Kenton County Tax Discussions Postponed, Judge Asks for More Information

Discussion of an 8 percent tax on residential and business insurance premiums was postponed by Kenton County, Ky. Fiscal Court Judge-executive Ralph Drees due to questions about how the tax would affect cities within the county that already have an insurance tax. Drees postponed the discussion to allow time for more information to be gathered on the topic.

“I just decided that I wanted to study it a little bit more,” Drees told the Cincinnati Enquirer after the fiscal court meeting. “I wanted to find out what cities had the tax. … There wasn’t any particular hurry to do it because we can’t start collecting it until after July 1 anyway.”

Based on the county’s proposal, a person who pays $100 a year in insurance premiums would pay $8 annually in taxes.

Based on what Campbell County has collected from its insurance tax, and assuming all cities match Kenton County’s proposed rate, the county would raise another $700,000 to $800,000 a year from the unincorporated areas if it approves an insurance tax, Kenton County Deputy Judge-executive Scott Kimmich has said.

Drees said the proposed tax on auto and homeowners’ insurance premiums will probably come before fiscal court Feb. 22 or at its first meeting in March. The ordinance must have two readings. And to start collecting the tax on the fiscal year that starts July 1 county officials must approve the tax by March 23.

Thirteen Kenton County cities already have insurance taxes ranging from 5 percent to 10 percent. Four cities – Crestview Hills, Edgewood, Independence and Kenton Vale – don’t have a tax.

Under Kentucky law, residents and businesses in cities that have an insurance tax could get a credit against a county insurance tax. Officials in Crestview Hills, Edgewood and Independence have said they might enact their own insurance tax if the county decides to levy the tax.

As a last resort, some Independence council members are looking into whether they can grant a “collection remittance rebate” to residents who pay property taxes, ensuring that residents end up paying no new taxes. Other cities may raise their rate to 8 percent.
Lakeside Park resident Ken Henrickson described the proposal as “a hidden tax.”

“Most people don’t even know they’re paying it,” he said. “Sometimes, it doesn’t even show up on your insurance bill. The insurance tax could go over the limit of what some motorists can afford. Then we would have to deal with more uninsured motorists, which would bring my rates up even higher.”