(A) Levy and imposition. For the purpose of providing funds for the general operating expenses of the city and the municipal services and functions provided thereby, and subject to the provisions of KRS 67.750 through 67.795, and except as provided in division (D) of this section, an occupational license fee is hereby levied and imposed upon everybody engaged in any franchise, trade, occupation, profession or other businesses in the city, for the privilege of that engagement.
(B) Rate. The occupational license fee that is levied and imposed by this chapter is at the rate of:
(1) Employees. One and one-half percent of all of the gross compensation earned by an employee for labor, work or services provided in the city; and
(2) Those not employees. 0.075% of the taxable gross receipts of everybody, other than employees, who are engaged in any franchise, trade, occupation, profession or other business in the city, with a maximum of $40,000 per calendar year.
(C) Apportionment of gross receipts. Pursuant to the authority of KRS 67.753(4), it is hereby determined that the apportionment provisions of KRS 67.753 do not fairly represent the extent of the engagement in the city of those, other than employees, who are engaged in any franchise, trade, occupation, profession or other business both within and outside of the city; and, accordingly, the following described property factor is hereby added to the payroll factor and the sales factor provided in KRS 67.753 for the apportionment of the gross receipts of those, other than employees, who are engaged in any franchise, trade, occupation, profession or other business both within and outside of the city.
(1) The property factor is a fraction, the numerator of which is the average value of the taxpayers real and tangible personal property owned or rented and used in the city during the computation period, and the denominator of which is the average value of all of the taxpayer’s real and tangible personal property owned or rented and used anywhere during the computation period. In the determination of the property factor:
(a) Property owned by the taxpayer is valued at its original cost. Property rented by the taxpayer is valued at eight times the net annual rental rate which is the annual rental rate paid by the taxpayer less any annual rental rate received by the taxpayer from sub-rentals; and
(b) The average value of property shall be determined by averaging the values at the beginning and ending of the computation period, but the City Administrative Officer may require the averaging of monthly values during the computation period if reasonably required to reflect properly the average value of the taxpayer’s property.
(2) The proportion of the total gross receipts everywhere of those, other than employees, who are engaged in any franchise, trade, occupation, profession or other business both within and outside of the city that are subject to the occupational license fee established by this chapter, shall be determined by multiplying the total gross receipts thereof everywhere by the quotient of the total of the payroll factor and the sales factor described in KRS 67.753(2) and (3), and the property factor described in the previous division (C)(1)(a) above, that the franchise, trade, occupation, profession or other business had in the city during the tax period, divided by the total number of those factors that the franchise, trade, occupation, profession or other business had in the city during the tax period. The total number of those factors that the franchise, trade, occupation, profession or other business had in the city during the tax period will always be either 1, 2 or 3. For example, if the franchise, trade, occupation, profession or other business:
(a) Had only the sales revenue factor in the city, during the tax period, without either the property factor or the payroll factor in the city, the total number of those factors that the franchise, trade, occupation, profession or other business had in the city during the tax period would be 1;
(b) Had both the sales revenue factor and the payroll factor in the city, during the tax period, without the property factor in the city, the total number of those factors that the franchise, trade, occupation, profession or other business had in the city during the tax period would be 2; or
(c) Had the sales revenue factor, and the payroll factor, and the property factor in the city, during the tax period, the total number of those factors that the franchise, trade, occupation, profession or other business had in the city during the tax period would be 3.
(D) Exemptions from taxation. The following franchises, trades, occupations, professions and other businesses are exempted from the occupational license fee levied and imposed in § 110.05(A) and (B) of this chapter:
(1) The employment of domestic servants in private homes;
(2) Organizations that have been determined to be exempt from federal income taxation pursuant to § 501(c)(3) of the Internal Revenue Code of 1954, as amended; and
(3) Owners of their principal and primary residence, who let or lease no more than one separate residential unit in that principal and primary residence.
(E) Penalties and interest.
(1) A business entity subject to tax on gross receipts may be subject to a penalty equal to 5% of the tax due for each calendar month or fraction thereof if the business entity:
(a) Fails to file any return or report on or before the due date prescribed for filing or as extended by the city; or
(b) Fails to pay the tax computed on the return or report on or before the due date prescribed for payment.
(c) The total penalty levied pursuant to this division shall not exceed 25% of the total tax due; however, the penalty shall not be less than $25.
(2) Every employer who fails to file a return or pay the tax for quarterly occupational license fees on or before the due date is subject to a penalty in amount equal to 5% of the tax due for each calendar month or fraction thereof. The total penalty levied pursuant to this division shall not exceed 25% of the total tax due; however, the penalty shall not be less than $25.
(3) In addition to the penalties prescribed in this section, any business entity or employer shall pay, as part of the tax, an amount equal to 12% per annum simple interest on the tax shown due, but not previously paid, from the time the tax was due until the tax is paid to the city. A fraction of a month is counted as an entire month.
(4) Every tax imposed by this chapter, and all increases, interest, and penalties thereon, shall become, from the time the tax is due and payable, a personal debt of the taxpayer to the city.
(5) The city may enforce the collection of the occupational tax due under this chapter and any fees, penalties, and interest as provided in this chapter by civil action in a court of appropriate [text missing].
(1996 Code, § 110.04) (Ord. 2295, passed 12-4-2007; Ord. 2339, passed 5-4-2010; Ord. 2539, passed 4-5-2022)