Local Sales Tax Talk

May 10, 2012

Despite heavy odds against her in the state senate, a Lexington lawmaker thinks Kentucky cities should be allowed to levy a local sales tax.  Democrat Kathy Stein told Lexington council members this week such a tax would benefit local government.  “I’m sure that studies could be done to make sure that anything that we did would not harm our tourism business…but I can’t imagine that a penny here or a penny there would harm things…but it would certainly add up in our coffers,” said Stein.

Before Lexington or any other Kentucky city can levy sales tax, the state legislature must first give permission.  Though the state senate is dominated by Republicans, Stein believes support for such legislation is growing.  A previous constitutional amendment proposed by Stein would have put such taxing power in the hands of local government officials.  Lexington council member Chuck Ellinger  backs the idea, but says it’ll be a tough sell in rural areas..

“Most of the shopping and that kind of retail activity comes in from the smaller communities into the bigger communities and that’s where they’re gonna benefit from it…so you have to work some kind of revenue sharing process..so you give money back to the smaller communities,” said Ellinger.

The Kentucky League of Cities several years ago lobbied for local officials and voters to have the option of levying a sales tax.