January 1, 2014

In Kentucky Electronic Filing Arrives for Corporations and There is More Talk of Tax Reform

Written By

By Erica Horn

Electronic Filing

Finally, in early February, corporations required to file the corporation income and limited liability entity tax return in Kentucky (Form 720) will be able to do so electronically. Direct debit will be an option for payment of taxes due.

Tax Reform, Really?

In his State of the Commonwealth address, Governor Steve Beshear called for comprehensive tax reform (again). The governor stated he would present a “tax modernization” proposal to the legislature based on findings of the 2012 Blue Ribbon Commission on Tax Reform. Specifically, the governor said:

I will present to you this session a tax modernization proposal with specific recommendations on how to move our tax system into the 21st Century. It will include a recommendation for a Constitutional amendment to allow our local communities to vote on a local sales tax for specific projects they may need.

A call to move the tax system into the 21st Century commonly is understood to be code for a tax on services. The question is whether professional services will be included in such a move. The mayors of Kentucky’s largest cities have lobbied heavily for an “option” to impose local sales taxes for specific projects.

There is little to no appetite in Kentucky’s General Assembly for tax changes of any type, and it’s an election year. However, the state is at a near crisis level concerning funding of education. Stay tuned.