This provision is intended to exercise the taxing authority authorized by KRS 92.280(2). Provided, however, exempted herefrom are those entities exempted under KRS 92.281 and other applicable statutes.
(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 city an occupational license tax for the privilege of engaging in such activities within the city. The occupational license tax shall be measured by 0.5% of:
(1) 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;
(2) The net profit from business conducted in the city by a resident or nonresident business entity. The minimum tax for any business shall be $100 per year which is due April 15 of each year regardless of fiscal year end. Provided, any flat fee paid pursuant to this chapter may be pro-rated on a quarterly basis if purchased after March 31.
(3) The maximum annual net profits tax shall be $3,000.
(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) If any business entity dissolves, ceases to operate, or withdraws from the city 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 city.
(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 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.
(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 (provided, this exemption does not extend to the employees of such entities or to the requirement that such employers withhold on employees);
(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, city, 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 to the city;
(5) Persons or business entities that have been issued a license under KRS Ch. 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. The exemption of this section does not relieve such business or person from properly imposed fees or taxes under any other city ordinance (provided, this exemption does not extend to the employees of such entities or to the requirement that such employers withhold on employees);
(6) Insurance companies incorporated under the laws of and doing business in the Commonwealth of Kentucky except as provided in KRS 91A.080 (this exemption does not apply to insurance agents or agencies);
(7) Any profits, earnings, distributions of an investment fund which would quality 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;
(F) Should the amount due under this subchapter be less than $5, then no return shall be required.
(Ord. 2016-002, passed 3-17-2016; Am. Ord. 2016-004, passed 4-21-2016)
Statutory reference:
Similar state law, see KRS 67.763 and 67.765