Business-Occupational License/Taxes

Any individual, sole proprietor, corporation, partnership or entity that wishes to conduct  business within the City of Madisonville is required to apply for and obtain an occupational license from the City before the start of business or in the event of a change in business status.  A business license is required for all commercial rentals and the leasing or rental of more than three residential rental units per year.  If you have questions about the City's Occupational License, please contact the Finance Department.

Kathy Knox
77 N. Main Street
Madisonville, KY  42431
Phone:  (270) 824-2107
Fax:  (270) 821-0271
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Forms

Exceptions

The occupational license fee imposed does not apply to the following persons or entities:

  • Bank, trust company, combined bank and trust company, combined trust, banking and title insurance company
  • Compensation received by members of the Kentucky National Guard for active duty training, unit training assemblies and annual field training
  • Compensation received by precinct workers for election training or work at election booths
  • Public Service Corporations that pay an ad valorem tax on property valued and assessed by the Kentucky Department of Revenue under the provisions of KRS 136.120
  • The portion of gross receipts from the manufacturing or trafficking in alcoholic beverages by persons or businesses that have been issued a license under KRS Chapter 243
  • Life insurance companies incorporated under the laws of and doing business in the Commonwealth of Kentucky
  • Any profits, earnings, or distributions of an investment fund which would qualify under KRS 154.20-154.20-284
  • The portion of any business providing multichannel video programming services or communication services as defined in KRS 136.602
  • Net income received from the leasing or rental of less than four residential rental units per year

Fee Schedule

The following fee schedule shall apply to each person, association, corporation, or other business engaged in any business activity in the city and is payable in advance:

  • Regular business license:   ($25 per year)
  • Dance halls:   ($100 per year)
  • Entertainment exhibitions:   ($25 per day)
  • Fortune telling:  ($500 per year)
  • Commercial parades :  ($100 per year)
  • Pawnbrokers:   ($100 per year)
  • Auction houses: ($100 per year)

Transient-Itinerant Merchant or Business

A transient-itinerant merchant or business includes any person, partnership, corporation or other entity which passes through the city temporarily for the purpose of conducting business which involves buying, selling or exchanging of goods or services.  It is unlawful to engage in any activity in the city without having first obtained a permit to do so from the Finance Director.  A $100 license fee is required prior to the issuance of a permit and prior to engaging in business in the city.

Filing Requirements

The City's Net Profit License Fee is levied at the annual rate of 1.5% of the net profits of all occupations, trades, professions or other businesses engaged in those activities in the City with a $25 minimum fee.  Specifically included is rental income received from the leasing or rental of real and/or personal property located within the city limits of Madisonville with the following exception:  the license fee shall not apply to net income received from the leasing or rental of less than 4 residential rental units per year.  The Net Profit License Fee Return is to be filed by all businesses having receipts and/or payroll within the city limits of Madisonville and must be based on the net income as reported to the state or federal government.  The Net Profit License Fee Return must be filed before April 15, if licensee is on a calendar year, or 105 days after the end of the fiscal year, sale, liquidation or transfer.

Extension Request

The City may grant any business entity an extension of not more than 6 months, unless a longer extension has been granted by the Internal Revenue Service or is agreed to by the city and the business entity.  The request must be in writing and a copy of the Federal application for extension must be submitted before the due date of the Net Profit License Fee Return.  An estimate of the Net Profit License fee due should be paid with the extension request.  Interest will be calculated at 12% per year based on the original due date of the return until the return is actually filed and the fee is paid to the City.

Estimate Payments

Every business entity, other than a sole proprietorship, is required to make quarterly estimated fee payments on or before the 15th day of the fourth, sixth, ninth, and twelfth month of each taxable year if the fees due for the taxable year exceed $5,000.  The quarterly estimated fee payments required shall be based on the lesser of:

  • 22.5% of the current taxable year fee liability;
  • 25% of the previous full taxable year fee liability; or
  • 25% of the average fee liability for the 3 preceding full taxable years' fee liabilities, if the fee liability for any of the 3 preceding full taxable years exceeded $20,000.

Zoning Requirements

It is very important that any new business operation contact the Zoning Department at 270-824-2108 to ensure that the business complies with the City's zoning regulations for the type of business and the planned location.

Contract Labor

Any individual that performs work as contract labor for another individual, corporation, sole proprietorship, partnership or other business entity within the City of Madisonville is required to apply for and obtain an occupational license.

Forms Packet

In late December of each year, the Finance Department mails out the following forms:

The annual business license expires on March 31st and must be renewed by April 15th in order to avoid paying penalties.

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