112.01 Definitions
112.02 Occupational license application required
112.03 Occupational license tax payment required
112.04 Apportionment
112.05 Employers to withhold
112.06 Returns required
112.07 Extensions
112.08 Refunds
112.09 Federal audit provisions
112.10 Administrative provisions
112.11 Information to remain confidential
112.12 Use of occupational license tax
112.99 Penalty
As used in this chapter, the following terms and their derivatives shall have the following meanings unless the context clearly indicates that a different meaning is intended:
“BUSINESS.” Any enterprise, activity, trade, occupation, profession or undertaking of any nature conducted for gain or profit. “BUSINESS” shall not include the usual activities of board of trade, chambers of commerce, trade associations, unions or other associations performing services usually perform by trade associations or unions. “BUSINESS” shall not include funds, foundations, corporations or associations organized and operated exclusively and solely for religious, charitable, scientific, literary, educational, civic or fraternal purposes, where no part of the earnings, incomes or receipts of such unit, group or association inures to the benefit of any private shareholder or other person.
“BUSINESS ENTITY.” Each separate corporation, limited liability company, business development corporation, partnership, limited partnership, registered limited liability partnership, sole proprietorship, association, joint stock company, receivership, trust, professional service organization, or other legal entity through which business is conducted.
“CITY.” The City of Shively, Kentucky.
“COMPENSATION.” Wages, salaries, commissions, or any other form of remuneration paid or payable by an employer for services performed by any employee, which are required to be reported for federal income tax purposes and adjusted as follows:
(1) Include any amounts contributed by an employee to any retirement, profit sharing, or deferred compensation plan, which are deferred for federal income tax purposes under a salary reduction agreement or similar arrangement, including, but not limited to, salary reduction arrangements under Section 401(a), 401(k), 402(e), 403(a), 403(b), 408, 414(h), or 457 of the Internal Revenue Code; and
(2) Include any amounts contributed by any welfare benefit, fringe benefit, or other benefit plan made by salary reduction or other payment method which permits employees to elect to reduce federal taxable compensation under the Internal Revenue Code, including but not limited to, Sections 125 and 132 of the Internal Revenue Code.
“CONCLUSION OF THE FEDERAL AUDIT.” The date that the adjustments made by the Internal Revenue Service to net income as reported on the business entity’s federal income tax return become final and unappealable.
“FINAL DETERMINATION OF THE FEDERAL AUDIT.” The revenue agent’s report or other documents reflecting the final and appealable adjustments made by the Internal Revenue Service.
“FISCAL YEAR.” An accounting period of twelve (12) months ending on the last day of any month other than December.
“EMPLOYEE.” Any person who renders services to another person or any business entity for compensation, including an officer of a corporation and any officer, employee, or elected official of the United States, a state, or political subdivision of a state, or any agency of instrumentality of any one (1) or more of the above. A person classified as an independent contractor under the Internal Revenue Code shall not be considered an “EMPLOYEE.”
“EMPLOYER.” The person for whom an individual performs or performed any service, of whatever nature, as the employee of such person, except that:
(1) If the person for whom the individual performs or performed the services does not have control of the payment of the wages for such services, the term “EMPLOYER” means the person having control of the payments of such wages; and
(2) In the case of a person paying wages on behalf of a nonresident alien individual, foreign partnership, or foreign corporation, not engaged in trade or business within the United States, the term “EMPLOYER” means such person.
“INTERNAL REVENUE CODE.” The Internal Revenue Code in effect on December 31, 2003, exclusive of any amendments made subsequent to that date, other than amendments that extend provisions in effect on December 31, 2003, that would otherwise terminate.
“NET PROFIT.” Gross income as defined in Section 61 of the Internal Revenue Code, minus all deductions from gross income allowed by Chapter 1 of the Internal Revenue Code, and adjusted as follows:
(1) Include any amount claimed as a deduction for state tax or local tax which is computed, in whole or in part, by reference to gross or net income and which is paid or accrued to any state of the United Sates, local taxing authority in a state, the District of Columbia, the Commonwealth of Puerto Rico, any territory or possession of the United States, or any foreign country or political subdivision thereof;
(2) Include any amount claimed as a deduction that directly or indirectly is allocable to income which is either exempt from taxation or otherwise not taxed;
(3) Include any amount claimed as a net operating loss carryback or carryforward allowed under Section 172 of the Internal Revenue Code;
(4) Include any amount of income and expenses passed through separately as required by the Internal Revenue Code to an owner of a business entity that is a pass-through entity for federal tax purposes; and
(5) Exclude any amount of income that is exempt from state taxation by the Kentucky Constitution, or the Constitution and statutory laws of the United States.
“PERSON.” Every natural person, whether a resident or non-resident of the city. Whenever the word “PERSON” is used in a clause prescribing and imposing a penalty in the nature of a fine or imprisonment, the word, as applied to a partnership or other form of unincorporated enterprise, shall mean the partners or members thereof, and as applied to corporations, shall mean the officers and directors thereof.
“RETURN” or “REPORT.” Any properly completed and, if required, signed form, statement, certification, declaration, or any other documents permitted or required to be submitted or filed with the city.
“SALES REVENUE.” Receipts from the sale, lease, or rental of goods, services, or property.
“TAX DISTRICT.” Any city of the first to fifth class with the authority to levy net profits or occupational license taxes.
“TAXABLE NET PROFIT.” In case of business entity having payroll or sales revenue only within the city, means net profit defined in this section.
“TAXABLE NET PROFIT.” In case of a business entity having payroll or sales revenue both within and without the city, means net profit as defined in this section, and as apportioned under § 112.04 of this chapter.
“TAXABLE YEAR.” The calendar year or fiscal year ending during the calendar year, upon the basis of which net profit is computed.
(Ord. 10-2008, passed 11-3-08; Am. Ord. 5-2021, passed 4-5-21)
Every person and business entity engaged in any business in the city shall be required to complete and execute the questionnaire prescribed by the occupational tax office. Each person or business shall become a licensee and shall be required to complete a separate questionnaire 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 any changes in address, the cessation of business activity, and other changes that render inaccurate the information supplied in the completed questionnaire.
(Ord. 10-2008, passed 11-3-08; Am. Ord. 5-2021, passed 4-5-21)
(A) Except as provided in division (B), 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 within the city. The occupational license tax shall be measured by:
(1) Two percent (2%) of 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) Two point twenty-five percent (2.25%) of the net profit from business conducted in the city by a resident or nonresident business entity, or one hundred dollars ($100), whichever is greater, provided however, the aforesaid sum of one hundred dollars ($100) shall be paid as a minimum tax, whether or not the licensee's business experienced a net profit for the year in question.
(B) The occupational license tax imposes in this section shall not apply to the following persons or business entities:
(1) Any bank, trust company, combined bank and trust company, or trust, banking and title insurance company 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 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 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 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 and trafficking of alcoholic beverages.
(6) Life insurance companies incorporated under the laws of and doing business in the Commonwealth of Kentucky.
(Ord. 10-2008, passed 11-3-08; Am. Ord. 5-2021, passed 4-5-21)
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