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

Chapter 27 is Nicholasville's occupational license tax, adopted by Ord. No. 709-2008 on 7-7-08. Section 27-3(a) requires every person or business entity engaged in any business for profit, and anyone required to file with the Internal Revenue Service or the Kentucky Revenue Cabinet, to file and pay the tax for the privilege of engaging in those activities within the city. The tax has two measures. Employees pay one and one-half percent of all wages and compensation paid or payable for work done or services performed in the city, whether the employee is a resident or nonresident. Business entities pay one percent of the net profits from business conducted in the city, whether the entity is a resident or nonresident, for tax years beginning on or after January 1, 2009.

Section 27-3(b) lists who falls outside the tax. The exclusions are banks and trust companies and savings and loan associations; compensation received by Kentucky National Guard members for active duty training, unit training assemblies and annual field training; compensation paid to precinct workers for election training or work at election booths; public service corporations that pay an ad valorem tax on property assessed by the Kentucky Department of Revenue; insurance companies doing business in Kentucky; qualifying investment funds; and companies providing multi-channel video programming or communications services. Holders of a KRS Chapter 243 license for manufacturing or trafficking in alcoholic beverages must still file a return but can exclude the gross receipts from that activity, and their employees are not exempt.

Section 27-1 defines a taxable business as any enterprise conducted for gain or profit and excludes trade boards, chambers of commerce, trade associations, unions, and religious, charitable, scientific, literary, educational, civic or fraternal organizations where no earnings inure to a private shareholder. Section 27-2 requires a separate questionnaire for each separate business before it commences. Section 27-4 apportions net profits for entities active in more than one tax district using a payroll factor and a sales factor. Separately, § 21-17 requires a license, with its tax paid, to sell or offer for sale alcoholic beverages, and § 21-19 sets those licenses to run from July 1 to June 30.