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The purpose of this chapter is to impose an occupational license fee on those engaged in franchises, trades, occupations, professions and other businesses in the city and provide the necessary ancillary regulations for enforcement and administration.
(Ord. 2007-12-01, passed 12-19-07)
Subject to the provisions of KRS 67.750 and 67.795, and except as otherwise provided herein, an Occupational License Fee is hereby levied and imposed upon all persons and business entities engaged in any franchise, trade, occupation, profession or other businesses in the city, for the privilege of that engagement.
(Ord. 2007-12-01, passed 12-19-07)
(A) Every person and business entity operating or engaged in any business, franchise, trade, occupation, or profession in the city and every employer required by this chapter or statute to withhold the payroll fee specified herein, shall apply for and obtain an occupation license before commencing business or work activity in the city.
(B) Each applicant shall complete the city’s application for an Occupational/Business License and pay the application fee of $60. No application for an occupational license shall be accepted or received by the Clerk/Treasurer without payment of the application fee, and payment of any occupational license fee or business regulatory license fee then or otherwise due from the applicant.
(C) Licensees shall notify the city of any changes in address, cessation of business, or other changes rendering the information previously supplied to the city on the occupational license application inaccurate.
(D) The form and content of the annual Occupational/Business License required by this chapter and the application for it shall be determined by the City Clerk/Treasurer.
(E) All applications for an occupational business license or a regulatory business license shall be reviewed by the City Clerk/Treasurer and may be referred thereby to the City Administrative Officer or other city employees or officers
(Ord. 2007-12-01, passed 12-19-07)
(A) Except as provided in § 110.07, every person or business entity engaged in any business for profit and any person or business entity that is required to make a filing with the Internal Revenue Service or the Kentucky Revenue Cabinet shall be required to file and pay to the city an occupational license fee for the privilege of engaging in such activities within the city. The occupational license fee shall be measured as follows:
(1) The occupational license fee for employees shall be 2.50% of all wages and compensation paid or payable in the city for work done or services performed or rendered in the city by every resident and nonresident who is an employee;
(2) The occupational license fee on gross receipts shall be as follows: license fees for trades, businesses, and occupations in the city shall be paid based upon the gross receipts of the trade, business or occupation.
(B) Computation shall be made upon forms provided by the City Clerk/Treasurer as follows:
(1) Determine the gross receipts from the preceding calendar year,
(2) (a) For the first $99,999.99 of gross receipts, or portions thereof, the license rate shall be $60.00;
(b) For gross receipts of $100,000.00 to $199,999.99, the license rate shall be $95.00;
(c) For gross receipts of $200,000.00 to $299,999.99, the license rate shall be $195.00;
(d) For gross receipts of $300,000.00 to $399,999.99, the license rate shall be $290.00;
(e) For gross receipts of $400,000.00 to $499,999.99, the license rate shall be $450.00;
(f) For gross receipts of $500,000.00 to $699,999.99, the license rate shall be $755.00;
(g) For gross receipts of $700,000.00 to $999,999.99, the license rate shall be $1,040.00;
(h) For gross receipts of $1,000,000.00 to $2,999,999.99, the license rate shall be $1,925.00;
(i) For gross receipts of $3,000,000.00 to $4,999,999.99, the license rate shall be $3,025.00;
(j) For gross receipts of $5,000,000.00 to $7,499,999.99, the license rate shall be $4,125.00;
(k) For gross receipts of $7,500,000.00 to $9,999,999.99, the license rate shall be $5,225.00;
(l) For gross receipts of $10,000,000.00 and over, the license rate shall be $6,325.00.
(C) The minimum fee liability on gross receipts under this section shall be a minimum of $60. The maximum fee shall be $6,325.
(D) If any business entity dissolves, ceases to operate, or withdraws from the city during any taxable year, or if any business entity in any manner surrenders or loses its charter during any taxable year, the dissolution, cessation of business, withdrawal, or loss or surrender of charter shall not defeat the filing of returns and the assessment and collection of any occupational license fee for the period of that taxable year during which the business entity had business activity in the city.
(Ord. 2007-12-01, passed 12-19-07)
The occupational license fee imposed in this chapter shall not apply to the following persons or business entities:
(A) Any bank, trust company, combined bank and trust company, or trust, banking and title insurance company organized and doing business in this state, any savings and loan association whether state or federally chartered;
(B) Any compensation received by members of the Kentucky National Guard for training, unit training assemblies, annual field training and active duty;
(C) Any compensation received by precinct workers for election training or work at election booths in state, county, and local primary, regular, or special elections;
(D) Public Service Corporations that pay an ad valorem tax on property valued and assessed by the Kentucky Department of Revenue pursuant to the provisions of KRS 136.120. Licensees whose businesses are predominantly non-public service who are also engaged in public service activity are required to pay a license fee on their gross receipts derived from the non-public service activities apportioned to the city;
(E) Persons or business entities that have been issued a license under KRS Chapter 243 to engage in manufacturing or trafficking in alcoholic beverages. Persons engaged in the business of manufacturing or trafficking in alcoholic beverages are required to file a return, but may exclude the portion of their gross receipts derived from the manufacturing or trafficking in alcoholic beverages;
(F) Insurance companies incorporated or doing business under the laws of the Commonwealth of Kentucky;
(G) A minister of religion who has been ordained in accordance with the ceremonial ritual or discipline of a recognized church, religious sect, or religious organization, to teach and preach its religious doctrines or to administer its rights in public worship, in the performance of one or more of those duties. However, it is not intended to exempt an ordained minister of religion from the necessity of paying a license fee for work done or services performed in the city in activities not connected with his or her regular duties as a minister of religion.
(H) No church, religious congregation, or religious society of any creed is required to withhold or deduct any sum from the wages, salaries, commissions, or other compensation due by the church, religious congregation, or religious society to its employees as salaries, wages, commissions, or other compensation. However, this failure to so withhold by such employers shall not relieve the employees of the churches, religious congregations, or religious societies from the payment of license fees required by this chapter.
(I) The provisions of this chapter shall not apply to any business, occupation, or profession which is exempt from municipal licensing or license taxes pursuant to state or federal law.
(J) The provisions of this chapter shall not apply to vendors participating in flea market events sponsored by any non-profit, charitable organization with 501(c)(3) tax-exempt status as designated by the Internal Revenue Service, located within the city, where such event is held entirely upon or within property owned or controlled by such non-profit, charitable organization. This exemption shall only apply to one flea market event per year for each non-profit, charitable organization located within the city sponsoring the event. The event shall not exceed one calendar day in duration. The non-profit, charitable organization sponsoring the event shall comply with § 118.02 that requires a yard sale permit.
(K) Any usual activities of Boards of Trade, Chambers of Commerce, trade associations or unions, Community Chest funds or foundations, corporations or associations organized and operated exclusively for religious, charitable, scientific, literary, educational or civic purpose, or for the prevention of cruelty to children or animals; or clubs or fraternal organizations operated exclusively for social, literary, educational or fraternal purposes where no part of the income or receipts of such units, groups, or associations insures to the benefit of any private shareholder or individual. To qualify for this exemption the organization must submit satisfactory proof of their exempt status for federal income tax purposes. If any part of the earnings of such business inures to the benefit of any person, it shall be sufficient to defeat the exemption. If an organization earns “unrelated business income” as defined and administered in § 511 of the Internal Revenue Code, the occupational license fee shall be assessed on the “unrelated business income.”
(Ord. 2007-12-01, passed 12-19-07)
(A) Except as provided in division (D) below, gross receipts shall be apportioned as follows:
(1) For business entities with both payroll and sales revenue in more than one tax district, by multiplying the gross receipts by a fraction, the numerator of which is the payroll factor, described in division (B) below, plus the sales factor, described in division (C) below, and the denominator of which shall be two; and
(2) For business entities with sales revenue in more than one tax district, by multiplying the gross receipts by the sales factor as set forth in division (C) below.
(B) The payroll factor is a fraction, the numerator of which is the total amount paid or payable in the city during the tax period by the business entity for compensation, and the denominator of which is the total compensation paid or payable by the business entity everywhere during the tax period. Compensation is paid or payable in the city based on the time the individual’s service is performed within the city.
(C) The sales factor is a fraction, the numerator of which is the total sales revenue of the business entity in the city during the tax period, and the denominator of which is the total sales revenue of the business entity everywhere during the tax period.
(1) The sale, lease, or rental of tangible personal property is in the city if:
(a) The property is delivered or shipped to a purchaser, other than the United States government, or to the designee of the purchaser within the city regardless of the f.o.b. point or other conditions of the sale; or
(b) The property is shipped from an office, store, warehouse, factory or other place of storage in the city and the purchaser is the United States government.
(2) Sales revenues, other than revenues from the sale, lease or rental of tangible personal property or the lease or rental of real property, are apportioned to the city based upon a fraction, the numerator of which is the time spent in performing such income-producing activity within the city and the denominator of which is the total time spent performing that income-producing activity.
(3) Sales revenue from the sale, lease, or rental of real property is allocated to the tax district where the property is located.
(D) If the apportionment provisions of this section do not fairly represent the extent of the business entity’s activity in the city, the business entity may petition the city or the city may require, in respect to all or any part of the business entity’s business activity, if reasonable:
(1) Separate accounting;
(2) The exclusion of any one or more of the factors;
(3) The inclusion of one or more additional factors which will fairly represent the business entity’s business activity in the city; or
(4) The employment of any other method to effectuate an equitable allocation and apportionment of gross receipts. The city must approve any alternate apportionment method prior to its implementation by the business entity. Once an alternate apportionment method is approved by the city, the business entity must apply such apportionment scheme in all future tax years, unless otherwise directed by the city.
(E) When compensation is paid or payable for work done or services performed or rendered by an employee, both within and without the city, the license fee shall be measured by that part of the compensation paid or payable as a result of work done or service performed or rendered within the city. The license fee shall be computed by obtaining the percentage which the compensation for work performed or services rendered within the city bears to the total wages and compensation paid or payable. In order for the city to verify the accuracy of a taxpayer’s reported percentages under this division, the taxpayer shall maintain adequate records.
(F) All partnerships, S corporations, and all other entities where income is “passed through” to the owners are subject to this chapter. The occupational license fee imposed in this chapter is assessed against gross receipts before it is “passed through” these entities to the owners.
(G) If a business entity makes, or is required to make, a federal income tax return, the occupational license fee shall be computed for the purposes of this chapter on the basis of the same calendar or fiscal year required by the federal government, and shall employ the same methods of accounting required for federal income tax purposes.
(H) If any business entity dissolves, ceases to operate or withdraws from the city during any taxable year, or if any business entity in any manner surrenders or loses it charter during any taxable year, the dissolution, cessation or business, withdrawal, or loss or surrender of charter shall not defeat or excuse the requirement to file returns nor the assessment and collection any occupational license fee for the period of that taxable year during which the business entity had business activity in the city.
(Ord. 2007-12-01, passed 12-19-07)
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