Request By:
Mr. Robert Case, Sheriff
Mason County Sheriff's Department
P.O. Box 502
Maysville, Kentucky 41056
Opinion
Opinion By: Steven L. Beshear, Attorney General; By: Alex W. Rose, Assistant Attorney General
In your letter of June 28, 1983, you asked when title to tax monies which you collected and deposited in an interest-bearing account passes to the appropriate taxing districts. State, county and district taxes are collected by the sheriff pursuant to KRS 134.140, which statute was amended by the General Assembly during the 1982 Regular Session. That statute as amended, effective March 9, 1982, permits a county sheriff, except in urban-county governments, to invest any tax revenues held in his possesion from the time of collection until the time of distribution. The restrictions on those investments are set out in KRS 66.480.
It must be presumed that title to these tax monies passes to the state, county and local taxing districts immediately upon collection by the sheriff, since case law holds that the sheriff is a bailee and all taxes collected by him constitute trust funds in his custody as bailee. Maryland Casualty Co. v. Walker, Ky., 78 S.W.2d 34 (1934); Knox County v. Lewis' Adm'r., Ky., 69 S.W.2d 1000 (1934); Denny v. Thompson, Ky., 33 S.W.2d 670 (1930). Requirements as to the disposition of the investment earnings from these tax monies are specifically set out in Subsections (3)(b) through (d) of KRS 134.140. These subsections state as follows:
"(b) At the time of his monthly distribution of taxes to the district board of education, the sheriff shall pay to the board of education that part of his investment earnings for the month which is attributable to the investment of school taxes, but this subsection shall not be construed to prohibit the sheriff from obtaining his expenses not to exceed the rate of four percent (4%) of the earned monthly investment income for the administration of this investment fund.
(c) In those counties where the sheriff pays his fees and commissions to the county and the salaries and expenses of his office are paid by the county, the sheriff shall pay to the county treasurer the investment earnings, other than those paid to the board of education in compliance with subsection (3)(b) of this section, at the time of his monthly distribution of taxes to the county.
(d) In those counties where the office of sheriff is funded in whole or in part by fees and commissions, the sheriff may use investment earnings, other than those which must be paid to the board of education in compliance with subsection (3)(b) of this section, to pay lawful expenses of his office, and the remainder shall be paid to the fiscal court at the time of the sheriff's annual settlement for county and district taxes and excess fees."
We trust that the above information answers your question regarding this matter.