Occupational License Tax
Occupational and business license fees, which are levied for the purpose of producing general revenue, are essentially taxes as opposed to regulatory license fees. Kentucky courts have consistently held that cities have the power to impose monetary charges on business and occupations for the purpose of producing general revenue. As a result, both state statutes and court decisions have referred to them as taxes.
Occupational license taxes may be imposed as a percentage of gross earnings, gross receipts or net profits on all persons working within or conducting a business within a city. (Sixth class cities may not levy this tax as a percent, only as a flat rate.) A flat annual rate may also be used by cities, often referred to as business license fees. Occupational and business license fees constitute a charge for the privilege of working in or conducting a business within a city.
- FY 2015 occupational license tax rates (Excel)
- KLC Research Report: Today's Kentucky City - A Comprehensive Analysis of City Operations (link)
- KLC Research Report: The Basics of Kentucky Cities (PDF)
- COTC Training Opportunities (link)
- Chapter 15 of the City Officials Legal Handbook (link)
- KRS 92.281 (PDF)