Business Licenses/Occupational Fees
Welcome to the City of Franklin's License Fee Division
Below is a list of fees the City of Franklin License Fee Division collects from all businesses operating within the City limits of Franklin. All forms and returns mentioned below are available on this page under the Download Forms tab. Generally, renewal and tax forms are mailed out at least 30 days before they are due. In the event that you do not receive a renewal or tax form, you are still required to timely file the form with payment
Minimum Business License Fee
The minimum business license fee is $100 each year and applies to all for profit businesses conducting business inside the City limits of Franklin (manufacturing companies see Manufacturing License Fees below). This amount is due on or before January 31st of each year. If you are applying for a new business license after January, the minimum business license is pro-rated in the initial year only.
Annual Gross Receipts License Fee Return
Each company conducting business inside the City limits of Franklin is required to file an Annual Gross Receipts License Fee Return no later than three and a half months after the Company's year-end (manufacturing companies see Manufacturing License Fees below). You must attach a copy of your federal income tax return with the Annual Gross Receipts License Fee Return.
|Up to $1,000,000||Multiplied by .0006|
|$1,000,000 thru $10,000,000||Multiplied by .0001|
|Excess||Multiplied by .00005|
|Deduct Annual Business License Fee of $100|
Occupational License Fee
Each company (for-profit or not-for-profit) that has employees working within the City limits must withhold and remit on a quarterly basis to the City of Franklin an amount equal to 1% of gross payroll paid within the City limits. The Occupational License Fee Return must accompany your payment to the City of Franklin and is due 30 days after each quarter then ended. However, if the monthly City of Franklin withholding is $2,000 or more, you must file your return and remit your payment 15 days after each month then ended.
Payroll and 1099 Filing
On or before February 28 of each year, all businesses with employees working inside the City limits must file all of their W-2's with the City of Franklin for the preceding year. Additionally, if you issued 1099's for rents or contract labor for services rendered inside the City limits, those forms must be filed with the City of Franklin no later than February 28 for the preceding year.
Manufacturing License Fees
If you are a manufacturing company, you are not subject to the Minimum Business License Fee or the Annual Gross Receipts License Fee Return. Instead, you are required to file a Manufacturing License Fee Return and remit quarterly a payment to the City of Franklin based on the average amount of employees you had for the three months of each quarter. The amount due is equal to the average amount of employees for each quarter multiplied by $5.00. Manufacturing License Fee Returns and payments are due 30 days after each quarter then ended.
Insurance Premium Fees
Any business or individual located within the City limits of Franklin is required to pay a 9% Insurance Premium Tax on all insurance policies. This amount is paid to your insurance company and remitted back to the City of Franklin from your insurance company on a quarterly basis.
All businesses and individuals that own real estate or business tangible personal property are required to pay property taxes to the City of Franklin by November 30 each year. The City of Franklin property tax rate is 12.30 cents per $100, and is based on the taxable value of your property according to Simpson County PVA.
Public Service Company Tax
Instead of being issued a property tax bill by November 30 of each year, all utility, railroad, and telecommunications companies are issued a Public Service Company tax bill. This tax is essentially the same as property taxes, but isn't due by November 30 of each year. The dates of the bills vary based on the certification date of the property assessment; however, the bill is due 30 days after it is sent out by the City of Franklin. The calculated bill is based on the assessed value of the property located within the City limits of Franklin and is taxed at a rate of 12.3 cents per $100.
Bank Deposit Taxes
All banks located within the City of Franklin are required to pay bank deposit taxes on their deposits held within the City of Franklin. Bank Deposit Taxes are due December 31 of each year and are based on the deposit amounts certified by the Commonwealth of Kentucky. Each bill is calculated by multiplying the deposits held amount by 2.50 cents per $100.
Alcohol Regulatory License Fees
For all holders of an Alcohol License within the City of Franklin, you are required to file a regulatory License Fee Return and remit payment to the City of Franklin on a quarterly basis. If you sell alcohol by the drink, you are required to pay an amount equal to 8% of your alcohol sales. If you sell packaged alcohol, you are required to pay an amount equal to 5% of your alcohol sales. All forms and payments are due 30 days following the quarter then ended. Additionally, each Alcohol License holder must renew their City of Franklin Alcohol License by March 30 of each year.
Firework Business License
Each company wishing to sell fireworks within the City limits of Franklin must purchase a Fireworks License for a fee of $1,000. Prior to the issueance of the license, the Building Inspector, or his or her designee, shall sign the license indicating that the location of the business is zoned appropriately for the conduct of said business. The person, firm, partnership, business or corporation shall also show valid proof of general liability insurance in an amount of not less than one million dollars ($1,000,000) per occurrence and per accident. Any Fireworks License issued shall expire 60 days from the issuance of said license.
Yard Sale Permit
Every time an individual has a yard sale, he or she must apply for a permit with the City of Franklin. There is no fee for a Yard Sale Permit; however, an individual can only be issued three Yard Sale Permits in one calendar year.
Summary of City Taxes and License Fees
|City Property Taxes (2015)||0.123||Cents Per $100|
|Simpson County Property Taxes (2015)||0.223||Cents Per $100|
|Simpson County School Taxes (2015)||0.506||Cents Per $100|
|City Business License||$ 100.00||Annually|
|Firework Business License||$1,000.00||License expires 60 days from issuance|
|City Occupational Payroll Taxes||1%||Gross Wages; Caps at Social Security Max|
|Simpson County Occupational Taxes||0.75%||Gross Wages; Caps at Social Security Max|
|Gross Receipts||Tiered Calculation:||UP TO $1,000,000 MULTIPLIED BY .0006|
|1,000,001 THRU 10,000,000 MULTIPLIED BY .0001|
|EXCESS MULTIPLIED BY .00005|
|Deduct Annual Business License Fee of $100|
|Manufacturing Fees||Annual||Minimum License Fee Per Year $100|
|Each and every manufacturer shall pay an annual license fee equal to the total number of employees, including salaried employees, multiplied by $20.|
|Quarterly||Calculation Based on $5.00 Per Employee Per Quarter|
|This fee shall be due and payable quarterly, and the number of employees shall be defined as the weekly average of total employment for each quarter for which the license fee is payable.|
|Alcohol Regulatory Fee||8%||Alcohol sales by the drink|
|5%||Packaged alcohol sales|
|Each alcohol license holder must renew their City of Franklin alcohol license by March 30 of each year - license varies based on business need.|
|Bank Deposit Franchise Tax||0.25||Cents per $100 deposits held within the City of Franklin|
|Insurance Premium Fees||9%||Total Premiums paid within the City of Franklin|
If you have any questions, or need additional information, you may contact Daniel Reetzke from 8:00 a.m. to 4:30 p.m. CST Monday through Friday at 270-586-4497 or 270-482-5524.
A friendly reminder from the Business License Department:
- 2016 business license due on or before January 31, 2016. $25.00 late filing fee will apply.
- If a federal extension is granted- a copy must be submitted to the City of Franklin by April 15, 2016 with estimated payment.
- Each business is required to furnish a list of all contract laborers contracted by the business during the 2016 calendar year byJanuary 31, 2016. A copy of 1099 issued is required.
- Please notify the business license department if your business has ceased operations in the city of franklin in order to close your account.
The License Fee Division collects Occupational License Fees from all businesses that operate within the city limits of Franklin. As with most cities in Kentucky, Occupational License Fees are our main source of revenue. This revenue is generated by four sources: 1) Minimum Business License Fees, 2) Business License Reconciliation of Gross Receipts, 3) Occupational Fee on payrolls 4) Manufacturing License Fee 5) Insurance Premium Fee.
- Minimum Business License Fee must be paid by all businesses operating for profit in the city limits of Franklin. New businesses should pay the Minimum License Fee before beginning operations in Franklin. Existing businesses must renew the License on or before January 31 of each year.
- Business License Reconciliation must be filed on or before April 15 of each calendar year, or 105 days after the businesses fiscal year end. Copies of the applicable Federal return must be attached to verify gross receipts.
- Occupational License Fee on payroll is the largest contributor of revenue to the City. This fee is withheld from the employees by the employer and remitted quarterly. The 1% fee applies to the gross wages of individuals working in the city limits of Franklin, regardless of residence.
- Manufacturing License Fee is imposed on all manufacturing companies located within the city of Franklin. Each manufacturer must pay an annual license fee equal to the number of employees, including salaried employees, multiplied by $20. This fee shall be due and payable quarterly, and the number of employees shall be defined as the weekly average of total employment for each quarter. The minimum annual license fee is $100.00. This fee is in addition to the Payroll fee imposed on employees.
- Insurance Premium Fee is imposed on insurance policies issued in Franklin at a rate of 9%. This fee is remitted by the insurance companies and is imposed on the policyholder’s bill.
SPECIAL NOTE TO CONTRACTORS
All subcontractors must have an Occupational License. One cannot work “under” another’s license unless they are considered an employee and the 1% Occupational License Fee is being withheld from the subcontractor’s earnings. Therefore, all subcontractors must also obtain an application and License before doing business within the City Of Franklin. Penalties will be imposed on those contractors in violation of Occupational License Ordinance.
Any questions regarding Occupational License Fees should be directed to the License Fee Division at (270)586-4497. You may also email the License Fee Division via Daniel Reetzke at firstname.lastname@example.org .
Business License Applications
Payroll Withholding Forms
Annual Gross Receipts Forms
Alcoholic Beverage Control Forms
Alcohol By the Drink Forms
Package Alcohol Forms
Manufacturing License Fee Forms
Under the City Code, the City Clerk/Tax Collector has been appointed as the Alcoholic Beverage Control Administrator for the City. By local option election, businesses located within the City limits are allowed to sell distilled spirits and malt beverages by the drink. Hours of sale are governed by the City and vary depending upon the type of license issued. Sunday sales licenses are available to qualifying restaurants. All applicants for alcoholic beverage licenses must complete a comprehensive set of forms for the City, State and Federal licenses. The licensing process normally takes five weeks. Applications are obtained and returned to the ABC Coordinator, 117 W Cedar St. for review and processing.