Legislation to promote much-needed transparency, efficiency, and equity to the administration of Kentucky’s tax code has been filed in the Kentucky General Assembly.
An issue often discussed but never tackled in Frankfort always seems to be tax reform. During the 2015 session, it is again highly unlikely lawmakers will make changes to the state’s tax code. However, two bills aimed at bringing more transparency and placing new rules on deadlines and interest limits on the Department of Revenue were introduced last week by Rep. Tommy Thompson.
House Bill 361, the Taxpayer Rights Enhancement Act, would impose administrative requirements on the department regarding taxpayer protest and refund claims. It would also impose educational and transparency measures.
Companion legislation House Bill 399 would change the law that the department has to enforce. Under current law the interest rate the department charges taxpayers on underpayments is 4% higher than the interest rate the department owes on the overpayment of taxes. This bill would eliminate that disparity. The Kentucky Chamber is a strong supporter of these bills, known as the Taxpayer Bill of Rights.
Both bills were developed as part of a joint effort between members of the Kentucky Society of CPAs and the Kentucky Chamber tax committees.
The legislation seeks to bring more fairness to the state’s tax code by providing more information and guidance about our tax laws to taxpayers, business owners, and tax professionals. The added transparency and efficiency means less confusion, greater compliance, a better business climate, and ultimately more revenue.
The updates to the system, which has not been changed in more than 20 years, would be a way to make sure the Department of Revenue is getting the correct amount of taxes and ensure they are being spent properly.