(A) The license fee provided for in this chapter is imposed on both residents and nonresidents of the city at the rate of 0.65% of all salaries, wages, commissions, and other compensations earned for work done or services performed or rendered in the city.
(B) The following are subject to the license fee:
(1) Salaries, bonuses, or incentive payments received by an individual, whether directly or through an agent and whether in cash or in property, for services rendered:
(a) As an officer, agent, or employee, or both of a corporation, including a corporation of the first or nonprofit class, joint stock association, or joint stock company;
(b) As an officer, agent, or employee, as distinguished from a partner or member, of a partnership, limited partnership, or any other form of unincorporated enterprise owned by one or more persons;
(c) As an agent employee, as distinguished from the proprietor, or a business, trade, or profession, conducted or an individual owner;
(d) As an officer, agent, or employee, whether elected or appointed, enlisted, or commissioned, of a governmental administration, agency, arm, authority, board, body, branch, bureau, department, division, section, or unit of the state, or any of the political subdivisions thereof, or those of any other states, except for those excluded in § 110.18(H);
(e) As an officer, agent, or employee, whether elected or appointed, of a government administration, agency, arm, authority, board, body, branch, bureau, department, division, section, or unit of the United States Government or of a corporation created and owned or controlled by the United States Government or any of its agencies, or those of any foreign country or dependency except those enlisted or commissioned in the military service, except for those excluded in § 110.18(H); and
(f) As an officer, agent, or employee of any other entity.
(2) Wages, bonuses, or incentive payments received by an individual, whether directly or through an agent, and whether in cash or in property for services rendered:
(a) Whether based upon hourly, daily, weekly, semi-monthly, monthly, annual, unit of production of piece-work rates; or
(b) Whether paid by an individual, copartnership, association, corporation, including a corporation of the first or nonprofit class, a governmental, administration, agency, arm, authority, board, body, branch, bureau, department, division, section, or unit, or other entity.
(3) Commissions received by a taxpayer, whether directly or through an agent and whether in cash or in property, for services rendered regardless of how computed or by whom paid. If amounts received as a drawing account exceed the commissions earned, the tax is payable on the amounts received. If such commissions are included in the net earnings of a trade, business, or profession regularly carried on by such individual and therefore subject to licensee fee, they shall not again be separately taxed;
(4) Fees, unless such fees are properly included as part of the net profits of a trade, business, profession, or enterprise regularly carried on by the individual and such net profits are subject to tax. Fees paid to a director or officer of a corporation are subject to withholding as in the case of any other employee; and
(5) Other compensation which will be treated as subject to the license fee include:
(a) Tips received by waiters and others. Tips received are subject to the license fee and will be reported in the same manner as earnings of an independent contractor;
(b) Vacation and/or holiday benefits. Payments made to employees by an employer as vacation wages are subject; and
(c) Separation payments. Payments made to employees by an employer at the time of a voluntary or involuntary separation (dismissal) of the employee from the service of the employer, are to be regarded as subject to the license fee.
(C) The following money receipts are not deemed to be salaries, wages, commissions, and other compensations and the net profits within the meaning of this chapter:
(1) Old age or retirement payments. Periodic payments, commonly recognized as old-age or retirement pensions, made to persons retired from service after reaching a specified age or after a stated period of employment, or payments from 401-k retirement plans, IRAs, or other qualified retirement plans.
(2) Disability, sickness, accident benefits, and unemployment compensation. Payments made to employees by an employer under a disability, sickness, and accident plan or unemployment compensation payments by the state, or any other agency, or payments made to individuals as a result of disability, sickness, injury, accident, or unemployment by insurance companies or any other entity or individual.
(3) Death benefits. Death benefits payable by an employer to the beneficiary of an employee or to the employee’s estate, whether payable in a single sum or otherwise.
(4) Benefits arising under the Worker’s Compensation Act. Amounts received by employees under the Worker’s Compensation Act, being KRS Ch. 342 as compensation for a disability sustained during the course of employment, together with any amount of damages received by suit or agreement on account of such disability.
(D) In the case of individuals whose compensation is earned for services performed both within and without the city and who receive subject payments as set forth in the foregoing rules and regulations of this section, they are subject to the license fee in the same proportion that services performed within the city bear to their total employment time.
(Prior Code, § 110.30) (Ord. 220.23C, passed 6-11-2020)