City’s tax increase subject to 45 day rule unless adopt county’s assessment: LIGHT V. CITY OF LOUISVILLE (SC 3/20/2008)

LIGHT V. CITY OF LOUISVILLE
REVENUE AND TAXATION:City’s tax increase subject to 45 day rule unless adopt county’s assessment
2005-SC-000759-DG.pdf
PUBLISHED: AFFIRMING
OPINION BY SPECIAL JUSTICE JAMES PARSONS
ABRAMSON, SCHRODER NOT SITTING
JEFFERSON COUNTY
DATE RENDERED: 3/20/2008

The Appellants "Lights" taxpayers brought a class action suit against the City of Louisville seeking a declaration or rights and refunds after the city had denied their action challenging the rate.  Taxpayers appealed an adverse decision of the Court of Appeals, which affirmed the judgment of the Jefferson Circuit Court, dismissing their claims that the City of Louisville, Kentucky set ad valorem tax rates for the years 1998 and 1999 in excess of the amount permitted by law.

The City had elected to use the Jefferson County property assessment for purposes of establishing the City’s ad valorem tax rates pursuant to the provisions of KRS 132.285. In 1998 and 1999, the City established its ad valorem tax rates at the four percent (4%) Increase rate permitted by KRS 132.027, which rates were in excess of the compensating tax rates as defined by KRS 132.010(6). It is not disputed that the City published the public notices required by KRS 132.027 to establish the four percent  (4%) increase tax rate for each year in question. However, the ordinances adopting the tax rates for 1998 and 1999 were each adopted more than forty-five (45) days after the Kentucky Department of Revenue had certified the property tax rolls for Jefferson County, Kentucky, for those years.

The Supreme Court in an opinion written by Special Justice James E. Parsons held the property tax statute establishing 45-day deadline for setting a tax rate increasing revenues by more than four percent applied to  the city, but Louisville could could establish a rate increasing revenue by four percent, more than 45 days after certification of property tax rolls, under statute applicable to cities that adopted county’s assessment. Since the city had adopted the county’s assessment, the COA and trial court decisions upholding the tax increase were affirmed.