The easiest way to understand where the tax money goes is to look at the disbursement of the tax dollar shown here.Taxes have been a topic of conversation even since the days of Zacchaeus. Knowing that understanding prevents misunderstanding lets look at taxation in Kentucky. Where it came from, where it goes and how, if administered correctly, it is fair.
Taxation in Kentucky began on June 1, 1792, the same date that the commonwealth was created. It is provided for in the Constitution and by statute KRS 143.450. The Constitution tells us that all property is taxable unless specifically exempted by the Constitution. Constitutional Amendments voted into law by the people gained the Exemptions that we have at this time. The most prominent exemptions are the Homestead Exemption, the Disability Exemption and the Agriculture Exemption. We also find exemptions for property owned by the Federal and State Government and by religious and educational entities.
The easiest way to understand where the tax money goes is to look at the disbursement of the tax dollar shown here.
The statutes charge PVA's with listing property within their county at Fair Market Value (FMV). This is sometimes a subjective call. When a property has been placed on the open market and sold at an arms length sale, the FMV is generally considered to be the sale price. However, when a property has been owned by the same person for several years and there is no intention or desire to sell it, then that owner is not usually receptive to the idea that the market has risen since he purchased his property and therefore because he does not want to sell, it couldn't possibly be worth as much as the property next door which just recently sold. We can quickly see the inclining trend as we watch a property sell more than once in a short period of time. This brings us to the difficult realization that our property is more valuable today than it was last year or when we purchased it and the comparison factor is always that property that recently sold. Therefore, we as citizens and also we as PVA's must make a concentrated effort to see that our property and that property in our counties are listed at FMV in order to equally disperse the tax burden. As long as equal properties are listed for taxes at equal values, then everyone will pay their fair share of funding all facets of government.
Each PVA office in the Commonwealth of Kentucky is at this time attempting to attain FMV and is using the most advanced technology that they can afford in order to comply with the mandates issued under the statutes.
We need also to be aware of the different categories of property. The most familiar is that of REAL PROPERTY which is known as land and the structures or improvements to it. The balance of property is known as PERSONAL PROPERTY and this category includes all property that does not fit into the real property category. Personal Property is further broken down into TANGIBLE PERSONAL, which we often think of as cars, boats, equipment, manufacturing machinery and inventory. The other class of Personal Property is INTANGIBLE PROPERTY, which we know as bonds, notes, accounts receivable and mortgages.
Real Property includes all lands within this state and improvements thereon.
Personal Property includes every species and character of property, tangible and intangible, other than real property.
Tangible Personal Property includes automobiles, construction equipment, manufacturing machinery, merchandise, livestock, and furniture and fixtures.
Intangible Personal Property includes property which has no intrinsic value such as bonds, mortgages, notes, and accounts receivable.
The Kentucky Constitution provides two key directives in the structure of the Property Tax System. One is that all property not specifically exempted by the Constitution itself is taxable. The other is that all property must be assessed at Fair Cash Value.
Two amendments were passed to lessen the tax burden on certain groups of property owners: the Agricultural Deferred Value Amendment and the Homestead Exemption, which was broadened to include totally disabled homeowners