Perry County Fiscal Court sues Kentucky state government over ability to impose restaurant tax

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Published: Feb. 6, 2023 at 4:31 PM EST
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HAZARD, Ky. (WYMT) - 50 cities across the state of Kentucky currently impose a restaurant tax.

Hazard, which has a population of more than 5,000 people per the U.S. Census Bureau, is not one of them. That is despite having a larger population than some cities that do like Jackson (2,208) and Pineville (1,662).

The timeline to change that ended in 2015.

“There was still coal severance money coming in and things like that so it wasn’t seen as a necessary thing at the time for that current administration, but then all of that kind of dried up,” City of Hazard Downtown Coordinator Bailey Richards said.

After the Kentucky legislature passed House Bill 331, which took effect in 2015, every city in the state except Louisville was considered a “home rule city,” taking away their ability to impose a restaurant tax.

By filing a lawsuit, Hazard and Perry County officials are looking to change that, saying it would benefit the area.

“It’s a pass through amount. It is added on to the cost of an item paid at a restaurant. So, you’re already at a luxury by being at a restaurant, and all it adds is one, two or three percent depending on the size that someone ends up doing,” Bailey Richards said.

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A restaurant tax can be up to 3% in Kentucky and has to fund the city’s tourism board.

Funding tourism in the area could lead to athletic benefits, including a sports park for teams to play at, like the Knott County Sportsplex or Letcher County Recreation Center.

“With us at Hazard, if we plan a big tournament or something like that, it gives us multiple fields to be able to use to have a bigger tournament,” Hazard High School Athletic Director Eddie Browning said.

Becoming a central location could also make Hazard a bigger name in the state.

“We want the same tools as other communities our size and same opportunities for our kids. These tools are working for other communities in ways that have improved quality of life and economic development in those communities,” Perry County Judge-Executive Scott Alexander said.

Officials also say the money could help expand hiking trails and other adventures in the county.