KRS 138.715 — Civil penalties and interest

(1) If any licensee neglects or refuses to make the return or pay the tax at the time
provided in KRS 138.685, a penalty of twenty percent (20%) of the tax and interest
at the tax interest rate as defined in KRS 131.010(6) from the date when due shall
be paid on the tax.
(2) If any licensee subject to the penalty provided in subsection (1) of this section
submits to the department in writing the reasons for failure to comply with KRS
138.660 to 138.7291 and if the department finds the reasons sufficient evidenc e or
justifiable cause for modifying the penalty provided in subsection (1) of this
section, it may modify the penalty enacted therein to five percent (5%) of the
amount of the tax due and delinquent, provided the five percent (5%) penalty may
be reduced to one percent (1%) if the violation is the first violation by the taxpayer
within the twelve (12) months.
(3) If the penalties provided by this section are collected by proceedings in court, an
additional penalty of twenty percent (20%) shall be collected and distributed as is
authorized by KRS 134.552. Whenever any licensee neglects or refuses to make
and file any report for any calendar quarter as required by KRS 138.685, or files an
incorrect or fraudulent report, the department shall determine after an investigation
the amount of the liability which the licensee has incurred under KRS 138.660 to
138.7291 for any particular quarter and assess and collect the amount of tax and
penalties due.
(4) Any licensee who fails to make any report required under the provisions of KRS
138.660 to 138.7291 within the time allowed shall be required to pay a penalty of
five hundred dollars ($500) for any offense. The penalty is to be assessed and
collected in the manner provided for the assessment and collection of taxes, or the
licensee may be proceeded against in a civil action instigated by the department. In
addition, such licensee may be compelled to make the required return.
(5) In any action for the collection of taxes due under KRS 138.660 to 138.7291 and
any penalt ies or interest imposed in connection therewith, an assessment by the
department of the amount of tax due and the interest or penalties due to the state
shall constitute prima facie evidence of the claim of the state and the burden of
proof shall be on the licensee to show that the assessment was incorrect or contrary
to law.