Could a Kentucky county school district hire a private agency to collect overdue occupational license taxes?

Plain-English summary

Fayette County Public Schools asked whether it could send overdue occupational license taxes to a private collection agency. The Kentucky Attorney General said in 1992 that calling the taxes delinquent did not create a separate collection power. Under the statutes the AG read, a county school district’s school taxes had to be collected by the sheriff or by a school employee appointed by the board. A private contractor could not collect them. The AG also read those routes as alternatives for the entire collection responsibility, so the board could not divide taxes between the sheriff and an employee.

The request also raised the agency’s proposed fee and a procurement exception. The opinion resolved the issue at the threshold by rejecting private collection and did not separately determine whether the fee was reasonable or whether noncompetitive negotiation was available.

Currency note

This opinion was issued in 1992. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Historical summary

School boards managing unpaid taxes

The AG said an unpaid school tax was still a school tax, with no separate statutory collection category for overdue amounts. It read KRS 160.500(1) to assign collection of county school taxes to the sheriff and KRS 160.505 to allow a board to appoint a school employee instead. Neither path authorized the proposed private collection agency.

Sheriffs and appointed school employees

The AG treated the statutory routes as complete alternatives. It said assigning some taxes to the sheriff and the rest to an employee would undermine the statutory choice of one person responsible for collection.

Common questions

Did delinquency let a school district use a different collector?

No. The AG said the overdue taxes remained school taxes, subject to the same collection statutes.

Could the board hire a private collection agency for those taxes?

The AG said no for county school district taxes under the provisions it examined.

Could the sheriff collect current taxes while a school employee collected overdue ones?

No. The opinion read the sheriff and appointed-employee routes as alternatives for collection responsibility, not a split arrangement.

Did the AG approve the proposed collection fee?

It did not decide that fee question separately. Its conclusion that the private agency could not collect the school taxes made the proposed arrangement unavailable on the facts presented.

Background and statutory framework

The request concerned unpaid school occupational license taxes and a proposed private agency fee. KRS 160.500(1) designated the sheriff to collect taxes for county schools. KRS 160.505 allowed the board to appoint a person, whom the AG read as a school employee, for collection and administration instead. The opinion found no separate statutory treatment for delinquent school taxes.

Citations and references

• KRS 160.500(1): sheriff collection of county school taxes.
• KRS 160.505: alternative board appointment discussed by the AG.

Source

• Landing page: https://kdla.access.preservica.com/uncategorized/IO_b84161e6-087a-4c30-af56-4b04138d2c69/
• Original PDF: https://kdla.access.preservica.com/download/file/IO_b84161e6-087a-4c30-af56-4b04138d2c69

Original opinion text

OAG 92-11

January 29, 1992
Patricia Todd Thomas
General Counsel
Fayette County Public Schools
701 East Main Street
Lexington, Kentucky 40502-1699
Dear Mrs. Thomas:
You have presented the following questions to the Attorney General: 1.

Whether the unpaid [occupational license tax for schools] taxes are delinquent taxes, which fall under a separate category from the regular collection of occupational license taxes;

2.

Whether these delinquent taxes may be
contracted out to a private collection agency;

3.

Whether a collection agency’s fee of thirtythree and one-third percent (33 1/3%) is considered a “reasonable expense” under the facts of the above listed circumstances, pursuant to KRS 160.637(2); and

4.

Whether a collection agency falls within the statutory exception to the Model Procurement Code for the contracting through noncompetitive negotiation.

Regarding your first question, we know of no reason why any tax that is not paid when due should not be termed a delinquent tax. However, the statutes dealing with collection of school taxes make no separate provision for the collection of delinquent taxes. The statutes simply make certain limited provisions for the collection of school taxes

OAG 92-11
Page 2

generally. While delinquent taxes may be placed in a separate logical category, it is a category without legal significance. Delinquent school taxes are still school taxes, and their collection must comply with the statutory provisions for the collection of school taxes. Your remaining questions deal with the collection of school taxes by a collection agency. Our reading of the statutes indicates that collection agencies may not collect school taxes imposed by county school districts. Under KRS 160.500(1), the sheriff is designated as the party responsible for the collection of school taxes for county schools. The only alternative is provided by KRS 160.505, which authorizes a board of education to “appoint a person who shall be responsible for collection and administration” of the tax. This statute clearly contemplates that the person so appointed will be an employee of the school district rather than a private contractor, for the statute states that the “position may be full-time or part-time and his compensation shall be fixed by the board and/or boards of education.” We conclude that KRS 160.500 and 160.505 prohibit any party other than the sheriff or an appointed school employee from collecting school taxes. We also read the statutes as providing complete alternatives; that is to say, we do not believe that a board of education can designate the sheriff to collect some school taxes, and designate an employee to collect the remainder. A shared responsibility would defeat the legislative intention present in each statute to make a single person responsible for collection of the taxes. Sincerely, Chris Gorman Attorney General

Ross T. Carter
Assistant Attorney General
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