EXTRA CONTENT: Corbin Commission gives go ahead to court challenge over new occupational tax law

Read the full text of the lawsuit by clicking here.

The next stop in the battle between Corbin and Knox County over the collection of occupational taxes is Knox Circuit Court, as the city of Corbin voted Thursday morning to challenge a new law as unconstitutional that tipped the scales in the fight Knox County’s way.

At a special called meeting Thursday, Corbin City commissioners voted unanimously to proceed with a lawsuit over an amendment to HB 499 by Senator Robert Stivers, whose district includes Knox County, that bars city taxpayers from claiming any credit or offset against a county occupational tax unless both the city and county were both collecting the taxes by March 15, 2012. They are calling the legislative move "special legislation." Before the new law, it appeared that the ongoing dispute between Knox County and Corbin in the courts was destined to go Corbin’s way.

"This should not be happening except for one particular senator, Robert Stivers," said Commissioner Joe "Butch" White, who is also named as a plaintiff in the lawsuit and who made the motion to proceed. "He has hurt the people of Corbin and we as a whole town have been hurt because of this."

White went on to say that citizens of Corbin and Knox County might want to rethink who is representing them in the state senate.

When asked if he might look into the job, White said he is supporting Ralph Hoskins, a Democrat who is challenging Stivers in the general election in November.

When Corbin passed a citywide occupational tax in 2005, an agreement was reached to share 25 percent of the revenue with Whitley County.

No agreement was ever reached with Knox County, so no tax was ever collected. The two sides have been at odds over whether state law allows Corbin taxpayers to claim a credit against the county tax. Both are set at one percent. City leaders say they have never collected the tax in the Knox County portion of Corbin because, absent a court ruling or an agreement, it would stack, meaning workers and businesses would essentially be double taxed.

Stivers’ argument in favor of the amendment was that if Corbin were able to keep all of the occupational taxes generated in the area of Corbin that lies within Knox County, it would compromise the ability of Knox County to provide services to its citizens because it would severely hamper the county’s budget.

"When we win this lawsuit, and we will win this lawsuit, all of the people of Corbin will see a drastic reduction in the cost of a business license," White said, adding that the current cost is between $50 and $12,000 annually depending on volume of sales at the particular business. "It will be reduced to a minimum of 50 percent the first year. So everybody in Corbin has a lot to gain by this. Everybody."