(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 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.
(B) All partnerships, S corporations, and all other entities where income is “passed through” to the owners are subject to this section. The occupational license tax imposed in this subchapter 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 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 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.
(D) 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 subchapter 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.
(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;
(2) Any compensation received by members of the state 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, the 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 State 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 to 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 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 profits, earnings or distributions would not be taxable to an individual investor;
(8) All employees earning compensation within the county whose gross receipts does not exceed $2,500, shall be exempt from the payment of this license fee or tax. If the employers of any such exempt taxpayers have withheld from such taxpayers and paid the taxes or fees to the county, the employees who earn less and $2,500 during the fiscal year shall be required to file returns in order to be entitled to a refund of the fees or taxes paid during such fiscal year; or
(9) All business’s or business entities whose net profits realized from such activity does not exceed $2,500 taxable year (based on the prior taxable year used for reporting state income taxes) shall be exempt from the payment of this license fee or tax.
(F) All businesses or business entities within the territorial boundaries of the City of Paducah, and paying a license fee to the City of Paducah shall be entitled to credit for such fees paid to the City of Paducah against the fees imposed by the county in an amount equal to the amount actually paid by the business or business entity to the City of Paducah during the immediately preceding taxable year for which the business of business entity is presently required to submit a return in the current year. The City of Paducah Occupational License Credit is expressly inapplicable to delinquent returns that pre-date the immediately preceding taxable year.
(Ord. 2007-16, passed - -2007; Ord. 2018-05, passed 8-13-2018)