A failed bill from Kentucky’s 2025 legislative session focused on making a centralized collection portal for local occupational taxes will likely see new life when lawmakers return to Frankfort next year. Proponents of House Bill 253, sponsored by Rep. Jared Bauman (R-Jefferson County) recently spoke before the Interim Joint Committee on Local Government.
“Operating across multiple counties and cities, our team has to manually prepare, mail and track separate tax filings for each jurisdiction,” said Julie Roberts, a ServePro franchise owner. “This is time consuming, costly and inefficient. Just this month, we filed 83 tax return extensions with an average payment being under $10 each.”
HB 253 would have required the State Treasurer to build and operate a web-based portal to receive local occupational tax payments from businesses, who could choose to submit payments through the portal rather than directly to local governments. The proposed legislation would not change local governments’ ability to set or enforce tax rates but would create a single portal for payments, with the funds distributed to each jurisdiction. Supporters argue the system would ease compliance and improve reliability.
Counties would still be required to also take the payments, issue any refunds, retain responsibility for any auditing and continue to field compliance questions.
Committee members raised questions about cost and logistics. Sen. Scott Madon (R-Bell County) noted that Louisville Metro Government recently spent $16 million to develop an online system for occupational tax collection that is operated by 52 employees.
“Statewide, you’re talking about 87 counties and more than 400 cities,” Madon said. “Who’s going to pay for that?”
When asked what the total cost would be for a statewide system, Tom Underwood, Executive Director of the Kentucky chapter of the National Federation of Independent Business, said, “Not a clue.”
“That's the reason that we're asking for a long runway to develop an RFI to see where we would get to before we try and put anything in a budget or put a number to it,” Underwood added. “If it's $150 million, obviously it's not worth doing, but we don't know with the changes in technology that are happening so rapidly with AI and everything else, this may be something that is easy to do.”
KACo opposed HB 253 during the 2025 session and opposes another layer of executive branch oversight of a locally imposed tax.
The bill will be filed again in 2026, but it is unclear at this time if any changes will be made to last year’s language.
