(A) Generally.
(1) Occupational license fee is required generally as set forth in § 111.02 above.
(2) All partnerships, S corporations, and all other entities where income is "passed through" to the owners are subject to this chapter. The occupational license tax imposed in this chapter is assessed against income before it is "passed through" these entities to the owners.
(3) 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.
(4) 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 required for federal income tax purposes.
(B) Exemptions.
(1) The occupational license tax imposed in this section shall not apply to the following persons or business entities:
(a) Any bank, trust company, combined bank and trust company, combined trust, banking and title business 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 State National Guard for active duty training, unit training assemblies and annual field training;
(c) Any compensation received by precinct workers for election training or work at election booths in state, city and local primary, regular or special elections;
(d) Public service corporations that pay an ad valorem tax on property valued and assessed by the State 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 net profit 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 net profits derived from the manufacturing or trafficking in alcoholic beverages;
(f) Insurance companies incorporated under the laws of and doing business in the Commonwealth of Kentucky except as provided in KRS 91 A.080; and
(g) Any profits, earnings, distributions of an investment fund which would qualify under KRS 154.20-250 to 154.20-284 to the extent any profits, earnings or distributions would not be taxable to an individual investor.
(2) All natural persons aged 65 and older shall be exempt from the provisions of the occupational license fee as to the first $2,000 of salaries, wages, commissions or other compensation earned by those persons in the city for work done or services performed or rendered in the city, or exempt as to the first $2,000 of net profits of any business, trade occupation or profession conducted in the city. It shall be the duty of all employers to withhold on all wages. Each individual person entitled to this refund must file FORM-ERC65 provided by or obtainable from the occupational tax office. A W-2 and proof of age must be provided to receive the refund. No more than one exemption will be allowed per person or business. This exemption may be used on either personal wages or net profits.
(3) A person engaged in agriculture business (raising crops and livestock) who employs less than five employees on a regular time basis, (450 hours during a quarter), may file a return and pay the withholding tax at the end of the taxable year.
(4) Compensation received for domestic services rendered by those persons classified as domestic servants by § 111.01 above.
(5) Those persons qualifying under KRS 68.197(2).
(Ord. 09-03, passed 6-13-2009)