Editorials

Kentucky charities are paying for Republicans’ railroading of tax changes

Kentucky’s new sales tax: what you need to know

Kentuckians will begin paying the state's 6 percent sales tax on many services, such as landscaping, gym memberships and car repairs, starting July 1.
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Kentuckians will begin paying the state's 6 percent sales tax on many services, such as landscaping, gym memberships and car repairs, starting July 1.

It takes a lot of nerve for House Speaker Pro Tempore David Osborne to blame the Department of Revenue for the new tax on charities, when Republican leaders rushed the bill through the legislature so fast that neither the public nor state government’s experts had a chance to read it, much less point out any unintended consequences.

Republican leaders unveiled the 349-page bill, which makes sweeping changes to the tax code, on the morning of April 2. By that night, over the strenuous objections of Democrats, both chambers had approved it, though we now see they did not understand all that they were doing.

It’s amazing that more mistakes haven’t been discovered in a bill that underwent almost no vetting or debate.

Osborne seems to think the Revenue Department, which administers tax law, should divine the legislature’s wishes, rather than rely on the words the legislature has put into law.

“There was clearly never any intent for a tax on these types of purchases, but unfortunately the Department of Revenue has interpreted HB 366 differently,” Osborne, R-Prospect, told Herald-Leader reporter Linda Blackford.

The new law has produced anxiety and frustration for nonprofits and churches that were surprised to learn the new 6 percent tax on some services and admissions includes tickets to charity fundraisers.

That, in turn, has produced anxiety and frustration for lawmakers who are hearing from hometown charities that do good work and are worried about the new tax.

If it remains in place, the tax would, for example, cost the Children’s Charity of the Bluegrass $30,000 from proceeds of its annual fundraising golf tournament.

Osborne already has prefiled a bill for next year that would reverse the tax on charities. Ticket sales for charitable events would be exempt from sales and use tax. The bill also would end a tax on the sale of items in charitable fundraisers. That provision is not new but was not enforced until a Supreme Court decision in March.

Instead of dodging accountability by scapegoating a state agency that has been scrambling to educate taxpayers about sweeping changes in the tax code, Osborne and his colleagues should vow that any future tax overhauls will be subject to advance scrutiny and public deliberation.

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