(A) Non-profit organizations, as determined by the Internal Revenue Service approval of not-for-profit status, must file an application for a business regulatory license, but are exempt from the $30 administrative cost associated with this filing. Upon the filing of an application by a non-profit organization and confirmation of its not-for-profit status, the Finance Department will issue a business regulatory license certificate to this organization.
(B) The following business entities are exempt under state law from the occupational license tax and are not required to file a city occupational license return (“Form OL-3” or “OL-3”), except as otherwise noted:
(1) Public service corporations that pay an ad valorem tax on property valued and assessed by the state’s Department of Revenue, pursuant to the provisions of KRS 136.120. To be entitled to this exemption, companies are required to show that they are actually assessed as public service companies by the state’s Revenue Cabinet and that they in fact pay an ad valorem tax based on this assessment. Licensees whose businesses are predominantly non-public service, but who are also engaged in public service activity are required to pay a license tax on their net profits derived from the non-public service activities apportioned to the city;
(2) Life insurance companies incorporated under the laws of and doing business in the commonwealth (see KRS 136.320(4), (5)); and
(3) Banks, trust companies, combined bank and trust companies, combined trust, banking and title businesses, and savings and loan associations, whether state or federally chartered, that are expressly exempted by KRS 92.300.
(C) The following business entities are exempt from the net profit occupational license tax, but are required to file a Form OL-3:
(1) Any business entity engaged in the letting or rental of any dwelling unit in the city that owns no more than one dwelling unit for lease in the city and whose rents from all dwelling units owned, whether within or outside the city when taken together, do not exceed $6,000;
(2) Persons whose sole business activity is the manufacture of and/or sale of alcoholic beverages. Persons engaged in the business of manufacturing and/or selling alcoholic beverages are required to file a return, but may exclude the portion of their net profits derived from such manufacturing and/or sale of alcoholic beverages; and
(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 animal; 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 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 I.R.C. § 511, a net profit license tax is assessed on the “unrelated business income”.
(D) The following persons are exempt from the employee occupational license tax:
(1) Persons whose sole wages, salaries, commissions or other wages and other compensations earned in the city are derived from service as members of the Kentucky National Guard for active duty training, unit training assemblies and annual field training;
(2) Compensation received by persons who have been ordained in accordance with the ceremonial ritual or discipline of a recognized church, religious sect or other religious organization, for the purpose of teaching and preaching such organization’s doctrines or administering its rights and public worship, and who customarily performs one or more of these duties; provided that, no such person is exempt from the payment of an employee license tax on wages and other compensation earned in activities not connected with the regular functions of a religious organization;
(3) Compensation received by precinct workers for election training or work at election booths in state, county and local primary, regular or special elections; and
(4) Compensation received by an employee who works both within and without the city if the employee is physically located within the city while on the job for 5% or less of the time the employee is on the job in any calendar year.
(1984 Code, § 110.04) (Ord. O-77-82, passed 11-30-1982; Ord. O-78-82, passed 11-30-1982; Ord. O-47-01, passed 11-13-2001; Ord. O-65-04, passed 12-7-2004; Ord. O-18-19, passed 6-24-2019) Penalty, see § 110.99