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(A) Except as provided in divisions (B) and (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 or the Kentucky Revenue Cabinet shall be required to file and pay to the county an occupational license tax for the privilege of engaging in such activities within the county. The occupational license tax shall be measured by 1% of:
(1) All wages and compensation paid or payable in the county for work done or services performed or rendered in the county by every resident and nonresident who is an employee; and
(2) The net profit from business conducted in the county by a resident or nonresident business entity is imposed an annual license fee being the greater of $40 or 1% of the net profits of the occupation, trade, professional or other business activity conducted in or derived from activity within the unincorporated area of the county.
(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) Every person listed as a contractor or subcontractor on an application for a building permit shall have a business license. No building permit shall be issued until all contractors or subcontractors have a business license.
(D) No business license for businesses physically located in the county shall be issued until the application is approved by the Department of Planning, Zoning and Building Codes Enforcement for compliance with Chapter 155 of this code of ordinances.
(E) If any business entity dissolves, ceases to operate, or withdraws from the county 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 the 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 county.
(F) 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.
(G) 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 commonwealth, any savings and loan association whether state or federally chartered;
(2) Any compensation received by members of the Kentucky National Guard for active duty training, unit training assemblies and annual field training;
(3) Any compensation received by precinct workers for election training or work at election booths in state, county, and local primary, regular, or special elections;
(4) 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. 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 between the city of Frankfort and the county;
(5) 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;
(6) Insurance companies incorporated under the laws of and doing business in the commonwealth 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 profits, earnings, or distributions would not be taxable to an individual investor;
(8) Compensation received by ministers taxable for federal income tax purposes pursuant to the Internal Revenue Code is exempt from the license fee on wages imposed by the county. Compensation received by ministers not taxable for federal income tax purposed pursuant to the Internal Revenue Code is not subject to any license fee imposed by the county. For the purposes of this chapter, a MINISTER is defined as a natural person who is ordained in accordance with the ceremonial ritual or discipline of a recognized church, religious sect, or other religious organization, to teach and preach its doctrine or to administer rites in public worship, and who regularly performs one or more of these duties, provided that no such person is exempt from the payment of an employee license on compensation earned in activities not connected with the regular functions of a religious organization. Thus, compensation earned by ordained persons employed as chaplains, teachers, administrators, musicians, or counselors whose employment is connected with the regular functions of a religious organization is exempt. Compensation earned by persons who are not ordained is not exempt regardless of the religious nature of such individual’s work;
(9) Compensation received by domestic servants is exempt from the license fee on wages imposed by the county. For purposes of this chapter, a DOMESTIC SERVANT is defined as an individual employed to drive his or her employer as a chauffeur or employed on the grounds or in the home of his or her employer, to cook, clean, wash, garden, transport, or otherwise care for or wait upon the employer, the employer’s family and guests or to care for the person, home grounds, and/or vehicles of the employer, the employer’s family and guests, including but not limited to maids, butlers, nurses, nursemaids, gardeners, cooks, launderers, and chauffeurs engaged to service the employer, the employer’s family, and guests, but not including such individuals who are employed by a cleaning service, personal nursing service, chauffeuring service, or other entity which offers the services of its employees to the public;
(10) All state, county, city, and district officers directly named and designated in the text of the constitution to the extent of their salaries, wages, or other compensation received for work or services rendered in the performance of the duties and obligations of their respective offices;
(11) The legally blind shall be exempt from the provisions of the County Fiscal Court occupational license tax, and no license fee shall be due from them to the extent of their net annual salaries, wages or other compensation. LEGALLY BLIND shall mean that the individual claiming exception has:
(a) Central visual acuity of not better then 20/200 in the better eye with corrective lenses, or
(b) Such individual’s visual acuity is accompanied by a limitation in the fields of vision such that the widest diameter of the visual field subtends to an angle no greater than 20 degrees; and
(12) Rental income:
(a) A structure or mobile home located within the corporate limits of the county, which is regularly offered for occupancy, either wholly or in part in return for the payment of rent;
(b) Corporations and associations, as defined herein, which receive income from rental real estate located within the county are presumed to be in the business of renting real estate and therefore subject to the license fee imposed by this section on net profits derived therefrom and the other provisions of this section; and
(c) Individuals and fiduciaries who receive income from real estate located in the county is rebuttably presumed to be in the business of renting real estate and therefore subject to the license fee imposed on net profits derived therefrom and the other provisions of this section if they receive more than $50,000 net profits annually from the rental of real estate located in the county.
(Ord. 14-2007, passed 1-1-2008; Ord. 4-2016, passed 7-1-2016) Penalty, see § 110.99
(A) Except as provided in division (D) of this section, net profit shall be apportioned as follows:
(1) For business entities with both payroll and sales revenue 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) of this section, plus the sales factor, described in division (c), 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 subsection (3) of this section; and
(3) For the purposes of divisions (A) through (D)of this section, 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 county 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 county based on the time the individual’s service is performed within the county.
(C) The sales factor is a fraction, the numerator of which is the total sales revenue of the business entity in the county 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 county 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 county regardless of the Free on Board point (FOB 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 county 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 county based upon a fraction, the numerator of which is the time spent in performing such income-producing activity within the county 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 county the business entity may petition the county or the county 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 county; or
(4) The employment of any other method to effectuate an equitable allocation and apportionment of net profit.
(E) When compensation is paid or payable for work done or services performed or rendered by an employee, both within and without the county, 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 within the county. The license tax shall be computed by obtaining the percentage, which the compensation for work performed or services rendered within the county bears to the total wages and compensation paid or payable. In order for the county to verify the accuracy of a taxpayer’s reported percentages under this subsection, the taxpayer shall maintain adequate records.
(Ord. 14-2007, passed 1-1-2008; Ord. 4-2016, passed 7-1-2016) Penalty, see § 110.99
(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 county. Amounts withheld shall be paid to the county in accordance § 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 and report to the county, and pay to the county, 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 county.
(C) Every employer who fails to withhold or pay to the county any sums required by this chapter to be withheld and paid shall be personally and individually liable to the county or for any sum or sums withheld or required to be withheld in accordance with the provisions of this section.
(D) The county shall have a lien upon all the property of any employer who fails to withhold or pay over to the county sums required to be withheld under this section. If the employer withholds, but fails to pay the amounts withheld to the county, the lien shall commence as of the date the amounts withheld were required to be paid to the county. If the employer fails to withhold, the lien shall commence at the time the liability of the employer is assessed by the county.
(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 county 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 county, 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 county 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 county, 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 county subject to the tax imposed under § 110.03 of this chapter shall be personally liable for the tax notwithstanding the provisions of divisions (G) and (H). 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 county 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 county. 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.
(Ord. 14-2007, passed 1-1-2008; Ord. 4-2016, passed 7-1-2016) Penalty, see § 110.99
(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 county.
(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 county. Whenever, in the opinion of the county, it is necessary to examine the federal income tax return of any business entity in order to audit the return, the county 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 county 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 county from time to time may prescribe. Whenever the county deems it necessary, the county 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 county deems sufficient to determine the tax liability the business entity.
(D) The county may require, for the purpose of ascertaining the correctness of any return or for the purposes 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 county at the time prescribed for filing the occupational license tax return, determined without regard to any extension of time for filing the return.
(F) It shall be the responsibility of persons who make Federal Form 1099 “non-employee compensation” payments to natural persons other than employees for services performed within the county, to maintain records of such payments and to report such payments to the county. Said payments must be reported on by remitting Federal Form 1099 by February 28 of the year following the close of the calendar year in which the non-employee compensation was paid. If a business entity or person is not required to remit Federal Form 1099 to the IRS, including but not limited to payments less than $600, they are still liable to remit the equivalent information to the county. The information required to be reported by said licensee shall include:
(1) Payer’s name, address, social security and/or federal identification number.
(2) Recipient’s name and address;
(3) Recipient’s social security and/or federal identification number;
(4) Amount of non-employee compensation paid in the calendar year; and
(5) Amount of non-employee compensation earned in the county for the calendar year.
(Ord. 14-2007, passed 1-1-2008; Ord. 4-2016, passed 7-1-2016) Penalty, see § 110.99
(A) The county 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 county 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 county. A fraction of a month is counted as an entire month.
(Ord. 14-2007, passed 1-1-2008; Ord. 4-2016, passed 7-1-2016) Penalty, see § 110.99
(B) Unless written application for refund or credit is received by the county from the employer within two years from the date the overpayment was made, no refund or credit shall be allowed.
(C) An employee who has compensation attributable to activities performed outside the county, based on time spent outside the county, whose employer has withheld and remitted to this county, the occupational license tax on the compensation attributable to activities performed outside the county, may file for a refund within two years of the date prescribed by law for the filing of a return. The employee shall provide a schedule and computation sufficient to verify the refund claim and the county may confirm with the employer the percentage of time spent outside the county and the amount of compensation attributable to activities performed outside the county prior to approval of the refund.
(Ord. 14-2007, passed 1-1-2008; Ord. 4-2016, passed 7-1-2016) Penalty, see § 110.99
(A) As soon as practicable after each return is received, the county may examine and audit the return. If the amount of tax computed by the county is greater than the amount returned by the business entity, the additional tax shall be assessed and a notice of assessment mailed to the business entity by the county within five years from the date the return was filed, except as otherwise provided in this division (A).
(1) In the case of a failure to file a return, or of a fraudulent return the additional tax may be assessed at any time.
(2) In the case of a return where a business entity understates net profit, or omits an amount properly includable in net profits, or both, which understatement or omission, or both, is in excess of 25% of the amount of net profit stated in the return, the additional tax may be assessed at any time within six years after the return was filed.
(3) In the case of an assessment of additional tax relating directly to adjustments resulting from a final determination of a federal audit, the additional tax may be assessed before the expiration of the times provided in this division (A), or six months from the date the county receives the final determination of the federal audit from the business entity, whichever is later.
(B) The times provided in division (A) may be extended by agreement between the business entity and the county. For the purposes of this division, a return filed before the last day prescribed by law for filing the return shall be considered as filed on the last day. Any extension granted for filing the return shall also be considered as extending the last day prescribed by law for filing the return.
(C) Every business entity shall submit a copy of the final determination of the federal audit within 30 days of the conclusion of the federal audit.
(D) The county may initiate a civil action for the collection of any additional tax within the times prescribed in division (A) of this section.
(Ord. 14-2007, passed 3-31-2016; Ord. 4-2016, passed 7-1-2016) Penalty, see § 110.99
(A) No suit shall be maintained in any court to restrain or delay the collection or payment of the tax levied by this chapter.
(B) Any tax collected pursuant to the provisions of this chapter may be refunded or credited within two years of the date prescribed by law for the filing of a return or the date the money was paid to the county, whichever is the later, except that:
(1) In any case where the assessment period contained in § 110.09 of this chapter has been extended by an agreement between the business entity and the county, the limitation contained in this subsection shall be extended accordingly; and
(2) If the claim for refund or credit relates directly to adjustments resulting from a federal audit, the business entity shall file a claim for refund or credit within the time provided for in this division (B) or six months from the conclusion of the federal audit, whichever is later.
(C) For the purposes of divisions (B) and (D), a return filed before the last day prescribed by law for filing the return shall be considered as filed on the last day.
(D) The authority to refund or credit overpayments of taxes collected pursuant to this chapter is vested exclusively in the county.
(Ord. 14-2007, passed 1-1-2008; Ord. 4-2016, passed 7-1-2016) Penalty, see § 110.99
(A) No present or former employee of the county shall intentionally and without authorization inspect or divulge any information acquired by him or her of the affairs of any person, or information regarding the tax schedules, returns, or reports required to be filed with the county or other proper officer, or any information produced by a hearing or investigation, insofar as the information may have to do with the affairs of the person’s business. This prohibition does not extend to information required in prosecutions for making false reports or returns for taxation, or any other infraction of the tax laws, or in any way made a matter of public record, nor does it preclude furnishing any taxpayer or the taxpayer’s properly authorized agent with information respecting his or her own return. Further, this prohibition does not preclude any employee of the county from testifying in any court, or from introducing as evidence returns or reports filed with the county in an action for violation of a the county tax laws or in any action challenging the county laws.
(B) The county reserves the right to disclose to the Commissioner of Revenue of the commonwealth or his or her duly authorized agent all such information and rights to inspect any of the books and records of the county if the Commissioner of Revenue of the state grants to the county the reciprocal right to obtain information form the files and records of the State Department of Revenue and maintains the privileged character of the information so furnished. Provided, further, that the county may publish statistics based on such information in such a manner as not to reveal data respecting net profits or compensation of any person or business entity.
(C) In addition, the county is empowered to execute similar reciprocity agreements as described in division (B) of this section with any other taxing entity, should there be a need for exchange of information in order to effect diligent enforcement of this chapter.
(Ord. 14-2007, passed 1-1-2008; Ord. 4-2016, passed 7-1-2016) Penalty, see § 110.99
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