Saturday, January 06, 2007

Kentucky Boat Owners Fight Tax

We are seeing this more and more. Some state Department of Revenue discovers they have not been collecting a particular tax so they unilaterally declare that taxpayers are at fault and back taxes are owed. The burden should be on the government agency to notify taxpayers in advance of the collection date and then give them ample time to pay the tax. Retroactive collection show be allowed only when the collecting agency is able to prove that taxpayers have been notified. As tax laws become more complex, tax collection bureaucrats can easily turn into tyrants if they are allowed to pick and choose which taxes they collect and which they let slide.


"While the Kentucky Department of Revenue is starting with 2005 tax bills, it has the legal authority to impose back-taxes up to five years. Midkiff said the state hasn't made a decision whether or not to do that.

Though there are several fees associated with registering a boat, states that boarder Kentucky, such as Indiana, Ohio and Tennessee have no annual property tax on boats.

Karen Chrisman, an attorney with Lexington, Ky.-based law firm McBrayer, Mcginnis, Leslie and Kirkland, is working against the tax with a group known as Kentucky Documented Boaters Incorporated.

"They see this as an attack on tourism in Kentucky," Chrisman said.