Stacked! Corbin to begin collecting occupational tax in Knox County on July 1

After 11 years of waiting, Corbin city officials decided Friday that the city can wait no longer to somehow reach an agreement with Knox County to divide occupational tax revenue.

Under the terms of a resolution the commission approved during a special called meeting Friday, Corbin will begin collecting its own occupational tax from individuals working within the Knox County portion of the city beginning July 1.

“Corbin has got to take care of Corbin,” said City Manager Marlon Sams when asked why now.

Commissioner Freddy “Bruce” Hodge said the city had to find additional revenue.

“We’re broke,” Hodge said.

“We are just hurting and everybody knows it.”

Sams estimated that the tax would bring in an additional $500,000 annually for the city.

The resolution passed by a vote of 4-1 with Commissioner Suzie Razmus casting the lone “no” vote.

Razmus said she is not completely against the proposal but believes that the process to institute it was rushed.

“I understand that we do need more revenue but I wanted to see the new fiscal year budget first,” Razmus said.

Sams is in the process of developing the budget with plans to present it to the commission at the next regular meeting on June 20. The new fiscal year begins July 1.

“I want to make sure we are going to be good stewards of taxpayers’ dollars,” Razmus said.

Corbin’s occupational tax ordinance, which was passed in August 2005, also calls for a one-percent tax on the net profits of the businesses.

In the resolution, the commission elected not to collect that portion of the tax, citing the negative economic impact that may result.

A copy of the entire resolution is viewable on The News Journal website, www.thenewsjournal.net.

Employees in the area of Corbin within Whitley County are subject to Whitley County’s occupational tax.

The city and county have an agreement that calls for the county to collect the occupational tax. Corbin then receives 75 percent of the revenue from the taxes collected within the city limits.

Corbin city officials had been seeking a similar agreement with Knox County in an effort to avoid stacking the taxes on city residents in Knox County.

However, Knox County officials had declined to negotiate explaining the loss of revenue would be detrimental to the county.

Sams noted that Knox County has an agreement in place with Barbourville to divide the occupational tax.

A state law was in place that would have allowed Corbin residents living in and businesses operating in Knox County to claim a credit on the Knox County occupational tax toward the city occupational tax.

However, Senator Robert Stivers R-Manchester, whose district included Knox County, pushed through an amendment in 2012 that only permitted residents from claiming the credit if both the city and county in question were collecting occupational taxes by March 15, 2012. The moratorium was in effect for two years. Stivers had pushed through similar amendments in 2014 and again this year.

In the 2014 version, Stivers changed the amendment to permit Corbin residents to claim one-tenth of a percent in credit toward the Knox County tax in 2014 and two-tenths of a percent in 2015 so long as Corbin was collecting the tax by July 1 of the respective years.

In 2016, Stivers added the same language for 2016 and 2017.

Sams said this is not intended to punish the people who work in Knox County.

“We have for so long had to manage with revenue taken from Whitley occupational taxes and other taxes to do everything for the city with nothing coming from Knox County,” Sams said.

“The city has exhausted all options with legislators and Knox County,” Sams said. “We have been told wait and this will change. Since 2008 we have waited. We have waited long enough.”

Knox County Judge-Executive JM Hall did not return calls seeking comment.