Frank Jemley, President and CEO of the Kentucky Association of Manufacturers (KAM), sent the following letter to members of the Kentucky House of Representatives and Kentucky Senate regarding KAM’s position on House Bill 360:
Dear Members of the House and Senate,
The Senate yesterday adopted the Senate Committee Substitute for House Bill 360 with provisions that, if enacted, would damage Kentucky’s manufacturing competitiveness. We respectfully ask the General Assembly to set aside those provisions related to last December’s unanimous Century Aluminum Kentucky Supreme Court decision.
Kentucky needs to grow manufacturing jobs by better competing and by improving our business climate. The SCS, unfortunately, would cause confusion and impose a large tax increase on Kentucky manufacturers. Kentucky’s sales tax exemptions for manufacturing, already weak in comparison to those of other states, would be substantially reduced. Our business climate and reputation would suffer accordingly.
That is not what Kentucky needs. This is not the time to tax manufacturing more.
To be clear, the Supreme Court’s Century Aluminum decision did not create new law, expand any tax exemptions, or create any major revenue loss for the Commonwealth. It simply made clear, after years of misinterpretation by the Department of Revenue that ignored legislative intent, that supplies consumed in a manufacturing process are tax-exempt under the plain language of the statute, KRS 139.470(9).
Rather than set aside that important Supreme Court decision that actually enhances Kentucky’s competitiveness, we ask you instead to help our manufacturers grow more high-paying jobs for Kentucky families. Manufacturing is on the rise in the Commonwealth. Kentucky is becoming increasingly known as a state of choice to make products that compete with anything made anywhere in the world.
We need your continued support to grow manufacturing and the opportunities it creates for more and more of our citizens.
Thank you for your consideration and your service to our Commonwealth.