Legislation asking Kentucky voters to give local governments the flexibility to enact a local sales tax came out of a House committee Thursday
The Kentucky League of Cities has been lobbying for a local sales tax option for municipalities for several years. If the measure makes it through the general assembly, the question will then go to voters. League Executive Director J.D. Chaney said local governments need more revenue.
“We got to keep up with the wage pressures that exist right now. If you look at the state’s proposed budgets that’s been circulating, we see pay increases for state employees, state troopers. Local governments have those same pressures with regard to the wages,” said Chaney.
Shannon Stiglitz with the Kentucky Retail Federation spoke in opposition to the bill. Stiglitz noted sales taxes impact consumer behavior.
“Consumers shop with their feet and so how that impacts consumer behavior and how that creates an unlevel playing field for our members,” said Stiglitz.
Stiglitz adds retailers currently collect $2.3 billion dollars in state sales taxes.
J.D. Chaney said it’s about giving municipalities more flexibility in generating local revenues. He says, currently, local governments rely on property and payroll taxes to support services paid by local citizens. Chaney said a local sales tax would garner revenues from visitors to communities. The League of Cities official is optimistic about full House passage.
Chaney noted the easy passage out of committee reflects the likelihood of full House approval.
