Kentucky Association of Counties

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The Kentucky Association of Counties


County Champion


Top Issue: Leveling the Playing Field


Legislative Priority

KACo supports:
• Allowing local decisions on tax rates and collection that are currently authorized for cities but forbidden for county governments to be made equitable for all local governments.
• Requiring cities that annex county land to hold county revenues in that area harmless on tax collected before annexation.
• Repealing the arbitrary 30,000 population threshold and mandatory credit to the city for occupational tax collected within city limits.
• Repealing the mandatory credit to the city for insurance premium tax collected within city limits.



Due to a practice known as city crediting, two of the three significant sources of tax revenue available to local governments are significantly less viable revenue-generating options for counties. Counties must credit city insurance premium taxes against the county levy in all counties. Counties that add an occupational tax or modify it after reaching a population of 30,000 or more are also required to credit city occupational license fees against the county levy. City crediting diminishes the availability of resources for counties to provide the state-mandated services, such as elections and public safety, that every county resident, including those within the city limits, benefits from.


Data Snapshot

City crediting encourages targeted annexation by cities to gain more revenue, which comes at the county’s expense.

When cities annex additional land, they immediately take the insurance premium and occupational tax revenue (in counties with more than 30,000 people) away from the county. This policy is unfair to counties and all Kentuckians who rely on countywide services.


Kentucky Association of Counties
400 Englewood Drive, Frankfort, KY 40601