McCracken County, KY Local Taxes & Fees: Business Tax Classification (2026)

The McCracken County Fiscal Court imposes a 1% occupational license tax under County Code § 35.37 on every person or business entity engaged in business for profit in unincorporated McCracken County. The tax is measured by 1% of all wages and compensation paid for work performed in the county and 1% of net profit from business conducted here by resident or nonresident entities. Partnerships, S corporations, and other pass-through entities are taxed on income before it passes through to owners under § 35.37(B). Section 35.37(E) exempts specific entity classifications: banks, trust companies, and savings and loan associations; National Guard training pay; election-precinct worker compensation; public service corporations already paying state ad valorem tax; businesses licensed under KRS Chapter 243 for alcoholic beverage manufacturing or trafficking, though they must still file returns; Kentucky-domiciled insurance companies except as provided in KRS 91A.080; and qualifying investment fund distributions.

Employees earning under $2,500 in the county and businesses with net profits under $2,500 in the taxable year are also exempt, though withheld amounts can be refunded by filing a return. Businesses located within Paducah city limits that pay Paducah's occupational license fee receive a dollar-for-dollar credit against the county tax under § 35.37(F), but the credit does not reach delinquent prior-year returns. The tax office requires every business to complete a license questionnaire under § 35.36 before starting operations, and McCracken County Code Enforcement Officers are authorized under § 35.46(B) to investigate violations and issue criminal complaints.