that KRS 61.878(1)(b) was inadvertently cited in support of the City's denial and withdrew its citation of that exception as the City does "not contend that the tax records sought by Mr. Courtney are being maintained for scientific research."
3 It suffices to say that Zink, though not ultimately dispositive, validates the City's position in this regard.
4 KRS 131.190 contains exceptions to the general rule that information acquired in tax administration is not to be divulged. Pursuant to KRS 131.190(1):
No present or former commissioner or employee of the Department of Revenue, present or former members of a county board of assessment appeals, present or former property valuation administrator or employee, present or former secretary or employee of the Finance and Administration Cabinet, former secretary or employee of the Revenue Cabinet, or any other person, shall intentionally and without authorization inspect or divulge any information acquired by him of the affairs of any person, or information regarding the tax schedules, returns, or reports required to be filed with the department or other proper officer, or any information produced by a hearing or investigation, insofar as the information may have to do with the affairs of the person's business. This prohibition does not extend to information . . . in any way made a matter of public record . . . .
(Emphasis added.)
5 The Kentucky Court of Appeals recently held, consistent with prior decisions by this office, that "[w]hile items which reveal the affairs of the business are exempt from disclosure according to the clear language of KRS 67.790(8)(a)," it is incumbent on the public agency "to disclose any and all information appearing upon the [occupational license] application as it relates to what professions or businesses are licensed to operate and which does not reveal the affairs of any person or affairs of the business, and to redact that information which does. KRS 67.790(8)(a). KRS 61.878(4)." Kenton County Fiscal Court v. Kentucky Enquirer, 2010 WL 890012, p. 4 (Ky. App. March 12, 2010) (No. 2008-CA-002064-MR). In so holding, the Court agreed that the phrase "affairs of the business" includes the information listed above ("profits, salaries, deductions, and taxes," none of which the requested application contained), and that the social security number and date of birth of the sole proprietor of the business were properly redacted. The Court did not specifically address delinquency status but did note that the name and location of a business are not protected.
Although this opinion is an unpublished opinion which, in accordance with CR 76.28(4)(c), cannot be cited or used as authority in any other case in any court of this state, that rule also provides that "unpublished Kentucky appellate decisions, [such as Kenton County Fiscal Court v. Kentucky Enquirer ] rendered after January 1, 2003, may be cited for consideration by the court if there is no published opinion that would adequately address the issue before the court."
6 In relevant part, KRS 61.878(1)(c)2. excludes from application of the Act:
Upon and after July 15, 1992, records confidentially disclosed to an agency or required by an agency to be disclosed to it, generally recognized as confidential or proprietary, which are compiled and maintained:
c. In conjunction with the regulation of commercial enterprise, including mineral exploration records, unpatented, secret commercially valuable plans, appliances, formulae, or processes, which are used for the making, preparing, compounding, treating, or processing of articles or materials which are trade commodities obtained from a person; or
d. For the grant or review of a license to do business.
7 KRS 61.878(1)(d) excludes from application of the Act:
Public records pertaining to a prospective location of a business or industry where no previous public disclosure has been made of the business' or industry's interest in locating in, relocating within or expanding within the Commonwealth. This exemption shall not include those records pertaining to application to agencies for permits or licenses necessary to do business or to expand business operations within the state, except as provided in paragraph (c) of this section.
(Emphasis added.) Because the italicized language removes the kind of records which contain the information requested from application of this exception unless the records fall within paragraph (c), and these would not, further analysis is unwarranted.