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(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)
(A) Each employer who employs one or more person(s) working within the city is required to obtain an occupational license and, if applicable, shall complete and execute the city’s Application for Occupational License on behalf of each of its employees. The employee is not required to apply with the city unless the employee has earned income other than “wages and other compensation.”
(B) Every employer making payment of compensation to an employee shall deduct and withhold from the compensation an occupational license fee calculated under § 110.06.
(C) Every employer required to deduct and withhold a fee under this section shall, for the quarter ending after January 1 and for each quarter ending thereafter, on or before the end of the month following the close of each quarter, make a return and report to the city, and pay to the city, the fee required to be withheld under this section, unless the employer is permitted or required to report within a reasonable time after some other period as determined by the city.
(D) Every employer who fails to withhold or pay to the city any sums required by this subchapter to be withheld and paid shall be personally and individually liable to the city for any sum or sums withheld or required to be withheld in accordance with the provisions of this section.
(E) The city shall have a lien upon all the property of any employer who fails to withhold or pay over to the city sums required to be withheld under this section. If the employer withholds, but fails to pay the amounts withheld to the city, the lien shall commence as of the date the amounts withheld were required to be paid to the city. If the employer fails to withhold, the lien shall commence at the time the liability of the employer is assessed by the city.
(F) Every employer required to deduct and withhold a fees under this section shall annually on or before February 28 of each year complete and file on a form furnished or approved by the city a reconciliation of the occupational license fee withheld where compensation is paid or payable to employees. Either copies of federal forms W-2 and W-3, transmittal of wage and tax statements or a detailed employee listing with the required equivalent information, as determined by the city, shall be submitted.
(G) Every employer shall furnish each employee a statement on or before January 31 of each year showing the amount of compensation and occupational license fee deducted by the employer from the compensation paid to the employee for payment to the city during the preceding calendar year.
(H) An employer shall be liable for the payment of the fee required to be deducted and withheld under this section.
(I) The president, vice president, secretary, treasurer or any other person holding an equivalent corporate office of any business entity subject to this section shall be personally and individually liable, both jointly and severally, for any fee required to be withheld from compensation paid or payable to one or more employees of the business entity, and neither the corporate dissolution or withdrawal of the business entity from the city, nor the cessation of holding any corporate office, shall discharge that liability; provided that the personal and individual liability shall apply to each and every person holding the corporate office at the time the fee becomes or became obligated.
(J) Notwithstanding divisions (H) and (I) above, every employee receiving compensation in the city subject to the fee imposed under § 110.06 shall be personally liable for any amount due. In all cases where the employer does not withhold the fee levied under this chapter from the employee, such employee or employees shall be responsible for filing with the city each quarter in the same manner as if they were the employer.
(Ord. 2007-12-01, passed 12-19-07)
(A) Unless otherwise specified in this chapter, every business entity and employer required to have an occupational license from the city shall provide to the city all information necessary to assess the appropriate occupational license fee. All business entity returns made for the preceding taxable year shall be made not later than April 15, except returns made on the basis of a fiscal year, which shall be made by the fifteenth day of the fourth month following the close of the fiscal year. The returns shall be made on the forms available from the office of the City Clerk/Treasurer.
(B) Every business entity shall submit a copy of its federal income tax return and all supporting statements and schedules at the time of filing its Occupational License Return with the city. Whenever, at the discretion of the city, it is necessary to examine the federal income tax return of any business entity to audit the return, the city may compel the business entity to produce for inspection a copy of any statements and schedules in support thereof that have not been previously filed. The city may also require copies of reports or adjustments made by the federal government and/or other financial documents maintained by the business entity.
(C) Every business entity subject to an occupational license fee governed by the provisions of this chapter shall keep records, render under oath statements, make returns, and comply with rules and regulations as the city from time to time may prescribe. Whenever the city deems it necessary, the city may require a business entity, by notice served to the business entity, to make a return, render statements under oath, or keep records, as the city deems sufficient to determine the fee liability of the business entity.
(D) The city may require, for the purpose of ascertaining the correctness of any return or for the purpose of making an estimate of the taxable income of any business entity, the attendance of a representative of the business entity or of any other person having knowledge of the business entity or on the premises.
(E) The full amount of the unpaid fee payable by any person or business entity, as appears from the face of the return and without regard to any extension of time for filing the return, shall be paid to the city at the time the occupational license fee return is filed with the city.
(F) Every business entity making payments of $600 or more to persons other than employees for services performed within the city are responsible for maintaining records of those payments and for completing Form 1099 SF, Statement of Non-Employee Compensation, on or before February 28 of the year following the close of the calendar year in which such compensation was paid. Persons or business entities not required to remit a Form 1099 remain liable to the city to remit equivalent information for any compensation made to persons or business entities that are not employees.
(G) If the time for filing a return is extended, the business entity shall pay, as part of the fee, an amount equal to 12% per annum simple interest on the fee shown due on the return, but not previously paid, from the time the fee was due until the return is actually filed and the fee paid to the city. Any fraction of a month shall count as an entire month.
(Ord. 2007-12-01, passed 12-19-07)
The city may grant any business entity an extension of not more than six months for filing its return, unless a longer extension has been granted by the Internal Revenue Service or a longer extension is agreed to by the city and the business entity. An extension may only be granted if the business entity, on or before the date prescribed for payment of the occupational license fee, requests the extension and pays the amount properly estimated as its fee. All requests for an extension shall be made in writing.
(Ord. 2007-12-01, passed 12-19-07)
(A) Where there has been an overpayment of fee due under § 110.06, a refund or credit shall be made to the employer, but only to the extent of the overpayment and only if a written application for refund or credit is received by the city within two years from the date the overpayment was originally made.
(B) An employee who has compensation attributable to activities performed outside the city, based on time spend outside the city, whose employer has withheld and remitted to his or her city, the occupational license fee on the compensation attributable to activities performed outside the city, may file for a refund within two years of the date prescribed by law for the filing of a return. The employee shall provide a schedule and computation sufficient to verify the refund claim and the city may confirm with the employer the percentage of time spent outside the city and the amount of compensation attributable to activities performed outside the city prior to approval of the refund.
(C) Where there has been an overpayment of fee under § 110.06, a refund or credit shall be made to any person or business entity to the extent of the overpayment only if a written application for refund or credit is received by the city from the person or business entity within two years from the date the overpayment was made. No refund shall be made of any fee paid unless a complete return is filed as required by § 110.10.
(Ord. 2007-12-01, passed 12-19-07)
(A) As soon as practicable after each return is received, the city may examine and audit the return. If the amount of fee computed by the city is greater than the amount returned by the business entity, the additional fee shall be assessed and a notice of assessment mailed to the business entity by the city within five years from the date the return was filed, except as otherwise provided in this section.
(1) In case of a failure to file a return or of a fraudulent return, the city may assess the additional fee at any time and there shall be no time limitations for bringing an action under this chapter.
(2) In the case of a return where a business entity understates gross receipts, or omits an amount properly includable in gross receipts, or both, which understatement or omission, or both, is in excess of 25% of the amount of gross receipts stated in the return, the additional fee may be assessed at any time within six years after the return was filed.
(3) In the case of an assessment of additional fee relating directly to adjustments resulting from a final determination of a federal audit, the additional fee may be assessed before the expiration of the times provided in this subsection, or six months from the date the city receives the final determination of the federal audit from the business entity, whichever is later.
(4) The times provided in this division may be extended by agreement between the business entity and the city. For the purposes of this division, a return filed before the last day prescribed by law for filing the return shall be considered as filed on the last day. Any extension granted for filing the return shall also be considered as extending the last day prescribed by law for filing the return.
(B) Every business entity shall submit a copy of the final determination of the federal audit within 30 days of the conclusion of the federal audit.
(C) In additional to all other remedies available to the city, the city may initiate a civil action for the collection of any additional unpaid fee within the times prescribed in division(A) above.
(Ord. 2007-12-01, passed 12-19-07)
(A) The City Clerk/Treasurer or any employee or agent designated thereby is authorized to examine the books, papers and records of any employer or supposed employer, person, or of any business entity or supposed business entity in order to determine the accuracy of the any return made, or if no return was made to ascertain the amount of occupational fee due under the terms of this chapter. Each such employer or supposed employer or business entity or supposed business entity shall give to the Clerk/Treasurer or his or her duly authorized agent or employee the means, facilities, and opportunities of the making of such examination and investigation. The Clerk/Treasurer is hereby authorized to examine any person under oath concerning any compensation or gross receipt which was shown or should have been shown in a return and may compel the production of books, papers, records, and the attendance of all persons, whether as parties or as witnesses, whom he or she believes to have knowledge of such gross receipts or compensation, to the extent that any officer empowered to administer oaths in this Commonwealth is permitted to so order.
(B) No suit shall be maintained in any court to restrain or delay the collection or payment of the fee levied by this chapter.
(C) Any fee collected pursuant to the provisions of this chapter may be refunded or credited with in two years of the date prescribed by law for the filing of a return or the date the money was paid to the city, whichever is the later, except that:
(1) In any case where the assessment period contained in § 110.10 has been extended by an agreement between the business entity and the city, the limitation contained in this division shall be extended accordingly.
(2) If the claim for refund or credit relates directly to adjustments resulting from a federal audit, the business entity shall file a claim for refund or credit within the time provided for in this subsection or six months from the conclusion of the federal audit, whichever is later.
(D) For the purposes of division (E) below, a return filed before the last day prescribed by law for filing the return shall be considered as filed on the last day.
(E) The authority to refund or credit overpayments of fees collected pursuant to this chapter is vested exclusively in the city.
(F) In order to reduce administrative costs and to minimize paperwork for employers, employees, and business entities, this chapter shall be administered in conjunction any of the city’s business regulations or police powers as maybe deemed necessary and efficient.
(Ord. 2007-12-01, passed 12-19-07)
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