Tax & Economic Incentives
We have provided general tax and economic development incentive representation to distillers, owners, and operators of bourbon maturation warehouses. That representation has included advising as to the proper reporting of the Kentucky state and local distilled spirits tax, drafting legislation related to the distilled spirits industry and assisting with claiming the Kentucky state recycling income tax credit.
Our incentives representation has included (i) serving as bond counsel to issue taxable industrial revenue bonds to provide state and local ad valorem property tax abatement on distilleries, visitors’ centers, bourbon maturation warehouses and barrels and negotiating any related payment in lieu of taxes obligations; and (ii) advising with respect to and negotiating (a) state income tax credits and wage assessments under the Kentucky Business Investment Act program; (b) refunds of sales and use taxes paid on construction materials under the Kentucky Enterprise Initiative Act program; (c) refunds of sales and use taxes collected and paid on admissions and sales of tangible personal property under the Kentucky Tourism Development Act program.
Represented two major ophthalmology practices in the sale of their Kentucky and Indiana-based practices and associated ambulatory surgery centers to another business based in Missouri. The first $33 million transaction was structured as an asset purchase and the Second $30 million transition was structured as a stock purchase.
Successfully represented several coal companies in an appeal of personal property tax assessment thereby reducing their taxes due by $4 million.
Successful resolution in 2016 of litigation before Kentucky Claims Commission reducing real property tax assessments issued to thoroughbred race track.
Successful resolution in 2016 of tangible personal property tax assessments issued by Kentucky Department of Revenue on computer software and equipment.
Worked with the Kentucky Department of Revenue in 2016 and the landfill industry regarding repeal of the public service company tax on landfills and enactment of a new landfill property tax statutory and regulatory scheme.
Successfully resolved tangible property tax litigation before the Kentucky Claims Commission for a telecommunications company in 2017.
Coal Severance Tax
Successful resolution in 2017 of coal severance tax assessments issued by Kentucky Department of Revenue against coal company.
Taxable Lease Revenue Bonds for Property Tax Abatements
Served as bond counsel for the issuance of $54,000,000 taxable industrial revenue bonds to obtain 30-year state and local property tax abatements for new facilities used for a nation-wide retailer.
Served as bond counsel for the issuance of $60 million taxable industrial revenue bonds to obtain 30-year state and local property tax abatements for new facilities used to manufacture bourbon.
Served as bond counsel for the issuance of $50 million taxable industrial revenue bonds to obtain 30-year state and local property tax abatements for new facilities used to assemble and distribute educational materials.
Public Service Company Tax
Successful resolution in 2016 of litigation before Kentucky Board of Tax Appeals reducing public service company tax assessments issued to landfill companies.
Limited Liability Entity Tax
Successfully defended client against limited liability entity tax assessment resulting in assessment being set aside.
Successfully defended audit assessments of corporation income tax resulting in $500,000 refund for client.
Sales and Use Tax
Successfully defended clients against sales and use tax audit assessments saving clients in excess of $3 million.
Assisted taxpayer in obtaining multi-million dollar reduction in local property taxes.
Berger Family Real Estate, LLC v. City of Covington, et al., 464 S.W.3d 160 (Ky. App. 2015). Holding that the City of Covington, Kentucky’s decision to circulate a petition to form a management decision was not actionable until the requisite signatures were obtained and the City acted on the petition.
Library Taxing Districts
Campbell County Library Board of Trustees v. Charlie Coleman, et al; Kenton County Library Board of Trustees v. Garth Kuhhein, 475 S.W.3d 40 (Ky. App. 2015); (separate cases decided together) Holding library districts formed by petition when setting ad valorem (property) tax rates are governed by H.B. 44 but are limited by KRS 173.790 if they seek to set a rate that will raise revenue by more than four percent over the prior year.
Sales and Use Tax
Negotiated settlement in sales tax protest for chemical company reducing assessment by several millions of dollars.
Successful resolution in 2015 of litigation before Kentucky Board of Tax Appeals reducing assessments imposed upon purchases of computer software used in the electric utility industry.
Successful resolution in 2016 of litigation before Kentucky Board of Tax Appeals reducing assessments against telecommunications companies by over $3 million.
Successful resolution in 2016 of assessments issued by Kentucky Department of Revenue against telecommunications companies by $17.5 million.
Prepaid Wireless Service Charges
Virgin Mobile USA, L.P. v. Commonwealth of Kentucky ex rel. Commercial Mobile Radio Service Emergency Telecommunications Board v. Virgin Mobile USA, L.P., 448 S.W.3d 241 (Ky. 2014) Holding that CMRS service charges did not apply to prepaid wireless telecommunications prior to July 2006.
Deduction of Foreign Dividends
Caterpillar Inc. v. Indiana Dept. of State Revenue, 15 N.E.3d 1269 (Ind. 2014). Holding that Ind. Code § 6-3-2-12 did not authorize Caterpillar to deduct foreign dividends when calculating a net operating loss and such denial did not violate the dormant Commerce Clause of the U.S. Constitution.
Reorganization, Refinancing and Acquisition of Major Healthcare Entity
Stoll Keenon Ogden represented a major healthcare services entity, its affiliated upstream and sister companies, its owners and its founding management team in comprehensive reorganization, refinancing and acquisition transactions totaling more than $300 million. The matters resulted in the closing of a senior secured term loan and revolving credit facilities secured by owned senior care facilities in four states with a 9-member syndicate of commercial banks; the requisition of waivers, consents and estoppels from various property lessors on leased senior care facilities in four states; restructuring of upstream holding companies and combination of two upstream ownership groups and boards of managers; the creation of a management company; the introduction of healthcare facility management agreements; the migration of payroll and benefits for more than 7,000 employees; the related restructuring of multiple lease and debt financing and supplier relationships; the creation and reorganization of multiple SPE organizations accompanied by extensive non-consolidation analysis and issuance of a substantive non-consolidation opinion to the lending syndicate; the exercise of purchase option and acquisition of multiple senior care facilities; the contribution of additional equity capital from the client’s majority owners; and the amendment and restructuring of multiple Master Lease and inter-creditor agreements.
Presumptive Abandonment Period
American Express Travel Related Services Company, Inc. v. Commonwealth of Kentucky, Kentucky Department of Treasury, et al., 730 F.3d 628 (6th Cir. 2013) Holding that the provisions of the 2008-2010 Executive Branch Budget Bill and subsequent legislation purporting to reduce the presumptive abandonment period for traveler’s checks from 15 years to seven years applied only to checks issued after their enactment but did not violate the Commerce Clause of the U.S. Constitution.
Personal Property Tax Protest
Department of Revenue, Finance and Administration Cabinet v. Cox Interior, Inc., 400 S.W.3d 240 (Ky. 2013) Holding that a taxpayer’s failure to protest the Department of Revenue’s assessment of tangible personal property taxes does not bar a taxpayer from later seeking a refund of overpaid taxes pursuant to KRS 134.590 (amicus curiae participation).
Open Records Act Requirements
Dept. of Revenue v. Timothy J. Eifler, 436 S.W.3d 530 (Ky. App. 2013) Holding the Department of Revenue was required by the Kentucky Open Records Act to disclose the names, addresses and dates of registration of all taxpayers registered for the utility gross receipts license tax for schools and rejecting claim that such disclosure is protected by the taxpayer confidentiality provisions of KRS 61.878(1)(l), 131.190(1)(a) and 131.081(15).
IRS Audit of Estate Tax Return- Family Limited Partnership-Graegin Loan
Represented a multi-million dollar estate in an Internal Revenue Service audit of the Federal estate tax return and a family limited partnership structure. Successfully defended the validity of the family limited partnership, obtained a significant valuation discount and successfully used a Graegin loan to finance the payment of the Federal estate tax.
Reorganization of Equine Business, Insurance Trust and Gift Planning
Represented a husband and wife in planning and implementing the reorganization of a multi-million dollar equine business; in the preparation of multi-generation irrevocable trusts for each of the children and the gifting of interests in the equine business on a discounted basis to the trusts; in planning and implementing a multi-million dollar life insurance trust; and in preparing and implementing a beneficiary defective irrevocable dynasty trust.
Trust Reformations- Delaware Directed Trusts
Represented a corporate trustee in amending multiple 1950s trusts to be directed trusts, transferring administration of the trusts to Delaware and obtaining a private letter ruling from the Internal Revenue Service to confirm the continuing applicability of the generation-skipping tax grandfathered exempt status of the trusts.
Local Hotel Taxes
Successfully defended online travel companies in litigation by three local governments seeking to collect local hotel taxes. Louisville/Jefferson County Metro Govt., Lexington-Fayette Urban County Govt., et al. v. Hotels.com, L.P., et al., 590 F.3d 381 (6th Cir., 2009).
Utility Gross Receipts License Tax
Successfully represented a provider of utility services in an appeal of a utility gross receipts license tax assessment that reduced their liability by $2.5 million.
Successfully represented taxpayer in refund suit based on unitary income tax filing.
Sales and Use Tax
Successfully defended an auto parts manufacturer in a sales and use tax audit that saved the company in excess of $5 million.
Advised client with respect to like-kind exchanges of multiple properties under Section 1031 of the Internal Revenue Code involving exchange proceeds in excess of $17 million.
Successfully negotiated and implemented incentive packages for a variety of projects involving state income and local occupational tax credits and wage assessments under the Kentucky Business Investment Act program; sales and use tax refunds under the Kentucky Enterprise Initiative Act and Tourism Development Act programs; an up to 30-year state and local ad valorem (property) tax abatement; state grants under the Economic Development Bond and Community Development Block Grant programs; local grants of developable land and credits and power purchase credits and grants from the Tennessee Valley Authority.
Sample projects include the following:
- Two $19 million hydroponic greenhouse facilities.
- $35 million bourbon distillery and related visitors’ center.
- $120 million bourbon maturation warehouse project.
- $60 million bourbon distillery expansion and related visitors’ center.
- $123 million tobacco manufacturing and processing facility.
- $193 million cast iron foundry facility.
- $120 million steel manufacturing plant.
- Multiple $50+ million distribution center projects.
Class Action, Telecommunications and Consumer Protection
SKO acted as counsel for a 175,000-member plaintiff class in U.S. District Court to challenge sales tax collection on broadband Internet access services provided by incumbent local exchange carrier. The Court approved settlement agreement in August 2007 that provided class members full refunds of overpayments plus interest, totaling $8.2 million.
Clark v. BellSouth Telecommunications, Inc., 461 F.Supp.2d 541 (W.D. Ky. 2006).
Purchase of Gas/Food Marts
Represented an oil company in the purchase of the assets and business of six gas and food mart locations.
Estate Planning & Administration
SKO administers the estates of notable horsewomen and horsemen and is actively involved in planning estates in the shifting economic climate.
Mergers & Acquisitions
SKO successfully represented a number of clients in the acquisition of thoroughbred farms and related membership interests, including verification of environmental data and private development rights.
Hotel Tax of Online Travel Company
City of Bowling Green v. Hotels.com, L.P., et al., 357 S.W.3d 531 (Ky.App. 2011) Holding that the City of Bowling Green, Kentucky’s local transient room license taxes did not apply to online travel companies.
Louisville/Jefferson County Metro Govt., Lexington-Fayette Urban County Government et al. v. Hotels.com, L.P., et al., 590 F.3d 381 (6th Cir., Dec. 22, 2009) (Holding that Kentucky local transient room license taxes did not apply to online travel companies and upholding dismissal of putative class action by Metro Government and LFUCG, on behalf of themselves and a class consisting of all local Kentucky governments levying transient room taxes).
Municipal Property Tax Litigation
St. Matthews Fire Protection District v. John Aubrey, Sheriff, et al., 204 S.W.3d 56 (Ky.App. 2009), disc. rev. den. (2010)
Obtained a ruling that applies the doctrine of sovereign immunity to sheriffs and county clerks in action for failure to properly assess and collect ad valorem (property) taxes.
Eric P. Light, et al. v. City of Louisville, 248 S.W.3d 559 (2008)
Determined the statutory time requirements governing adoption of local ad valorem (property) tax rates.
City of Somerset v. Bell et al., 156 S.W.3d 321 (Ky.App. 2005)
Holding that taxpayers may bring a class action to obtain ad valorem (property) tax refunds.
City of Bromley v. Smith et al., 149 S.W.3d 403 (2004)
Holding that taxpayers may bring a class action to obtain Kentucky specific property tax refunds under common law).
Occupational Tax Litigation
Paradise Tomato Kitchens, Inc. v. Louisville/Jefferson County Metro Revenue Commission, et al., Ky. Court of Appeals Action No. 2007-CA-000965 (June 30, 2008), disc. rev. den. and ordered de-published (2008)
Determined the extent of right to refund of overpaid local occupational license taxes under common law.
Barney Jones, et al. v. Jason H. Cross, et al., 260 S.W.3d 343 (Ky. 2008)
Holding that sovereign immunity otherwise enjoyed by sheriffs has been statutorily waived.
Bob Hook Chevrolet Isuzu, Inc. v. Kentucky Transportation Cabinet, 983 S.W.2d 488 (1998)
Participation in action holding customer courtesy cars could not be registered under a U-Drive-It permit.
Indiana Corporate Income Tax
Caterpillar Financial Services Corporation v. Indiana Dept. of State Revenue, 849 N.E.2d 1235 (Ind. Tax. 2005)
Expanding scope of taxpayers subject to the Indiana financial institutions tax and exempt from Indiana gross income tax, Indiana adjusted gross income tax and Indiana supplemental net income taxes.
Sales and Use Tax Litigation
Falls City Limb & Brace Co., Inc. v. Kentucky Revenue Cabinet, Franklin Circuit Court (Div. II) Case No. 02-CI-00644 (2003)
Affirming Ky. Board of Tax Appeals holding charges for materials, repair parts and replacements parts used in re-fitting and repair of prosthetic limbs and other devices exempt from Kentucky sales and use taxes.
Auto Dealer Usage Tax Litigation
Jim Cooke Buick, Inc. v. Kentucky Transportation Cabinet, KBTA Order No. K-17826 (2000)
Holding Transportation Cabinet cannot remove a vehicle from the U-Drive-It program and assess Kentucky motor vehicle usage tax without first voiding taxpayer’s U-Drive-It permit.