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KentuckyHB 5182026 Regular SessionHouse

AN ACT relating to the collection of local business taxes and fees.

Sponsored By: Patrick Flannery (Republican)

Signed by Governor

Local MandateAdministrative Regulations And ProceedingsAdvisory Boards, Commissions, And CommitteesCitiesCountiesEducation, FinanceInformation TechnologyLocal GovernmentReports MandatedSpecial DistrictsTaxation

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Bill Overview

Analyzed Economic Effects

4 provisions identified: 3 benefits, 0 costs, 1 mixed.

Local tax e-filing required by 2029

By July 1, 2029, each local tax district must adopt the state standard electronic returns or accept them alongside its own. A district may opt out only if it already had an online filing and payment system by January 1, 2025, or a binding contract by July 1, 2026. If a district accepts the forms, it has nine months after the final regulation to comply; opting‑out districts must file a written order and update links and forms within 30 days of any change. After July 1, 2029, districts must let you complete and submit returns online and pay by ACH or other approved electronic methods. You get an electronic receipt when filing and payment succeed.

Committee to design business tax forms

The Secretary of State leads a stakeholder committee to design the standard forms and instructions. The first meeting is held by August 31, 2026. The committee develops the forms by June 1, 2027, files them by June 24, 2027, and the Secretary proposes a regulation soon after the July 2027 meeting.

Standard online tax forms for businesses

The Secretary of State creates standard electronic occupational tax forms for all businesses. You can file a combined or separate net‑profits and gross‑receipts return, plus a payroll return. Fillable PDFs and instructions are posted on the state one‑stop business portal or another public site. You do not pay to access or download the forms. The Secretary posts links within 30 days after getting them from a tax district.

Cost-based online filing fees and small-district exemptions

Local tax districts may charge an extra electronic processing fee, but only to recover their actual costs, including vendor or bank charges. A district can apply each year for an exemption if it collected under $200,000 last fiscal year, or if compliance would cost more than 5% of its total annual budget. When a district opts out or gets an exemption, the Secretary of State notifies the Kentucky Society of CPAs.

Sponsors & Cosponsors

Sponsor

  • Patrick Flannery

    Republican • House

Cosponsors

  • Daniel Grossberg

    Democrat • House

  • George Brown Jr.

    Democrat • House

Roll Call Votes

All Roll Calls

Yes: 129 • No: 3

Senate vote • 3/25/2026

3rd reading, passed

Yes: 38 • No: 0

House vote • 2/25/2026

3rd reading, passed

Yes: 91 • No: 3

Actions Timeline

  1. signed by Governor (Acts Ch. 44)

    4/7/2026

  2. delivered to Governor

    3/26/2026

  3. enrolled, signed by President of the Senate

    3/26/2026House

  4. enrolled, signed by Speaker of the House

    3/26/2026House

  5. received in House

    3/26/2026House

  6. 3rd reading, passed 38-0

    3/25/2026Senate

  7. passed over and retained in the Consent Orders of the Day

    3/24/2026Senate

  8. posted for passage in the Consent Orders of the Day for Tuesday, March 24 2026

    3/20/2026Senate

  9. 2nd reading, to Rules as a consent bill

    3/19/2026Senate

  10. reported favorably, 1st reading, to Consent Calendar

    3/18/2026Senate

  11. to State & Local Government (S)

    3/16/2026Senate

  12. to Committee on Committees (S)

    2/26/2026Senate

  13. received in Senate

    2/26/2026Senate

  14. 3rd reading, passed 91-3 with Committee Substitute (1)

    2/25/2026House

  15. posted for passage in the Regular Orders of the Day for Wednesday, February 25 2026

    2/24/2026House

  16. 2nd reading, to Rules

    2/18/2026House

  17. reported favorably, 1st reading, to Calendar with Committee Substitute (1)

    2/17/2026House

  18. to Local Government (H)

    2/5/2026House

  19. to Committee on Committees (H)

    1/29/2026House

  20. introduced in House

    1/29/2026House

Bill Text

  • Current

    2/25/2026

    PDF

  • Introduced

    1/28/2026

    PDF

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