How Occupational License Fees Are Figured in Kentucky
The occupational license fee, or tax, is a percentage of locally earned compensation. The tax varies depending on the community in Kentucky where the income is earned.
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Taxing Authority
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Local occupational license taxes can be imposed by Kentucky cities, counties and school districts.
Tax Basis
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For employees of a company, the occupational license tax is based on locally earned compensation. It might also include tax on the net profit of self-employed people or entities doing business in that Kentucky community.
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Tax Rate
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The occupational license tax in Kentucky ranges from 0.25 percent to 2.50 percent of taxable earnings. A few communities have set a maximum tax that any person is required to pay.
Reporting Requirements
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Each taxing community requires an occupational license tax return. The frequency requirement of the tax return varies by community.
Exemptions
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Communities with population of 30,000 or more cannot collect license fees from an investment fund or an investment partnership if that income would not be taxable to an individual investor.
State Governance
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State laws pertaining to local occupational license taxes are contained in Kentucky Revised Statutes 68.083, 68.180, 68.197-68.199, 91.200, 92.280-92.281, 160.482-160.488 and 160.605.
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References
Resources
- Photo Credit tax forms image by Chad McDermott from Fotolia.com
