Thursday, February 26, 2015

Local option sales tax faces hurdle in Kentucky Senate

An effort to let local voters temporarily raise sales taxes where they live to pay for big-ticket construction projects could be in trouble in the Republican-controlled state Senate.

Ford, General Electric and a host of other large utility customers wrote a letter to state lawmakers this week opposing the bill, saying a 1 percent sales tax increase would cost them an extra $24 million per year. Residential power bills are exempt from sales taxes, but industrial power bills are not.

Senate Majority Leader Damon Thayer of Georgetown said the letter creates a problem for the bill in the Senate. But Democratic House Speaker Greg Stumbo said the companies could easily be exempted.

A spokesman for Local Investments for Transformation, a group lobbying for the bill, said supporters are working on a solution.