Occupational License Forms/Business License

2021 Deadline Extension

At its April 13, 2021, meeting, the City Commission approved extending the 2021 business license filing deadline for calendar year filers from April 15 to May 17, 2021.  This extension mirrors the changes established by the State of Kentucky and the Internal Revenue Service.   Questions – call Paducah Finance Department at 270-444-8513.

Tell Us About Your Business

Business retention is a priority for the City of Paducah. We would love to hear from our local business community as we engage with local business owners.  Please complete the Business Economic Survey.  If you have a question, contact Business Development Specialist Kathryn Byers.

Paducah's Business License Tax Structure

The Business License Tax (also called the Occupational License Tax) is projected to generate approximately $3.8 million for Fiscal Year 2021.  The funds are placed in the General Fund, the City's main operating fund.  The City of Paducah works on a gross receipts system.  However, instead of charging one flat rate, the City places businesses into one of five classifications (see A through E below) with a rate based on profitability.  The structure of the Paducah's Business License Tax is unique and has been called a modified net profits system.

 A  0.00045 
 B  0.00075
 C  0.00150
 D  0.00300
 E  0.00450

The following document outlines the Business License Tax as approved by City ordinance. Business License Ordinance >>

There are two basic systems for calculating business tax:  gross receipts and net profit.  More than 30 cities in Kentucky operate on a gross receipts system.  The City of Paducah is unique with its five rates.  The other cities in Kentucky operate with one rate.  Some of the benefits and advantages of the City of Paducah's system include

• Best of both worlds.  Paducah has the simplicity of the gross receipts structure.  Plus, Paducah has five rates that address the profitability of a business.
• Simple to administer.  The Business Tax form is two pages.  
• Not Easy to Manipulate.  With a net profit system, it is easier for a company to manipulate the "bottom line".  For example, a large company with offices outside of Paducah could apportion their profits to an office in another city.
• Similar structure to payroll tax.  The payroll tax of 2.0% is based on gross receipts.  You are taxed on your income before your deductions.

Click Business License Tax Presentation for a slide presentation from the March 9, 2010 Commission Meeting.  The presentation follows a year-long study of how businesses would be affected if the City of Paducah changed from its current gross receipts collection system to a net profits system. 

The Four Rivers Business Journal contained an article written by attorney Tom Keuler explaining Paducah's tax structure.  Click Paducah's Revised Tax Code to read a copy of the May 2009 article.

Payment Options

In addition to cash and/or check, the City of Paducah accepts credit and debit card payments at City Hall.  This service for in-person and over-the-phone payments provides a convenient way to pay for many of Paducah’s fees and charges collected through the Finance Department and Fire Prevention Division in addition to the Engineering and Planning departments.

Services payable by credit or debit card include business licenses, property tax bills, building permits, fines, and liens.  A 2.95 percent service charge will apply on credit and debit card payments.  Payment types include American Express, Discover, MasterCard, and Visa.  The City does not charge or retain this service charge.  There is a $2.00 minimum per transaction.

Later in 2021, expect new online features including online bill payments, permits, electronic plan submissions, inspection scheduling, citizen self-service portal, and a citizen service request/reporting portal. 

Forms (Business License and Payroll Tax)

If you have a question, contact the Finance Department at 270-444-8513 or send an email to Revenue.