{"data":{"id":"us-ky/krs-243.075","jurisdiction":"us-ky","citation":"KRS 243.075","heading":"Eligible city or county may impose regulatory license fee up to five percent","body":"on gross receipts of each establishment's sale of alcoholic beverages and\ncannabis-infused beverages -- Annual levies -- Credits -- Applicability of\ncounty regulatory license fee if city levies license fee -- Enactment of fee within\ntwo years following election -- Administrative regulations -- Use of revenue\nreceived from regulatory license fee -- Penalties for violation -- Party suing city\nor county for violation respons ible for attorney fees if city or county found not\nto be in violation -- Regulatory fee imposed before 2019 permitted to continue\nat existing rate -- Applicability to direct shipper licensee -- Report to\ndepartment.\n(1) (a) A city with a population of less than twenty thousand (20,000) based upon the\nmost recent federal decennial census, a county that does not contain a city\nwith a population equal to or greater than twenty thousand (20,000) based\nupon the most recent federal decennial census, or a co unty that contains a city\nauthorized to impose a fee under subsection (9) of this section, that is wet\nthrough a local option election held under KRS Chapter 242 is authorized to\nimpose a regulatory license fee not to exceed five percent (5%) upon the gross\nreceipts of the sale of alcoholic beverages and cannabis -infused beverages of\neach establishment located in the city or county licensed to sell alcoholic\nbeverages or cannabis-infused beverages.\n(b) The regulatory license fee may be levied at the beginni ng of each budget\nperiod at a percentage rate that is reasonably estimated to fully reimburse the\nlocal government for the estimated costs of any additional policing,\nregulatory, or administrative expenses related to the sale of alcoholic\nbeverages or cannabis-infused beverages in the city and county.\n(c) The regulatory license fee shall be in addition to any other taxes, fees, or\nlicenses permitted by law, except:\n1. A credit against a regulatory license fee shall be allowed in an amount\nequal to any licen ses or fees imposed by the city or county pursuant to\nKRS 243.060 or 243.070; and\n2. In a county in which the city and county both levy a regulatory license\nfee, the county license fee shall only be applicable outside the\njurisdictional boundaries of those cities which levy a license fee.\n(2) (a) A city or county that is moist through a local option election held under KRS\n242.1244 may by ordinance impose a regulatory license fee upon the gross\nreceipts of the sale of alcoholic beverages of each establishme nt located in the\ncity or county and licensed to sell alcoholic beverages by the drink for\nconsumption on the premises.\n(b) The regulatory license fee may be levied annually at a rate that is reasonably\nestimated to fully reimburse the city or county for t he estimated costs for any\nadditional policing, regulatory, or administrative related expenses.\n(c) The regulatory license fee shall be in addition to any other taxes, fees, or\nlicenses permitted by law, but a credit against the fee shall be allowed in an\namount equal to any licenses or fees imposed by the city or county pursuant to\nKRS 243.060 or 243.070.\n(d) In a county in which the city and county both levy a regulatory license fee, the\ncounty license fee shall only be applicable outside the jurisdictional\nboundaries of those cities which levy a license fee.\n(3) (a) For any election held after July 15, 2014, any new fee authorized under\nsubsection (1) or (2) of this section shall be enacted by the city or county no\nlater than two (2) years from the date of the local option election held under\nKRS Chapter 242.\n(b) Notwithstanding paragraph (a) of this subsectio n, any city or county that held\na local option election between July 15, 2014, and July 15, 2018, may enact a\nregulatory licensing fee in accordance with subsection (1) of this section\nwithin two (2) years of June 29, 2021.\n(4) After July 15, 2014, any fee authorized under subsections (1) and (2) of this section\nshall be established at a rate that will generate revenue that does not exceed the total\nof the reasonable expenses actually incurred by the city or county in the\nimmediately previous fiscal year fo r the additional cost, as demonstrated by\nreasonable evidence, of:\n(a) Policing;\n(b) Regulation; and\n(c) Administration;\nas a result of the sale of alcoholic beverages or cannabis -infused beverages within\nthe city or county.\n(5) (a) The Alcoholic Beverage  Control Board shall promulgate administrative\nregulations which set forth the process by which a city or county, in the first\nyear following the discontinuance of prohibition, may estimate any additional\npolicing, regulation, and administrative expenses b y a city or county directly\nand solely related to the discontinuance of prohibition. This subsection shall\napply to any discontinuance of prohibition occurring after the promulgation of\nadministrative regulations required by this subsection.\n(b) After the first year, the regulatory license fee for each subsequent year shall\nconform to the requirements of subsection (4) of this section.\n(6) The revenue received from the imposition of the regulatory license fee authorized\nunder subsections (1) and (2) of this section shall be:\n(a) Deposited into a segregated fund of the city or county;\n(b) Spent only in accordance with the requirements of subsections (1) and (2) of\nthis section; and\n(c) Audited under an annual audit performed pursuant to KRS 43.070, 64.810,\nand 91A.040.\n(7) Any city or county found by a court to have violated the provisions of this section\nshall:\n(a) Provide a refund as determined by the court to any licensee that has been\nharmed in an amount equal to its prorated portion of the excess revenues\ncollected by the city or county that are directly attributable to a violation\noccurring after July 15, 2014;\n(b) Be responsible for the payment of the reasonable attorney fees directly\nincurred by a party to a litigation in an amount ordered by the court upon its\nfinding of an intentional and willful violation of this section by a city or\ncounty occurring after July 15, 2014; and\n(c) Upon the finding by a court of a second intentional and willful violation of the\nprovisions of this section, lose the abilit y to impose the regulatory fee\nprovided by this section for a period of five (5) years and, upon the finding by\na court of a third intentional and willful violation, forfeit the right to impose\nthe regulatory license fee authorized by this section.\n(8) Any party bringing suit against a city or county for an alleged violation of this\nsection occurring after July 15, 2014, shall be responsible for the payment of the\nreasonable attorney fees of the city or county in an amount determined by the court\nupon a finding by the court that the city or county did not violate this section.\n(9) (a) Any city that does not meet the population requirements of subsection (1) of\nthis section, and any county that has a city exceeding the population\nrequirements of subsection (1 ) of this section, that imposed a regulatory\nlicense fee pursuant to this section as of January 1, 2019, shall be deemed to\nmeet the requirements for doing so set out in this section and may continue to\nimpose the regulatory license fee previously establis hed pursuant to this\nsection.\n(b) Any city or county that is authorized to impose the regulatory license fee\nunder subsection (1) of this section, or under paragraph (a) of this subsection,\nthat imposed the regulatory license fee at a rate higher than five  percent (5%)\nprior to June 27, 2019, may continue to impose the regulatory license fee at a\nrate that exceeds five percent (5%). The rate shall continue to be calculated\nannually pursuant to the requirements of this section and shall not exceed the\nrate that was imposed by the city or county on January 1, 2019.\n(10) A direct shipper licensee shall be subject to and remit the regulatory license fee\nimposed by this section as though it were an establishment located in a city or\ncounty licensed to sell alcoho lic beverages or cannabis -infused beverages. This fee\nshall be considered a tax as defined in KRS 243.029.\n(11) Any city or county imposing a regulatory license fee under this section shall file\nwith the department a report showing the applicable fee amoun t and remittance\naddress for each affected license type in its jurisdiction on or before August 1,\n2020. Any adoption of this fee after July 15, 2020, or modification of the applicable\nfee amount or remittance address for each affected licensee shall be re ported to the\ndepartment within thirty (30) days of adoption by the city or county imposing the\nfee. Within twenty (20) days after receipt of the information, the department shall\ncompile and publish the information so that it is readily available to the public.","path":["KRS Chapter 243"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=55929","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:52:53Z","sha256":"64162f2ce5fbd0dea044c0969528f26bedb2dc4c44d829212fe586c07135e841","source_id":"us-ky","stale":false,"prev":"us-ky/krs-243.072","next":"us-ky/krs-243.080"},"notice":"GroundRules: Original legal text. Not legal advice."}