Occupational License Tax on Gross Receipts
Pursuant to City Ordinances all persons doing business within the defined city limits of the City of Elkton, Kentucky must apply for an Occupational License prior to doing business in the city.
Application for New License
For a new business that has never worked in the city limits of Elkton before, an Application for New Business License must be submitted with the appropriate fee.
Download: Application for New License (PDF)
Download: Application for New License (PDF)
Annual Occupational License Tax Return
Annually, each business must file an Occupational License Tax Return based on work performed during the preceding year. The license fee is equal to 0.125% (.00125) of gross receipts from sales, services rendered or work done in the city. Please note that this License Fee is based on GROSS receipts, not net profits. Payment of the License Fee, along with the completed renewal form with attached federal tax return forms is due on or before April 15th of each year for businesses operating on a calendar year. If the business entity operates on a fiscal year other than calendar year, then the return is due on or before the 15th day of the fourth month following the close of the business entity’s fiscal year.
Annually, each business must file an Occupational License Tax Return based on work performed during the preceding year. The license fee is equal to 0.125% (.00125) of gross receipts from sales, services rendered or work done in the city. Please note that this License Fee is based on GROSS receipts, not net profits. Payment of the License Fee, along with the completed renewal form with attached federal tax return forms is due on or before April 15th of each year for businesses operating on a calendar year. If the business entity operates on a fiscal year other than calendar year, then the return is due on or before the 15th day of the fourth month following the close of the business entity’s fiscal year.
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Request to Close Business License Account
The Occupational License Tax Return must be filed every year until a Request to Close Business License Account form is filed with the City. This form certifies that all operation of business in the City has ceased. However, closing the account shall in no way relieve the business from any business license fees due to the city currently, or in the future, from being paid. When a business is closed, a Occupational License Tax Return based on gross receipts earned for work done in the year the business closed must be filed with the Request to Close Business License Account.
Occupational License Tax on Payroll
Pursuant to City Ordinances there is also a license fee equal to 2.0% of all gross salaries, wages, commissions and other compensations earned for work done or services performed in the city by every employee, officer or agent of the business.
Employer’s Quarterly Return of Occupational License Fee Withheld
It is the duty of each employer to deduct the license fee from each employee, officer or agent at the time of payment. The license fee withheld shall be submitted with the Employer’s Quarterly Return of Occupational License Fee Withheld on a quarterly basis and is due to the City by the last day of the month following the end of the quarter.
Annual Reconciliation
Annually, each employer must also file an Annual Reconciliation of occupational license tax on payroll and submit a copy of all W-2s issued and totals page form W-3. In lieu of copies of W-2s, a payroll listing that shows each employee’s gross wages and occupational tax withheld may be submitted along with a copy of form W-3. The Annual Reconciliation is due to the city by the last day in February.
Per City Ordinance, all business entities are required to submit to the City of Elkton all 1099’s issued for work done in the City. If the business is physically located in Elkton, please submit all Federal Form 1099’s issued. If the business is not physically located in Elkton, you may submit only the 1099’s for work physically performed in Elkton. Please use the 1099 Form Submittal to submit all 1099s issued.
Download: 1099 Form Submittal (PDF)
Starting a New Business in Kentucky?
The Kentucky Secretary of State has created a “One Stop Shop” website to help with the start up process of a new businesses. Visit their website HERE.
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