Request By:
Honorable Ralph E. McClanahan
Estill County Judge/Executive
Irvine, Kentucky 40336
Opinion
Opinion By: Robert F. Stephens, Attorney General; Rickie L. Pearson, Assistant Attorney General
Re: Taxes Imposed upon the Production of Crude Petroleum by a County
Since our recent pronouncement on KRS 137.120 (OAG 78-368), we have had cause to reconsider that opinion.
The legislative history and a former opinion by this office, OAG 72-478, denotes that the tax imposed upon the production of crude petroleum by a county pursuant to KRS 137.120 is an excise tax and not an occupational license tax. Since the tax in question is an excise tax, county government is without power to impose the tax under KRS 137.120.
C.C.C. Coal Company, Inc. v. Pike County, Ky., 536 S.W.2d 467 (1976).
The rationale for this conclusion is drawn from the fact that in 1948 an amendment was made to KRS 137.120 changing its title to what it is known as at the present. With such a change, the case of
Swiss Oil Corp. v. Shanks, 273 U.S. 405, 47 S. Ct. 393, 71 L. Ed. 709 (1927) which held that the petroleum tax was a license tax which a county could impose lost its meaning. Thus, the amendment meant that a county could not levy a tax under this statutory provision since it can only levy license and ad valorem taxes.
We must, with our dedication to fairness, uniformity, and professionalism, respectfully withdraw OAG 78-368 and, in lieu thereof, issue this opinion.
Please find enclosed a copy of OAG 72-478.