Legislator wants to allow Kentuckians to sue governor over gold tax dispute
In the latest twist in a legal battle over Kentucky’s separation of powers and the taxation of gold and silver, a freshman legislator has filed a bill allowing Kentuckians to sue the governor over the issue.
House Bill 2 from Rep. T.J. Roberts, R-Burlington, gives people the right to sue over the continued collection of the sales tax on gold and silver.
A bill that included an exemption on gold and silver was line-item vetoed by Democratic Gov. Andy Beshear last legislative session.
The GOP-led legislature had the majorities to easily override the veto, but leaders there elected not to because they believe that Beshear’s veto is invalid. They claim that the bill is not an “appropriations bill” like a normal budget bill and therefore the governor doesn’t have the constitutional right to veto a line-item like the gold and silver sales tax exemption.
Roberts’ bill would allow Kentuckians who paid sales tax on gold or silver starting Aug. 1, 2024 to sue the governor, the Finance and Administration Cabinet and the Department of Revenue for a refund, attorneys fees and $1,000 for “each day that the violation occurred” upon passage of the bill.
The effort was treated as a high-priority by House GOP leadership, who allowed it to be filed as House Bill 2. Generally speaking, single-digit bill numbers have a much higher chance of success. Last year, all nine of those House bills were passed in their chamber of origin; seven of them became law.
Roberts said that he wanted to provide a judicial remedy for taxpayers because currently their primary option is through the Board of Tax Appeals, a body overseen by the Executive Branch. He framed the bill as a pro-separation of powers effort.
“This tax cut remains on the books, Attorney General (Russell) Coleman has said that this line-item veto was illegal, so this bill is making sure our separation of powers is protected,” Roberts said. “(We’re) also making abundantly clear that the power to tax rests only with the legislature, and that includes the power to exempt from taxes.”
Philosophically, Roberts believes that gold and silver shouldn’t be taxed because they’re often used as retirement investments. He called gold the “original universal currency of civilization.”
Beshear and Sen. Cassie Chambers Armstrong, D-Louisville, disagree. Beshear frowned upon the move in his veto message, saying that “if you own gold, you can afford to pay sales tax.”
Armstrong told the Herald-Leader that she agrees with Beshear’s assessment and contrasted the gold exemption with her proposal to exempt diapers from the sales tax, which garnered attention but did not ultimately pass in 2024.
She said she intends to propose a similar bill this session.
Spokespeople for Beshear have not responded to Herald-Leader requests for comment on the bill.
