CHAPTER 48
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CHAPTER 48
( HB 492 )
AN ACT relating to local fiscal administration.
Be it enacted by the General Assembly of the Commonwealth of Kentucky:
SECTION 1. A NEW SECTION OF KRS CHAPTER 65 IS CREATED TO READ AS FOLLOWS:
(1) "Qualified local government" means a city, county, charter county government, urban-county government,
unified local government, or consolidated local government that meets the requirements for access to
federal tax information as described in 26 U.S.C. sec. 6103.
(2) Each employee of a qualified local government, including contract staff, who has access to or use of federal
tax information directly sourced from the Internal Revenue Service under 26 U.S.C. sec. 6103 shall submit
to a criminal background investigation by means of a fingerprint check by the Department of Kentucky
State Police and the Federal Bureau of Investigation.
(3) Any fee charged by the Department of Kentucky State Police shall be an amount no greater than the actual
cost of processing the request and conducting the background check.
(4) The Department of Kentucky State Police shall promulgate administrative regulations in accordance with
KRS Chapter 13A to implement this section.
Section 2. KRS 68.197 is amended to read as follows:
(1) The fiscal court of each county having a population of thirty thousand (30,000) or more may by ordinance
impose license fees on franchises, provide for licensing any business, trade, occupation, or profession, and the
using, holding, or exhibiting of any animal, article, or other thing.
(2) License fees on business, trade, occupation, or profession for revenue purposes, except those of the common
schools, may be imposed at a percentage rate not to exceed one percent (1%) of:
(a) Salaries, wages, commissions, and other compensation earned by persons within the county for work
done and services performed or rendered in the county;
(b) The net profits of self-employed individuals, partnerships, professional associations, or joint ventures
resulting from trades, professions, occupations, businesses, or activities conducted in the county; and
(c) The net profits of corporations resulting from trades, professions, occupations, businesses, or activities
conducted in the county.
(3) In order to reduce administrative costs and minimize paperwork for employers, employees, and businesses, the
fiscal court may provide:
(a) For an annual fixed amount license fee which a person may elect to pay in lieu of reporting and paying
the percentage rate as provided in this subsection on salaries, wages, commissions, and other
compensation earned within the county for work done and services performed or rendered in the
county; and
(b) For an annual fixed amount license fee which an individual, partnership, professional association, joint
venture, or corporation may elect to pay in lieu of reporting and paying the percentage rate as provided
in this subsection on net profits of businesses, trades, professions, or occupations from activities
conducted in the county.
(4) (a) Licenses imposed for regulatory purposes are not subject to limitations as to form and amount.
(b) No public service company that pays an ad valorem tax is required to pay a license tax.
(c) 1. It is the intent of the General Assembly to continue the exemption from local license fees and
occupational taxes that existed on January 1, 2006, for providers of multichannel video
programming services or communications services as defined in KRS 136.602 that were taxed
under KRS 136.120 prior to the effective date of this section.
2. To further this intent, no company providing multichannel video programming services or
communications services as defined in KRS 136.602 shall be required to pay a license tax. If ACTS OF THE GENERAL ASSEMBLY 2
only a portion of an entity's business is providing multichannel video programming services
including products or services that are related to and provided in support of the multichannel
video programming services or communications services, this exclusion applies only to that
portion of the business that provides multichannel video programming services or
communications services, including products or services that are related to and provided in
support of the multichannel video programming services or communications services.
(d) No license tax shall be imposed upon or collected from any insurance company except as provided in
KRS 91A.080, bank, trust company, combined bank and trust company, combined trust, banking, and
title business in this state, or any savings and loan association whether state or federally chartered, or in
other cases where the county is prohibited by law from imposing a license fee.
(5) No license fee shall be imposed or collected on:
(a) Income received by members of the Kentucky National Guard for active duty training, unit training
assemblies, and annual field training;
(b) Income received by precinct workers for election training or work at election booths in state, county,
and local primary, regular, or special elections;
(c) Any profits, earnings, or distributions of an investment fund which would qualify under KRS 154.20-
250 to 154.20-284 to the extent any profits, earnings, or distributions would not be taxable to an
individual investor; or
(d) 1. a. The profits earned; or
b. Income received for work performed;
during a disaster response period by a disaster response business or a disaster response employee.
2. As used in this paragraph, "disaster response business," "disaster response employee," and
"disaster response period" have the same meaning as in KRS 141.010.
(6) Persons who pay a county license fee pursuant to this section and who also pay a license fee to a city contained
in the county may, upon agreement between the county and the city, credit their city license fee against their
county license fee. As used in this subsection, "city contained in the county" shall include a city that is in more
than one (1) county.
(7) The provisions of subsection (6) of this section notwithstanding, effective with license fees imposed under the
provisions of subsection (1) of this section on or after July 15, 1986, persons who pay a county license fee and
a license fee to a city contained in the county shall be allowed to credit their city license fee against their
county license fee. As used in this subsection, "city contained in the county" shall include a city that is in more
than one (1) county.
(8) Notwithstanding subsection (7) of this section, if a city annexes territory pursuant to KRS 81A.415[ on or
after June 29, 2021], and both the city and the county in which the territory annexed is contained levy a license
fee at the time of annexation:
(a) The county license fee shall no longer apply in the area annexed by the city if the city license fee is
equal to or greater than the license fee rate imposed by the county at the time of the annexation;
(b) If the city license fee is less than the license fee imposed by the county at the time of the annexation,
only the portion of the county license fee that exceeds the city license fee rate shall remain in effect
in the annexed area;
(c) The city shall annually pay an amount to the county that guarantees that the county shall receive at
least the same dollar amount of revenue that was generated by the county license fee in the territory
in the tax year immediately preceding the annexation; and
(d) After the tax year in which the annexation occurs, if the revenues generated by the city license fee for
the territory decrease below the amount of revenue generated by the county license fee at the time of
the annexation, then the revenue received by the county from the city shall be reduced
proportionately[, then the county shall at least receive the same dollar amount of revenue that was
generated in the preceding tax year by the county license fee. After the tax year in which the annexation
occurs, if the revenues generated by both the city and county license fees for that territory decrease
below the amount of revenue generated in that preceding tax year by the county license fee, then the
revenue received by the county shall be reduced proportionately. Any increase in the license fee rate by CHAPTER 48
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the city or the county after the date of the annexation shall be subject to the crediting provisions
contained in subsections (6) and (7) of this section].
(9) A county that enacted an occupational license fee under the authority of KRS 67.083 shall not be required to
reduce its occupational tax rate when it is determined that the population of the county exceeds thirty thousand
(30,000).
(10) Notwithstanding any statute to the contrary:
(a) In those counties where a license fee has been authorized by a public question approved by the voters,
there shall be no credit of a city license fee against a county license fee except by agreement between
the county and the city in accordance with subsection (6) of this section;
(b) Notwithstanding any provision of the KRS to the contrary, no taxpayer shall be refunded or credited for
any overpayment of a license tax paid to any county to the extent the overpayment is attributable to or
derives from this section as it existed at any time subsequent to July 15, 1986, and the taxpayer seeks a
credit for a license tax paid to a city located within such county, if such refund claim or amended tax
return claim was filed or perfected after November 18, 2004, except by agreement between the city and
county in accordance with subsection (6) of this section;
(c) In those counties where a license fee has been authorized by a public question approved by the voters,
the percentage rate of the license fee in effect on or after January 1, 2005, and any maximum salary
limit upon which the license fee is calculated may be increased or decreased in subsequent fiscal years
with the approval of the fiscal court through the passage of an ordinance. The percentage rate of a
license fee in such counties shall at no time exceed one percent (1%) and the maximum salary limit
shall at no time exceed an amount equal to the maximum Social Security contribution and benefit base
established under subsection (b) of 42 U.S.C. sec. 430. Notwithstanding subsection (7) of this section,
there shall be no credit of any license fee increased or decreased under this paragraph except by
agreement between the county and the city in accordance with subsection (6) of this section.
(d) This subsection shall have retroactive application; and
(e) If any provision of this subsection or the application thereof to any person or circumstance is held
invalid, the invalidity shall not affect other provisions or application of this section that can be given
effect without the invalid provision or application, and to this end the provisions of this subsection are
severable.
(11) Pursuant to this section, no fiscal court shall regulate any aspect of the manner in which any duly ordained,
commissioned, or denominationally licensed minister of religion may perform his or her duties and activities
as a minister of religion. Duly ordained, commissioned, or denominationally licensed ministers of religion
shall be subject to the same license fees imposed on others in the county on salaries, wages, commissions, and
other compensation earned for work done and services performed or rendered.
Signed by Governor April 4, 2024.