House Bill 163 Utility Gross Receipts

License Tax

Welcome Financial Officers

April 15, 2005Louisville, KY

House Bill 163--Utility Gross Receipts License Tax

• Richard Dobson – Executive Director, Office of Sales and Excise Tax

• Wendell Butler - Director, Division of Miscellaneous Taxes

• Paul Riddell - Project Manager, Commonwealth Office of Technology

House Bill 163--Utility Gross Receipts License Tax

General Information

• Enacted during the 2004 Session of the General Assembly and promulgated as KRS 160.613 -160.617

• Transfers the administration of the Utility Gross Receipts License Tax from the local school districts to the Department of Revenue (DOR) effective July 1, 2005

• HB 272 adds Direct Broadcast Satellite to the school tax base for districts which impose the tax on cable services effective July 1, 2005

House Bill 163--Utility Gross Receipts License Tax

General Information (continued)

• Provides for a utility company to submit payment to DOR with a breakdown of the tax collected by school district

• Provides for DOR to capture the district information and corresponding tax collections and distribute the amount to the appropriate school district in one monthly payment

• Provides for a portion of the amount collected to be deducted by DOR to cover actual operating and overhead expenses, not to exceed 1 percent

House Bill 163--Utility Gross Receipts License Tax

Goals & Objectives

• Process returns and collect receipts as cost effectively and efficiently as possible

• Analyze the process to improve receipt collections for school districts

• Improve cash flow stream for school districts• Display of currently available school district

boundaries

House Bill 163--Utility Gross Receipts License Tax

Goals & Objectives (continued)

• Acquire new technologies to implement and maintain a state-of-the-art tax administration system

• Leverage other agencies’ information to streamline and monitor the registration process

• Promote voluntary compliance with tax laws through educational programs and quality taxpayer services

• Develop and implement new and innovative programs to maximize compliance with tax laws

House Bill 163--Utility Gross Receipts License Tax

Benefits

• Timely disbursements of receipts• Improved collections and proper posting of receipts

for the school districts• Current or new utility, cable, and phone companies

performing business in the Commonwealth will be identified and registered for the collection of school tax

House Bill 163--Utility Gross Receipts License Tax

Boundary Information

• DOR will maintain currently available boundary maps on a web server for access by the school districts and utility companies

• If changes to the boundaries are made, the superintendent must submit new boundary information (maps) to Department of Education.

• Tax payments should be allocated in accordance with the most recent boundary information provided by the superintendents

House Bill 163--Utility Gross Receipts License Tax

Utility Company Registration

• Online registration system• Demographic and school district information will be

collected

• DOR will exchange information with other regulatory agencies to ensure new companies are identified

House Bill 163--Utility Gross Receipts License Tax

Tax Collection & Allocation

• Online filing and payment will facilitate timely processing

• Filing of return and payment will be due on the 20th of the month for the prior month’s collections

House Bill 163--Utility Gross Receipts License Tax

Distribution to School Districts

• DOR will establish a standard format and schedule for payments to school districts

• Old law would still be in effect for receipts collected prior to July 1, 2005

• First return filed will be for the July 1 – 31 period, due August 20, 2005

• Our goal for distribution will be by the end of month in which collections are received (10th of September for the 1st distribution)

House Bill 163--Utility Gross Receipts License Tax

Where do we go from here?

School District Involvement Needed—

• Utility and Cable Provider Listings

House Bill 163--Utility Gross Receipts License Tax

House Bill 163--Utility Gross Receipts License Tax

House Bill 163--Utility Gross Receipts License Tax

School District Current Issues

QUESTIONS

House Bill 163--Utility Gross Receipts License Tax

DOR Contact Information

• Richard Dobson, Executive Director, Office of Sales and Excise Taxes, 502-564-5523, Richard.dobson@ky.gov

• Ricky Haven, Director, Division of Sales and Use Taxes, 502-564-5170, Ricky.haven@ky.gov

• Debbie Dunn, Supervisor, Financial Tax Section, 502-564-4810, Debbie.dunn@ky.gov