COAL GROVE — Changes in Coal Grove’s tax laws means some residents working outside the village will have to begin paying a portion of the village’s income tax, but others who were paying more than most will actually receive a break.

An article in Tuesday’s Ironton Tribune may have caused some confusion and village officials said they want residents to understand that changes to the tax laws were designed to be more fair and ensure that all residents are paying at least one quarter of 1 percent in income tax regardless of where they work.

“This equalizes everyone. If you are paying an income-based fee, you get credit for it,” said local attorney Mark McCown, who the village employs as its solicitor and was tasked with interpreting how the village’s tax laws worked with other states and municipalities. “In addition to that it recognizes that citizens of an area also have to pay for services not just the people who work there.”

Coal Grove has a 1 percent income tax, the most allowed without the approval of voters. However, a longstanding reciprocity agreement meant that someone living in the village and working elsewhere would pay that municipality’s income tax but be excused from paying anything to the village.

Village council passed an ordinance change in December 2007 that modified the reciprocity agreement so that it would only honor up to three quarters of that 1 percent paid elsewhere.

This means that a Coal Grove resident working in Ironton would be required to continue to pay Ironton’s 1 percent but now pay .25 percent of the village’s income tax as well.

The change also extended the reciprocity to now apply to Kentucky’s municipalities that technically have an occupational tax, not a user fee, and also extended to areas like Boyd County, Ky., that aren’t municipalities at all.

Under the old system, an individual living in Coal Grove and working in Ashland paid that city’s 1.5 percent occupational tax but didn’t pay the village of Coal Grove anything.

Now, those individuals still have to pay Ashland but are also required to pay the village .25 percent of their income.

However, since Boyd County has a 1 percent tax, but it isn’t a municipality, a CG resident used to have to pay the village’s entire 1 percent since the reciprocity didn’t apply. The ordinance change means that these individuals will only have to pay the .25 percent to the village and the full amount to Boyd County.

The tax change will have no effect on someone who is already and living and working in the village.

These changes won’t take effect until 2009 because they are based on the 2008 tax year.

Officials don’t have an exact dollar amount that these changes will net the village and said it was more about making sure everyone is paying at least a quarter of a percent to the village.

“We aren’t going to make a lot of money. Our collections won’t change that much,” said village clerk Debbie Fields. “We will lose three quarters of a percent from those working in Boyd County but be gaining a quarter of a percent from those in other municipalities.”

“We are really trying to make it more fair so that everyone living in the village is at least paying something for those services.”