(a) Except as provided in section 13-6, 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 urban county government an occupational license tax for the privilege of engaging in such activities within the urban county government. The occupational license tax shall be measured by two and one-quarter (2.25) percent of:
(1) All wages and compensation paid or payable in the urban county government for work done or services performed or rendered in the urban county government by every resident and nonresident who is an employee; and
(2) The net profit from business conducted in the urban county government by a resident or nonresident business entity.
(b) Where salaries, wages, commissions and other trade compensations are paid under subsection (a)(1) above for any business, trade, occupation, profession or other activity in the urban county, such license fee shall be computed by obtaining the percentage which the compensation for any business, trade, occupation, profession or other activity in the urban county bears to the total compensation.
(c) The net profits of businesses, trades, occupations, professions and other activities conducted in the urban county under subsection (a)(2) above shall be computed as follows:
(1) Except as provided in subsection (c)(4) of this section, net profit shall be apportioned as follows:
(a) For business entities with both payroll and sales revenue in more than one (1) tax district, by multiplying the net profit by a fraction, the numerator of which is the payroll factor, described in subsection (c)(2) of this section, plus the sales factor, described in subsection (c)(3) of this section, and the denominator of which is two (2); and
(b) For business entities with sales revenue in more than one (1) tax district, by multiplying the net profit by the sales factor as set forth in subsection (c)(3) of this section.
(2) The payroll factor is a fraction, the numerator of which is the total amount paid or payable in the urban county government 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 urban county government based on the time the individual's service is performed within the urban county government.
(3) The sales factor is a fraction, the numerator of which is the total sales revenue of the business entity in the urban county government during the tax period, and the denominator of which is the total sales revenue of the business entity everywhere during the tax period.
(a) The sale, lease, or rental of tangible personal property is in the urban county government if:
1. The property is delivered or shipped to a purchaser, other than the United States government, or to the designee of the purchaser within the urban county government regardless of the f.o.b. point or other conditions of the sale; or
2. The property is shipped from an office, store, warehouse, factory, or other place of storage in the urban county government and the purchaser is the United States government.
(b) Sales revenues, other than revenues from the sale, lease or rental of tangible personal property or the lease or rental of real property, are apportioned to the urban county government based upon a fraction, the numerator of which is the time spent in performing such income-producing activity within the urban county government and the denominator of which is the total time spent performing that income-producing activity.
(c) Sales revenue from the sale, lease, or rental of real property is allocated to the tax district where the property is located.
(4) If the apportionment provisions of this section do not fairly represent the extent of the business entity's activity in the urban county government, the business entity may petition the urban county government or the urban county government may require, in respect to all or any part of the business entity's business activity, if reasonable:
(a) Separate accounting;
(b) The exclusion of any one (1) or more of the factors;
(c) The inclusion of one (1) or more additional factors which will fairly represent the business entity's business activity in the urban county government; or
(d) The employment of any other method to effectuate an equitable allocation and apportionment of net profit.
(5) When compensation is paid or payable for work done or services performed or rendered by an employee, both within and without the urban county government, 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 urban county government. The license tax shall be computed by obtaining the percentage which the compensation for work performed or services rendered within the urban county government bears to the total wages and compensation paid or payable. In order for the urban county government to verify the accuracy of a taxpayer's reported percentages under this subsection, the taxpayer shall maintain adequate records.
(6) All partnerships, S corporations, and all other entities where income is "passed through" to the owners are subject to this ordinance. The occupational license tax imposed in this ordinance is assessed against income before it is "passed through" these entities to the owners.
(7) If any business entity dissolves, ceases to operate, or withdraws from the urban county government 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 urban county government.
(8) 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 ordinance 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.
(9) 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 urban county government.
(10) 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 urban county government. Whenever, in the opinion of the urban county government, it is necessary to examine the federal income tax return of any business entity in order to audit the return, the urban county government 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 urban county government may also require copies of reports of adjustments made by the federal government.
(11) 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 urban county government at the time prescribed for filing the occupational license tax return, determined without regard to any extension of time for filing the return.
(Ord. No. 3583, § 1, 12-27-56; Ord. No. 99-72, § 1, 5-25-72; Ord. No. 164-83, § 2, 9-22-83; Ord. No. 147-90, § 1, 7-5-90; Ord. No. 236-93, § 2, 12-9-93; Ord. No. 182-95, § 1, 8-31-95; Ord. No. 128-2000, § 1, 5-4-00; Ord. No. 336-2000, § 1, 11-9-00; Ord. No. 79-2006, § 1, 4-13-06; Ord. No. 267-2007, § 3, 12-6-07)