Cities of the previous fourth and fifth class are authorized by KRS 91A.400 to levy a tax on restaurant sales to fund local tourism commissions. All money received from a restaurant tax must be turned over to the community’s tourism and convention commission. A consolidated local government is authorized by KRS 153.460 to impose a restaurant tax to fund the operating costs of a multipurpose arena.
Only around 19 percent of cities allowed to levy a restaurant tax have chosen to do so. Although restaurant taxes accounted for only one percent of total tax collection, they provided $22.9 million in revenue in FY 2017.