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§ 110.02 OCCUPATIONAL LICENSE APPLICATION REQUIRED.
   (A)   Every person or business entity engaged in any trader, occupation or profession, or other activity for profit or anyone required to file a return under this chapter in the city shall be required to complete and execute the application prescribed by the Occupational Tax Office. Each person shall be required to complete a separate application for each separate business before the commencement of business or in the event of a status change, other than change of address. Licensees are required to notify the Occupational Tax Office of changes of address, or the cessation of business activity, and of other changes which render inaccurate the information supplied in the completed application.
   (B)   (1)   Effective 1-1-2020, all mobile food vendors are required to pay on a calendar year basis, an annual business license fee of $250. The mobile food vendor will not be required to file a monthly restaurant tax return as required by Ord. 22-2007. All licenses expire December 31 each year. Mobile food vendors are exempt from filing a return as required by § 110.06 of this chapter.
      (2)   This license fee does not apply to any restaurant business that has a permanent physical location inside the city limits and also operates a mobile food unit. Any such business shall be required to file monthly restaurant tax returns, obtain an annual business license, remit any occupational withholdings due, and file an annual net profits license fee return as required by this chapter and Ord. 22-2007.
(Prior Code, § 110.02) (Ord. 09-2006, passed 5-8-2006; Ord. 25-2019, passed 11-4-2019)
§ 110.03 OCCUPATIONAL LICENSE TAX PAYMENT REQUIRED.
   (A)   Except as provided in divisions (B) and (E) below, 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 tax for the privilege of engaging in such activities with the city. The occupational license tax shall be measured by 1.95% of:
      (1)   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; and
      (2)   The net profit from business conducted in the city by a resident or non-resident business entity.
   (B)   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.
   (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 required to make, a federal income tax return, the occupational license tax shall be computed for the purposes of this chapter on the bases 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.
   (E)   The occupational license tax imposed in this section shall not apply to the following persons or business entities:
      (1)   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 pursuant to the provisions of KRS 92.300;
      (2)   Any compensation received by members of the Kentucky National Guard for active duty training, unit training assemblies and annual field training pursuant to the provisions of KRS 92.300;
      (3)   Any compensation received by precinct workers for election training or work at election booths in state, city or local primary, regular or special elections pursuant to the provisions of KRS 92.300;
      (4)   Public service corporations that pay an ad valorem tax on property valued and assessed by the commonwealth’s Department of Revenue pursuant to the provisions of KRS 136.120. Licensees whose businesses are predominately 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;
      (5)   Persons or business entities that have been issued a license under KRS Ch. 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;
      (6)   Insurance companies incorporated under the laws of and doing business in the Commonwealth of Kentucky except as provided in KRS 91A.080;
      (7)   Any profits, earnings, distributions of an investment fund which would qualify under KRS 154.20-250 to 154.20-284 to the extent any profit, earnings or distributions would not be taxable to an individual investor;
      (8)   All rental income of any type or source is fully taxable for all forms of ownership, except for an individual or single-member LLC who owns four or less residential rental housing units; they are exempt from the requirements of this chapter. A housing unit is defined as a single living quarters (duplex = two, apartment unit = one). With ownership of five or more residential rental units inside the city limits, an individual or single-member LLC is presumed to be operating a business and is subject to this chapter and all net profits are fully taxable.
      (9)   The sale of agricultural products by the owner of locally homegrown agriculture products. This does not include the resale of produce from a distributor;
      (10)   Private domestic labor is excepted, net included are commercially marketed services provided for the home;
      (11)   Vendors who only participate in festivals or fairs sponsored by non-profit organizations where said events do not exceed three days may be exempt; and
      (12)   Any mobile food vendor that only participates in city sponsored events or festivals shall be exempted from obtaining a city occupational license, however, they shall be required to pay the applicable vendor set-up fee associated with each city event or festival.
(Prior Code, § 110.03) (Ord. 09-2006, passed 5-8-2006; Ord. 10-2012, passed 8-20-2012; Ord. 25- 2019, passed 11-4-2019; Ord. 13-2023, passed 6-26-2023)
§ 110.04 APPORTIONMENT.
   (A)   Except as provided in division (D) below, net profit shall be apportioned as follows:
      (1)   For business entities with both payroll and sales revenues in more than one tax district, by multiplying the net profit 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 is two;
      (2)   For business entities with sales revenue in more than one tax district, by multiplying the net profit by the sales factor as set forth in division (C) below; and
      (3)   For the purposes of divisions (A) through (D) below, the business entity shall file an apportionment form provided by the Occupational Tax Office.
   (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 sales, 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 revenue 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; and
      (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 net profits.
   (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 tax shall be measured by that part of the compensation paid or payable as a result of work done or service performed or rendered with the city. The license tax 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 the taxpayer’s reported percentage under this section, the taxpayer shall maintain adequate records.
(Prior Code, § 110.04) (Ord. 09-2006, passed 5-8-2006)
§ 110.05 EMPLOYERS TO WITHHOLD.
   (A)   Every employer making payment of compensation to an employee shall deduct and withhold upon the payment of the compensation any tax imposed against the compensation by the city. Amounts withheld shall be paid to the city in accordance with § 110.03 of this chapter.
   (B)   Every employer required to deduct and withhold tax 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 to the city and pay to the city, the tax 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.
   (C)   Every employer who fails to withhold or pay to the city any sums required by this ordinance 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.
   (D)   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.
   (E)   Every employer required to deduct and withhold tax 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 tax 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.
   (F)   Every employer shall furnish each employee a statement on or before January 31 of each year showing the amount of compensation and occupational license tax deducted by the employer from the compensation paid to the employee for payment to the city during the preceding calendar year.
   (G)   An employer shall be liable for the payment of the tax required to be deducted and withheld under this section.
   (H)   The president, vice president, secretary, treasurer or any other person holding an equivalent corporate office of any business entity subject to this chapter shall be personally and individually liable, both jointly and severally, for any tax required to be withheld from compensation paid to one or more employees of any 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 of any person; provided that, the personal and individual liability shall apply to each or every person holding the corporate office at the time the tax becomes or became obligated. No person shall be personally and individually liable under this division (H) who had no authority to collect, truthfully account for or pay over any tax imposed by this chapter at the time that the taxes imposed by this chapter become or became due.
   (I)   Every employee receiving compensation in the city subject to the tax imposed under § 110.03 of this chapter shall be personally liable for the tax notwithstanding the provision of divisions (G) and (H) above. In all cases where the employer does not withhold the tax 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. If an employer fails to or is not required to withhold, report or pay the license fee, it shall become the duty of the employee to file with the city. The only employer that is not required to withhold, report and pay the occupational license tax is the Federal Government, including the United States Postal Service. The payment required to be made by an employee, can be made quarterly, for the periods ending March 31, June 30, September 30 and December 31 of each year, or at any time the employee wishes to make an estimated payment for the year in which wages are earned. All license fees must be received by February 28 for the preceding calendar year, together with a copy of the employee’s W-2 form. Employers not required to withhold, report, or pay the license fee must annually during the month of January of each year, make a return to the Occupational Tax Administrator, in which is set forth the name and Social Security number of each employee of the employer during the preceding calendar year, giving the amount of salaries, wages, commissions or other compensation earned during such preceding year by each such employee. This list shall include all current full-time employees, part-time employees, temporary employees and terminated employees whether it be voluntary or involuntary.
(Prior Code, § 110.05) (Ord. 09-2006, passed 5-8-2006)
§ 110.06 RETURNS REQUIRED.
   (A)   All business entity returns for the preceding taxable year shall be made by April 15 of each year, 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. Blank forms for returns shall be supplied by the city.
   (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 tax return with the city. Whenever, in the opinion of the city, it is necessary to examine the federal income tax return of any business entity in order 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 of adjustments made by the Federal Government.
   (C)   Every business entity subject to a occupational license tax governed by the provisions of this chapter shall keep records, render under oath statements, make returns and comply with rules 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 tax liability 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 in the premises.
   (E)   The full amount of the unpaid tax payable by any business entity, as appears from the face of the return, shall be paid to the city at the time prescribed for filing the occupational license tax return, determined without regard to any extension of time for filing the return.
(Prior Code, § 110.06) (Ord. 09-2006, passed 5-8-2006)
§ 110.07 EXTENSIONS.
   (A)   The city may grant any business entity an extension of not more than six months, unless a longer extension has been granted by the Internal Revenue Service or is agreed to by the city and the business entity, for filing its return, if the business entity, on or before the date prescribed for payment of the occupational license tax, requests the extension and pays the amount properly estimated as its tax.
   (B)   If the time for filing a return is extended, the business entity shall pay, as part of the tax, an amount equal to 12% per annum simple interest on the tax shown due on the return, but not been previously paid, from the time the tax was due until the return is actually filed and the tax paid to the city. A fraction of a month is counted as an entire month.
(Prior Code, § 110.07) (Ord. 09-2006, passed 5-8-2006)
§ 110.08 REFUNDS.
   (A)   Where there has been an overpayment of tax under § 110.05 of this chapter, a refund or credit shall be made to the employer only to the extent that the amount of the overpayment was not deducted and withheld under § 110.05 of this chapter by the employer.
   (B)   Unless written application for refund or credit is received by the city from the employer within two years from the date the overpayment was made, no refund or credit shall be allowed.
   (C)   (1)   An employee who has compensation attributable to activities performed outside the city, based on time spent outside the city, whose employer has withheld and remitted to the city, the occupational license tax 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.
      (2)   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.
(Prior Code, § 110.08) (Ord. 09-2006, passed 5-8-2006)
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