24-ORD-159
July 9, 2024
In re: Campbell County Board of Education/Department of Revenue
Summary: The Department of Revenue (“the Department”) violated
the Open Records Act (“the Act”) when it failed to respond to a request
for records within five business days. The Department also violated the
Act when it withheld records in their entirety under KRS 131.190(1),
instead of redacting the confidential information as required by
KRS 61.878(4).
Open Records Decision
On March 21, 2024, the Campbell County Board of Education (“Appellant”)
requested that the Department provide copies of “[r]ecords from as many years as can
be produced regarding overpayment from” a named taxpayer, “[a]ll records regarding
the [tax] overpayment from 2020 that is currently being discussed,” “[a]ll email
communication records from the [Department and the taxpayer] relating to this
overpayment from 2020,” and “[a]ll records that can be produced for any/each refund
request from” the taxpayer. The request was submitted on the Department’s form
titled “Open Records Request to Inspect Public Records (KRS Chapter 61).” On March
24, 2024, the Appellant’s counsel notified the Department that he believed the
Appellant was entitled to the requested records under KRS 131.190(2)(i). On March
28, 2024, the Appellant inquired as to the status of its request and was informed it
had been referred to “legal.”
After several more inquiries from the Appellant, the Department issued its
final response to the request on April 30, 2024. The Department provided information
about the years and amounts of the taxpayer’s overpayments and the status of refund
requests, but denied the Appellant’s request for records because “divulging
information made confidential under KRS 131.190(1) . . . falls outside the scope of the
Department’s authority to share information with a school district affected by a
refund request.” This appeal followed.Under the Act, a public agency has five business days after receiving a request
for public records in which to fulfill or deny the request. KRS 61.880(1). Here, the
Department admits it did not make that determination within five business days but
claims it did not do so because it did not regard the Appellant’s request as having
been made under the Act. However, the Appellant used the Department’s own “Open
Records Request” form, which expressly cites KRS Chapter 61.1 Thus, there is no
credible basis for a belief that the Appellant was not making a request under the Act.
Alternatively, the Department claims it complied with KRS 61.872(5) by telling
the Appellant the request was being reviewed by counsel. Under KRS 61.872(5), “[i]f
the public record is in active use, in storage or not otherwise available, the official
custodian shall immediately notify the applicant and shall designate a place, time,
and date for inspection of the public records, not to exceed five (5) days from receipt
of the application, unless a detailed explanation of the cause is given for further delay
and the place, time, and earliest date on which the public record will be available for
inspection.” Here, however, the Department did not claim the records were in active
use, in storage, or not otherwise available. Further, the Department did not inform
the Appellant of the earliest date on which records would be available for inspection.
Instead, the Department merely told the Appellant the request was under review for
an indefinite period and issued a denial2 more than five weeks after receipt of the
request. Thus, the Department did not comply with the requirements of KRS
61.872(5). Accordingly, the Department violated the Act when it failed to respond
timely to the Appellant’s request.
In its final response, the Department denied the request under
KRS 131.190(1). That statute, which is incorporated into the Act by KRS 61.878(1)(l),
prohibits the disclosure of certain tax information. Specifically, it provides that “[n]o
. . . person, 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
[D]epartment 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.” KRS 131.190(1) (emphasis added).
The Appellant, however, claims to be entitled to view the requested records
under another provision. KRS 160.613 and KRS 160.614 authorize school districts to
levy a gross receipts license tax on certain utility service providers and users,
1
A public agency must timely respond to a request for public records under KRS 61.880(1),
regardless of whether the request expressly cites the Act. See, e.g., 15-ORD-215.
2
Although the Department provided the Appellant with information, the Appellant’s request under
the Act was for copies of records. The Act applies to requests for records, not for information. See KRS
61.872. Thus, because the Department merely provided information and not records, it denied the
request under the Act.including the taxpayer related to the records at issue here. Under KRS 160.6156, an
entity that has made an overpayment on the tax levied by a school district may seek
a refund by making a written request to the Department and sending a copy to the
school district. KRS 131.190 contains an exception to the prohibition on disclosing
taxpayer information under 131.190(1), permitting the Department to provide “any
utility gross receipts license tax return information that is necessary to administer
the provisions of KRS 160.613 to 160.617 to applicable school districts on a
confidential basis.” KRS 131.190(2)(i) (emphasis added). The Appellant claims all the
requested records are “information necessary to administer” the gross receipts tax
and should therefore have been confidentially provided by the Department.
Specifically, the Appellant argues the disclosable information includes copies of the
returns and other records submitted by the taxpayer, as well as “correspondence and
communication between Taxpayer and [the Department] that might tend to prove or
refute whether Taxpayer has complied with the provisions of KRS 160.6156(2).”3
The Department, however, claims the Appellant has misinterpreted
KRS 131.190(2)(i), which “was enacted at the request of the Department in 2005 to
facilitate administration” of the gross receipts tax. Under KRS 160.6154(1), the
Department has “all the powers, rights, duties, and authority with respect to the
collection, refund, and administration of [the gross receipts tax], except as otherwise
provided in KRS 160.613 to 160.617.” These powers and duties include authorizing
refunds “in consultation with the chairman or finance officer of the district board of
education,” KRS 160.6156(3)(a), and making the refunds and adjusting distributions
to the school districts to reflect refunds paid, KRS 160.6156(4). According to the
Department, KRS 131.190(2)(i) “allows the Department to provide taxpayer
information when making monthly distributions of taxes collected to the school
district.” The Department does so by providing an “Allocation and Distribution
Report” to the school district “that identifies the names of the taxpayers, the account
numbers, the period, and the distribution amount broken down by tax, interest and
any applicable penalties.” It is this specific information the Department considers
“necessary” to provide to the school district, within the meaning of KRS 131.190(2)(i),
“under the electronic filing and distribution system in place for the collection and
administration of the [tax] by the Department.”
When it requested records from the Department, the Appellant stated its
purpose was “to verify that the overpayment is indeed legitimate, and investigate
why consistent overpayments are being made.” But the Appellant cites no statutory
provision assigning to a school district the authority or responsibility to conduct such
independent verifications or investigations. On the contrary, the plenary authority to
authorize refunds rests with the Department, while the school district serves in a role
of “consultation.” KRS 160.6156(3)(a). Thus, it is not apparent why the requested
3
KRS 160.6156(2) requires a taxpayer seeking a refund to submit a request identifying “the amount
requested, the applicable period, and the basis for the request.”records would be “necessary” for the Department to disclose under KRS 131.190(2)(i).
In an open records appeal, the Office “will generally defer to the public agency in its
interpretation of confidentiality provisions which are binding upon it” if that
interpretation is reasonable. 21-ORD-006 n.2 (quoting 05-ORD-186). Accordingly, the
Office concludes KRS 131.190(2)(i) does not require the Department to provide the
requested records to the Appellant.
However, the Appellant did not request the records under KRS 131.190(2)(i),
but under the Act. Thus, the question is not whether the Appellant as a school district
is entitled to the records, but whether the requested records are exempt from
disclosure to the public under KRS 131.190(1). Under KRS 61.880(2)(c), the
Department bears the burden of proof that the withheld records are exempt.
Under KRS 61.878(4), “[i]f any public record contains material which is not
excepted under this section, the public agency shall separate the excepted and make
the nonexcepted material available for examination.” When considering a claim of
taxpayer privacy under KRS 131.190(1), it is necessary to weigh the “legislatively
recognized policy of protecting the affairs of the taxpayer and the taxpayer’s business
against the competing public interest of the [Act].” Dep’t of Revenue v. Eifler, 436
S.W.3d 530, 533 (Ky. App. 2013). The public interest in disclosure of tax records is
the need to determine that “the burden of public expenses is equitably distributed”
among taxpayers, that a taxpayer “is meeting his public responsibilities . . . and legal
obligation,” and that “public servants are carrying out their duties in an efficient and
law-abiding manner.” 10-ORD-184 (quoting Attorney General v. Collector of Lynn, 385
N.E.2d 505 (Mass. 1979)). In weighing those competing interests, “[t]he courts
continue to favor openness of records and the ability to redact private information
which is exempt under the statute.” Eifler, 436 S.W.3d at 533; see also 23-ORD-199.
A tax record that contains both exempt and non-exempt information must be redacted
“however limited the information may be once redacted.” 18-ORD-046 (quoting
Kenton Cnty. Fiscal Ct. v. Kentucky Enquirer, No. 2008-CA-002064-MR, 2010 WL
890012 (Ky. App. 2010)).
Exempt information under KRS 131.190(1) includes Social Security numbers,
federal identification numbers, and information that “reveals the private details of
the taxpayer’s business,” such as “profits, taxes,4 deductions, and salaries.” 07-ORD-
255; 01-ORD-63; 94-ORD-64. It does not include information that is “in any way made
a matter of public record.” KRS 131.190(2)(b). Thus, for example, the name and
location of a business is not exempt from disclosure. See, e.g., 07-ORD-255; 01-ORD-
63. Therefore, the question is whether any of the requested records can be redacted
to protect information that is confidential under KRS 131.190(1).
4 As a school district, the Appellant is obviously able to obtain certain information about taxes under
KRS 131.190(2)(i).Here, the Appellant requested all records pertaining to overpayments and
refund requests from the taxpayer, including emails between the Department and
the taxpayer regarding the 2020 overpayment. The Department describes the
responsive
records
as
“the
taxpayer’s
returns,
audit
workpapers[,]
and
correspondence between the taxpayer and the Department.”
Regarding “the taxpayer’s returns,” the Department has not explained why it
is unable to redact information that is confidential under KRS 131.190(1). Rather,
“the redaction of private information on the tax returns c[an] be accomplished as
well.” Eifler, 436 S.W.3d at 533. Similarly, the Department has not explained why
the “audit workpapers and correspondence” cannot be redacted to mask the
information made confidential by KRS 131.190(1). Thus, the Department has not met
its burden of proof under KRS 61.880(2)(c). Accordingly, the Department violated the
Act when it withheld records in their entirety instead of producing them in redacted
form.5
A party aggrieved by this decision may appeal it by initiating an action in the
appropriate circuit court pursuant to KRS 61.880(5) and KRS 61.882 within 30 days
from the date of this decision. Pursuant to KRS 61.880(3), the Attorney General shall
be notified of any action in circuit court, but shall not be named as a party in that
action or in any subsequent proceedings. The Attorney General will accept notice of
the complaint emailed to OAGAppeals@ky.gov.
Russell Coleman
Attorney General
/s/ James M. Herrick
James M. Herrick
Assistant Attorney General
#271
Distributed to:
Jason V. Reed, Esq.
Bethany Atkins Rice, Esq.
Ms. Sherry D. Dungan
Ms. Maurette Harris
5
The Department also cites KRS 61.878(1)(a), which exempts from disclosure “[p]ublic records
containing information of a personal nature where the public disclosure thereof would constitute a
clearly unwarranted invasion of personal privacy.” However, the Department has not articulated any
personal privacy interests at issue beyond those protected by KRS 131.081(15) and KRS 131.190(1).