Written by Beth Musgrave of the Herald-Leader
A bill backed by the mayors of Kentucky’s two largest cities would give more cities and counties the option of imposing a local restaurant tax.
House Bill 470, filed by Rep. Rob Rothenburger (R-Shelbyville), would apply to Lexington and other cities that do not already have the authority to levy such a tax. The bill would allow an up to 3 percent tax on restaurant receipts. In exchange, restaurants would be exempt from net profit taxes. Other cities that can’t levy a restaurant tax include Covington, Louisville, Bowling Green, Ashland, Owensboro, and Florence.
If passed, the bill would give local governments the authority to enact local ordinances. Depending on the local ordinance, that tax could be tacked on to restaurant bills on top of a sales tax.
“This is not requiring an imposition of a restaurant tax,” said J.D. Chaney, president and CEO of the Kentucky League of Cities, which is backing the bill. “This does not require anything. It only gives local authorities the right to consider it.”
HB 470 and HB 475, a constitutional amendment that would give local governments more taxing options, are needed so cities don’t have to continue to raise taxes on wages and property taxes, Mayor Gorton of Lexington said.
“Kentucky ranks in the top 5 nationally in local dependence on payroll tax revenues. It is not sustainable. Cities across Kentucky are facing significant increases in operating costs and pension costs.”
Kentucky’s restaurant industry is fighting the bill.
(Cross-posted via the Kentucky Press News Service. Read the rest of the article at the Herald-Leader.)
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