Thursday December 29, 2005
All non-employee individuals and business entities who work in Louisville Metro are required to register for an occupational license and file an annual occupational license return. These include casual laborers, contract workers, commission salespersons, proprietors, partnerships, corporations, fiduciaries engaged in business activities, and homeowners’ associations.
Also included are individuals and fiduciaries who receive income from rentals of real properties located in Louisville Metro. Individuals and fiduciaries who receive less than $50,000 of gross receipts from these rentals annually, and provide no services for the convenience of their occupants, are deemed not engaged in a business activity under our Regulations, and therefore are not required to register or file a return.
Non-employee individuals and business entities engaged in interstate commerce are not exempt from this registration and filing requirement. Court decisions have established that they are subject to the occupational license tax based on their apportioned net profit when there is sufficient nexus.
The following connections normally establish sufficient nexus: (1) location of a place of business in Louisville Metro at any time during the calendar year or a fiscal year; (2) frequent and continuing entry into Louisville Metro other than through the mails or by common carrier; (3) delivery of goods to residents of Louisville Metro other than through the mails of by common carrier; transportation of passengers if the fees for this service are received within Metro Louisville; (4) contracting to sell goods in Louisville Metro; or (5) conducting substantial business activity in Louisville leading to a contract to buy or sell goods.
Nexus is deemed not established in these de minimus circumstances: (1) any non-employee individual or business entity who engages an employee or employees within Metro Louisville less than 100 hours; (2) any non-employee individual or business entity who picked up goods or passengers from any location in Louisville Metro, or delivered goods or passengers to any location in Louisville Metro less that 50 times during the calendar year or a fiscal year; and (3) any non-employee individual and non-resident of Louisville Metro whose only nexus is the performance of a personal service within Louisville Metro for 3 or fewer days during the calendar year or a fiscal year, and whose receipts for this personal service are less than $3,000.
Certain entities regulated by the state of Kentucky are exempt from the occupational license tax. They include banks, trust companies, savings banks, domestic insurance companies, and public service companies. Insurance companies other than domestic insurance companies, which pay the license tax on insurance premiums, are also exempt to the extent of business activity subject to that license tax.
Certain other entities are deemed not engaged in business activity under our Regulations, and therefore not required to register or file a return. These include boards of trade, chambers of commerce, trade associations or unions, community chest funds or foundations, corporations or organizations operated exclusively for religious charitable, scientific, literary, educational, or civic purposes, or for the prevention of cruelty to animals, or clubs or fraternal organizations operated exclusively for social, literary, educational or fraternal purposes where no part of the earnings, income, or receipts of such units, groups, or associations inures to the benefit of any private shareholder or individual.
For employees, the occupational license taxes are withheld from their pay and remitted by their employers. Employees are not required to register or file a return; unless their employer has not withheld the correct amount.
If you are required to register with this agency, please click here to complete the online registration process, or print the registration application from this web site and submit it by fax or mail.