(A) Except as provided in subsection (E) of this section, 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 of the Kentucky Revenue Cabinet shall be required to file and pay to the city an occupational license tax for the privilege of engaging in such activities within the city. The occupational license tax shall be measured by two percent (2%) of:
(1) All wages and compensation paid or payable in the city for work done or service performed or rendered in the city by every resident and nonresident who is an employee;
(2) The net profit from business conducted in the city by a resident or nonresident business entity.
(3) Minimum fee. In the event the tax payment required under division (2) is less than an amount sufficient to yield an annual license tax calculated at two percent (2%) of net income, equal to or in excess of the minimum license taxes of twenty-five dollars ($25.00), then the minimum license tax of twenty-five dollars ($25.00) shall apply and be charged.
(B) All partnerships, S corporations, and all other entitles where income is “passed through” to the owners are subject to this chapter. The occupational license tax imposed in the chapter is assessed against income before it is “passed through” these entities to the owners.
(C) 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 tax for the period of that taxable year during which the business entity had business activity in the city.
(D) If a business entity makes, or is required to make, a federal income tax return, the occupational license tax 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, and accounting procedures shall be as nearly as practicable identical with those required for federal income tax purposes.
(E) The following businesses are exempt and are not required to file occupational license tax on net profits:
(1) 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;
(2) 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. License whose businesses are predominatingly non-public service who are also engaged in public service activity are required to pay a license fee on their net profit denied from the non-public service activities apportioned to the city;
(3) Life insurance companies incorporated under laws of and doing business in the Commonwealth of Kentucky.
(F) The following businesses are exempt from occupational license tax on net profits, but are required to file a net profit return:
(1) Individuals and fiduciaries who receive income from the rental of real property with gross receipts received from the rental of such real property in the city less than ten thousand dollars ($10,000.00) as described in § 60.211.
(2) Persons or business entitles that have issued a license under KRS Chapter 243 to engage in manufacturing or trafficking in alcoholic beverages are required to file a return, but may exclude the portion of their net profits derived from the manufacturing or trafficking in alcoholic beverages.
(3) 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 purposes, 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, group or associations inures 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, a net profit license tax is assessed on the “unrelated business income.”
(G) The following persons are exempt from the employee occupational license tax:
(1) Any compensation received by members of the Kentucky National Guard for active duty training, unit training assemblies and annual field training;
(2) Any compensation received by precinct workers for election training or work at election booths in state, county, and local primary, regular, or special elections;
(3) Pension, interest, and dividend income. Income from pensions, interest and dividends is not subject to this occupational license fee, within the meaning of this chapter;
(4) Compensation received for domestic services rendered by those persons classified as domestic servants as defined by this chapter.
(5) Fiduciary. A fiduciary who holds in trust property, monies or properties to which another has a beneficial interest, or who receives or controls income from another person is not subject to the license fee imposed by this chapter, except where the fiduciary operates a business which is subject to a license fee for doing business within the city. The remainder of the trust is hereby exempt from any payment or annual occupational fees;
(6) Old age or retirement payment. Periodic payments, commonly recognized as old age or retirement pensions, made to persons retired from service after reaching a specified age or a stated period of employment are not subject to the license fee;
(7) Disability and unemployment. Disability, sickness and accident benefits and unemployment compensation, and other insurance payments received for personal injuries or property losses are not subject to the license fee. Payments by an employer to employees under disability, sickness and accident benefit plan are not subject to the license fee. Unemployment compensation payments by the Commonwealth of Kentucky, or any other agent, are not subject to the license fee. Payments received for personal injuries and property losses are not subject to the license fee;
(8) Death benefits. Death benefits payable to the beneficiary of an employee or to his estate, whether payable in a single sum or otherwise, are not subject to the license fee;
(9) Worker's compensation benefits. Benefits arising under the Worker's Compensation Act as compensation for disabilities sustained during the course of employment, together with any amount of damages received by suit or agreement, on account of such liability are not subject to the license fee;
(10) Employee contributions to qualified retirement plans. Employee contributions to retirement plans which are properly qualified and approved by the United States Internal Revenue Service;
(11) Entertainers who perform for compensation no more than five (5) times in a calendar month.
(Ord. No. 21.90, 10-16-90; Amd. Ord. 14.91, § 1, 6-4-91; Amd. Ord. No. 15-08, 7-1-08; Amd. Ord. No. 08-14, § 1, 4-15-14)