June 26, 2013 —
Starting July 1, if you refuse to pay your state taxes in Kentucky then don’t expect to drive a vehicle, own a vehicle or make a living if your job requires a state-issued license.
Under a new law passed earlier this year, we joined 16 other states that revoke occupational and professional licenses if citizens don’t pay state taxes.
Two other states only take away licenses related to motor vehicles.
The measure was passed in the closing hours of the 2013 legislative session as an obscure amendment to the bill affecting public employee pensions.
Kentucky Department of Revenue says it will invoke the cancellation rule only as a last resort but they do expect the new law will bring the state an additional $5 million each year in previously uncollectable taxes.
As the effective date of the law comes closer, some state legislators are having second thoughts that perhaps it goes too far.
That means they are starting to hear from constituents who are uneasy about losing their licenses.
State Rep. Hubert Collins raised a good question at a recent legislative committee meeting when he asked how a delinquent taxpayer could be expected to pay his or her back taxes if they can’t earn a living.
It was revealed that the new regulation was recommended last year by the Governor's Blue Ribbon Commission on Tax Reform and had been requested by the state revenue department.
In reality, that may be the only one of the commission’s 54 suggestions to become law.
The revenue folks say they are aiming at chronically tardy taxpayers who have exhausted all of their appeals and continue to refuse to pay any state tax other than property taxes which are collected at the local level.
We were somewhat comforted to learn that about 95 percent of Kentuckians pay their state taxes.
And those who don’t can expect to receive a letter after July 1 to notify them of the dire consequences of the new law.
On a brighter note, if you agree to a payment plan, you will be considered in compliance and not at risk of losing any license.
The Kentucky Department of Motor Vehicle Regulation already routinely suspends driver’s licenses for various reasons.
We can expect a court challenge sooner than later, especially when the first lawyer loses his or her license.
In our view, if this license law doesn’t work, Kentucky might want to consider joining the 16 other states that still have some form of debtors’ prison.