Request By:
Mr. Kenneth Shadowen
Superintendent
Livingston County Schools
Smithland, Kentucky 43081
Opinion
Opinion By: Steven L. Beshear, Attorney General; By Alex W. Rose, Assistant Attorney General
In your letter of December 29, 1981, you asked whether long distance telephone calls made within the state were subject to the 3% utility gross receipts license tax for schools.
The tax to which you have referred is imposed pursuant to KRS 160.613, which states in part:
"There is hereby authorized a utility gross receipts license tax for schools not to exceed three percent (3%) of the gross receipts derived from the furnishing, within the county, of telephonic and telegraphic communications services . . . 'Gross receipts' includes all amounts received in money, credits, property, or other money's worth in any form, as consideration for the furnishing of the above utilities . . . ."
The only exemptions permitted from "gross receipts" are
". . . amounts received for furnishing energy or energy-producing fuels, used in the course of manufacturing, processing, mining, or refining to the extent that the cost of the energy or energy-producing fuels used exceeds three percent (3%) of the cost of production, and . . . amounts received for furnishing any of the above utilities which are to be resold."
For purposes of statutory construction, subsection (4) of KRS 446.080 requires that "all words and phrases shall be construed according to the common and approved usage of language . . ." Kentucky courts have previously held that when language is clear and unambiguous it will be held to mean what it plainly expresses. Commonwealth v. Fritz, Ky., 236 S.W.2d 262 (1950); Hawley Coal Co. v. Bruce, 252 Ky. 455, 67 S.W.2d 703 (1934).
From the wording of KRS 160.613 it is clear that the installation, maintenance and continued provision of telephones to residents within a county must constitute the furnishing of "telephonic communications services." The furnishing of such services in any given instance permits an individual both to receive calls on that telephone and to make calls from that telephone. The statutory phrase "telephonic communications services" makes no distinction between local calls and intrastate long distance calls. Consequently, there is no reasonable basis to assume that the legislature ever intended to make such a distinction.
The furnishing of such services "within the county" is the taxable event and the basis of the county's jurisdiction to impose the gross receipts tax. See Texas Gas Trans. Corp. v. Board of Ed. of Ballard County, Ky., 502 S.W.2d 82 (1973). Any intrastate long distance telephone call which is made to or from a telephone located within a county where the tax is applicable and which is billed to that telephone is subject to the utility gross receipts license tax. The customer's payment for such a call would then be included in "gross receipts" as defined in the statute. Any suggestion that such a payment should not be included in gross receipts is simply not supported by the plain language in KRS 160.613. The only amounts that are to be exempted from gross receipts are set out in that statute and those exemptions do not include receipts from intrastate long distance telephone calls.