Business License / Occupational Tax

Business License / Occupational Tax
270-651-5131

The License Fee Division collects Occupational License Fees from all entities or individuals with business activity in the city limits of Glasgow. These license fees include a Net Profit License Fee or a Minimum License Fee and a quarterly license fee/occupational tax on payrolls (local Payroll Tax).

Please note the Occupational Tax will change effective July 1, 2021 to 1.75%.

• Any person or entity engaged in any trade, occupation or profession, or other activity for profit, or anyone required to file a return under this ordinance in the city of Glasgow, unless exempt by the specific terms of ordinance, shall be required to register this business activity with the city of Glasgow. This includes, but is not limited to rental activity (some exclusions apply, see below), real estate agents, construction workers, barbers, beauticians and any other independent contractor. A Registration Form, which can be obtained at this website, must be completed and returned to this office, along with a $50 Registration Fee. Certain businesses such as pawn shops, entertainment/amusement venues, circuses are subject to additional fees and regulations. Contact this office for additional information.

**INDIVIDUALS WITH 5 OR FEWER RESIDENTIAL RENTAL PROPERTIES ARE NOT SUBJECT TO LOCAL OCCUPATIONAL TAX. NOTE THAT THIS EXCLUSION DOES NOT APPLY TO ENTITIES THAT HAVE BEEN SET UP FOR RENTAL ACTIVITY. ALL COMMERCIAL PROPERTY, REGARDLESS OF NUMBER OF UNITS, IS SUBJECT TO LOCAL OCCUPATIONAL TAX.

**PLEASE NOTE THAT A SUBCONTRACTOR CANNOT WORK UNDER THE LICENSE OF ANOTHER BUSINESS LICENSE HOLDER.

**ALSO NOTE THAT BUSINESS LICENSES ARE NOT TRANSFERRABLE. A NEW OWNER OF A BUSINESS CANNOT OPERATE UNDER THE LICENSE OF THE PREVIOUS OWNER.

• The Net Profit License Fee Return is a local tax return prepared by you or your tax professional each year. It is based on your taxable year end (12/31 for most businesses). This return imposes a 1.75% occupational tax on the profits of your business allocable to the City of Glasgow. Effective July 1, 2021 the occupational tax will increase to 1.75%. If you have businesses both inside and outside of Glasgow, a formula is used to figure the profit subject to local occupational tax. A copy of this return can be obtained on this website.
• The Occupational Tax/Local Payroll Tax is a quarterly tax that each employer must withhold from gross wages, salaries, commissions and other compensation (including deferred compensation and employee contributions to Cafeteria Plans under Section 125 of the IRC) paid to employees earned within Glasgow. This local tax applies to the full gross earnings of employees, without any deductions.

**Note: Some professions and careers (e.g., attorney, cosmetologist, barber, psychologist, massage therapist, mortician, daycare, taxi cabs, etc.) require additional State of Kentucky licensing and certification requirements. Please check with the specific Department of the State of Kentucky in which your area of expertise may be handled. The state chapter of your professional association may be able to assist you regarding these additional requirements.

The License Fee Division is also responsible for the collection of the Insurance Premium Tax. Depending on the type of policy, the tax varies from 2 – 5% of the Premium Amount. This tax is remitted by the insurance companies and being collected on a policyholder’s bill.
The License Fee Division is also responsible for collection of the Transient Room Tax. This is a 3% tax imposed on Gross Rental of all motels, bed & breakfasts, cabins, etc. located in Barren County (excluding the city limits of Cave City and Park City). The room tax is due on a monthly basis. These funds are only collected by the City. These are forwarded to the Barren County Tourism Commission for use. Transient Room Tax Return Form.

All questions regarding Occupational License Fees should be directed to the License Fee Division at the numbers below. You may also email your questions to nicholas.hurt@cityofglasgow.gov