KRS § 243.075 — KY Code / Title XX / Chapter 243 / Section 243.075
243.075 Eligible city or county may impose regulatory license fee up to five percent on gross receipts of each establishment's sale of alcoholic beverages and cannabis-infused beverages -- Annual levies -- Credits -- Applicability of county regulatory license fee if city levies license fee -- Enactment of fee within two years following election -- Administrative regulations -- Use of revenue received from regulatory license fee -- Penalties for violation -- Party suing city or county for violation responsible for attorney fees if city or county found not to be in violation -- Regulatory fee imposed before 2019 permitted to continue at existing rate -- Applicability to direct shipper licensee -- Report to department
Status: in_force

243.075 Eligible city or county may impose regulatory license fee up to five percent

on gross receipts of each establishment's sale of alcoholic beverages and

cannabis-infused beverages -- Annual levies -- Credits -- Applicability of

county regulatory license fee if city levies license fee -- Enactment of fee within

two years following election -- Administrative regulations -- Use of revenue

received from regulatory license fee -- Penalties for violation -- Party suing city

or county for violation responsible for attorney fees if city or county found not

to be in violation -- Regulatory fee imposed before 2019 permitted to continue

at existing rate -- Applicability to direct shipper licensee -- Report to

department.

(1) (a) A city with a population of less than twenty thousand (20,000) based upon the

most recent federal decennial census, a county that does not contain a city

with a population equal to or greater than twenty thousand (20,000) based

upon the most recent federal decennial census, or a county that contains a city

authorized to impose a fee under subsection (9) of this section, that is wet

through a local option election held under KRS Chapter 242 is authorized to

impose a regulatory license fee not to exceed five percent (5%) upon the gross

receipts of the sale of alcoholic beverages and cannabis-infused beverages of

each establishment located in the city or county licensed to sell alcoholic

beverages or cannabis-infused beverages.

(b) The regulatory license fee may be levied at the beginning of each budget

period at a percentage rate that is reasonably estimated to fully reimburse the

local government for the estimated costs of any additional policing,

regulatory, or administrative expenses related to the sale of alcoholic

beverages or cannabis-infused beverages in the city and county.

(c) The regulatory license fee shall be in addition to any other taxes, fees, or

licenses permitted by law, except:

1. A credit against a regulatory license fee shall be allowed in an amount

equal to any licenses or fees imposed by the city or county pursuant to

KRS 243.060 or 243.070; and

2. In a county in which the city and county both levy a regulatory license

fee, the county license fee shall only be applicable outside the

jurisdictional boundaries of those cities which levy a license fee.

(2) (a) A city or county that is moist through a local option election held under KRS

242.1244 may by ordinance impose a regulatory license fee upon the gross

receipts of the sale of alcoholic beverages of each establishment located in the

city or county and licensed to sell alcoholic beverages by the drink for

consumption on the premises.

(b) The regulatory license fee may be levied annually at a rate that is reasonably

estimated to fully reimburse the city or county for the estimated costs for any

additional policing, regulatory, or administrative related expenses.

(c) The regulatory license fee shall be in addition to any other taxes, fees, or

licenses permitted by law, but a credit against the fee shall be allowed in an

amount equal to any licenses or fees imposed by the city or county pursuant to

KRS 243.060 or 243.070.

(d) In a county in which the city and county both levy a regulatory license fee, the

county license fee shall only be applicable outside the jurisdictional

boundaries of those cities which levy a license fee.

(3) (a) For any election held after July 15, 2014, any new fee authorized under

subsection (1) or (2) of this section shall be enacted by the city or county no

later than two (2) years from the date of the local option election held under

KRS Chapter 242.

(b) Notwithstanding paragraph (a) of this subsection, any city or county that held

a local option election between July 15, 2014, and July 15, 2018, may enact a

regulatory licensing fee in accordance with subsection (1) of this section

within two (2) years of June 29, 2021.

(4) After July 15, 2014, any fee authorized under subsections (1) and (2) of this section

shall be established at a rate that will generate revenue that does not exceed the total

of the reasonable expenses actually incurred by the city or county in the

immediately previous fiscal year for the additional cost, as demonstrated by

reasonable evidence, of:

(a) Policing;

(b) Regulation; and

(c) Administration;

as a result of the sale of alcoholic beverages or cannabis-infused beverages within

the city or county.

(5) (a) The Alcoholic Beverage Control Board shall promulgate administrative

regulations which set forth the process by which a city or county, in the first

year following the discontinuance of prohibition, may estimate any additional

policing, regulation, and administrative expenses by a city or county directly

and solely related to the discontinuance of prohibition. This subsection shall

apply to any discontinuance of prohibition occurring after the promulgation of

administrative regulations required by this subsection.

(b) After the first year, the regulatory license fee for each subsequent year shall

conform to the requirements of subsection (4) of this section.

(6) The revenue received from the imposition of the regulatory license fee authorized

under subsections (1) and (2) of this section shall be:

(a) Deposited into a segregated fund of the city or county;

(b) Spent only in accordance with the requirements of subsections (1) and (2) of

this section; and

(c) Audited under an annual audit performed pursuant to KRS 43.070, 64.810,

and 91A.040.

(7) Any city or county found by a court to have violated the provisions of this section

shall:

(a) Provide a refund as determined by the court to any licensee that has been

harmed in an amount equal to its prorated portion of the excess revenues

collected by the city or county that are directly attributable to a violation

occurring after July 15, 2014;

(b) Be responsible for the payment of the reasonable attorney fees directly

incurred by a party to a litigation in an amount ordered by the court upon its

finding of an intentional and willful violation of this section by a city or

county occurring after July 15, 2014; and

(c) Upon the finding by a court of a second intentional and willful violation of the

provisions of this section, lose the ability to impose the regulatory fee

provided by this section for a period of five (5) years and, upon the finding by

a court of a third intentional and willful violation, forfeit the right to impose

the regulatory license fee authorized by this section.

(8) Any party bringing suit against a city or county for an alleged violation of this

section occurring after July 15, 2014, shall be responsible for the payment of the

reasonable attorney fees of the city or county in an amount determined by the court

upon a finding by the court that the city or county did not violate this section.

(9) (a) Any city that does not meet the population requirements of subsection (1) of

this section, and any county that has a city exceeding the population

requirements of subsection (1) of this section, that imposed a regulatory

license fee pursuant to this section as of January 1, 2019, shall be deemed to

meet the requirements for doing so set out in this section and may continue to

impose the regulatory license fee previously established pursuant to this

section.

(b) Any city or county that is authorized to impose the regulatory license fee

under subsection (1) of this section, or under paragraph (a) of this subsection,

that imposed the regulatory license fee at a rate higher than five percent (5%)

prior to June 27, 2019, may continue to impose the regulatory license fee at a

rate that exceeds five percent (5%). The rate shall continue to be calculated

annually pursuant to the requirements of this section and shall not exceed the

rate that was imposed by the city or county on January 1, 2019.

(10) A direct shipper licensee shall be subject to and remit the regulatory license fee

imposed by this section as though it were an establishment located in a city or

county licensed to sell alcoholic beverages or cannabis-infused beverages. This fee

shall be considered a tax as defined in KRS 243.029.

(11) Any city or county imposing a regulatory license fee under this section shall file

with the department a report showing the applicable fee amount and remittance

address for each affected license type in its jurisdiction on or before August 1,

2020. Any adoption of this fee after July 15, 2020, or modification of the applicable

fee amount or remittance address for each affected licensee shall be reported to the

department within thirty (30) days of adoption by the city or county imposing the

fee. Within twenty (20) days after receipt of the information, the department shall

compile and publish the information so that it is readily available to the public.