Many of our accounting firm’s clients are small retail businesses, including restaurateurs. That’s why I am concerned about legislation that will again be considered by proposing to amend Kentucky’s constitution to authorize a local option sales tax (LOST).
A new local sales tax, on top of the existing 6 percent state sales tax, will obviously affect their customers by decreasing their disposable incomes. It will also increase their cost of doing business by increasing the cost of utilities and supplies.
Beyond that, many of our clients are forced into the role of sales tax collection agents for the state. They receive a ridiculously small reimbursement (capped at $50 per month) for doing the government’s work which does not cover the credit card merchant fees. I know this because we handle the sales tax reporting responsibilities for many of these businesses.
Another new tax like the proposed local option sales tax is a bad idea. I hope it will again fail to win enough support in the upcoming session. I encourage you to ask the legislative candidates in your district where they stand on LOST. It may help you decide who you want to support in November.
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Bob Patterson, CPA