HomeMy WebLinkAbout2025-03-8838ORDINANCE NO. 2025-03-8838
AN ORDINANCE AMENDING CHAPTER 106, ARTICLE III, GROSS RECEIPTS
LICENSE TAX, OF THE CODE OF ORDINANCES OF THE CITY OF PADUCAH TO
ADDRESS MEDICAL CANNABIS LICENSING FOR THE CITY OF PADUCAH
WHEREAS, the Commonwealth of Kentucky has adopted KRS Chapter 218B providing
for the legalization of the use of medical cannabis and the operation of medical cannabis
facilities in the Commonwealth pursuant to the terms and conditions of state law; and
WHEREAS, the Board of Commissioners of the City of Paducah adopted Ordinance No.
2024-08-8821 that established general provisions and zoning requirements for Medical Cannabis
Businesses; and
WHEREAS, the City of Paducah now wishes to address licensing for Medical Cannabis
Businesses under Chapter 106 Gross Receipts License Tax, of the Code of Ordinances of the
City of Paducah, by amending said Chapter.
NOW THEREFORE, BE IT ORDAINED BY THE CITY OF PADUCAH,
KENTUCKY:
SECTION 1. That the City of Paducah, Kentucky hereby amends Chapter 106, Article
III, Gross Receipts License Tax, of the Paducah Code of Ordinances as follows:
Sec. 106-61. Definitions.
The following words, terms and phrases, when used in this article, shall have the meanings
ascribed to them in this section, except where the context clearly indicates a different meaning:
Agent means and includes a person who provides a service for and on behalf of another
person for a commission under an agreement or arrangement whereby the person receiving the
commission is obligated to pay for such person's own expenses associated with such person's
transaction of business without reimbursement from the other party. Such expenses would
include expenses relating to office rent and maintenance, clerical assistance and support staff,
associates and agents, advertisement, and other expenses which are typically incurred in carrying
on a business. The Finance Director shall be authorized to determine whether a person
constitutes an agent under this article.
Business means and includes the carrying on, transacting or exercise, for gain or economic
benefit, either directly or indirectly, of any business, trade, profession, occupation, vocation,
calling or other type of commercial or mercantile activity of every kind and description, and the
rendering of any type of service associated therewith, which is conducted in the City. The term
"business" shall not include the usual activities of boards of trade, chambers of commerce, trade
associations or unions (or other associations performing the services usually performed by trade
associations or unions), or the United Way; corporations organized and operated exclusively for
religious, charitable, scientific, literary, educational, or civic purposes, or for the prevention of
cruelty to children or animals; or clubs or fraternal organizations operated exclusively for social,
literary, educational or fraternal purposes, where no part of the earnings or income or receipts
from such units, groups, or associations ensures to any private shareholder or individual;
provided, however, that, if any such unit, group, or association shall engage in activities other
than the activities in which such units, groups, or associations usually engage, such other
activities shall be included in the term "business." Activities conducted for gain or profit by any
educational institution, hospital, or any other institution mentioned in this article are included in
the term "business."
Business entity means and includes all individuals, sole proprietorships and associations,
and all legally created entities, including, but not limited to, corporations, limited liability
companies, business development corporations, partnerships, limited partnerships, registered
limited liability partnerships, joint stock companies, receiverships, trusts, professional service
organizations, or any other legal entity or organization through which business is conducted. A
business entity shall also include an agent as that term is defined under this article, and an
independent contractor or other person who is not an employee as that term is defined under
article IV. A business entity shall not include any employee who is required to pay the license
fee on the employee's compensation under article IV.
Business entity location means and includes each physical location of a business entity.
Fiscal year shall have the same meaning as defined in section 7701(a)(24) of the Internal
Revenue Code.
Gross receipts shall be defined in accordance with the following provisions:
(1) The term "gross receipts" means and includes all revenues or receipts of value derived
from the sale, lease, or other disposition of goods, services or property, or the title, use
and possession relating thereto, from any business, of any kind conducted in the City,
in the form of cash, credits, or other value proceeding from or accruing from the sale of
tangible property (real or personal) or the rendering of any services, or both, including
and without any deductions therefrom for interest, rentals, royalties, the cost of
material used, the cost of goods sold, labor costs, taxes, or any other costs, or any other
expenses whatsoever; provided, however, that a deduction from gross receipts shall be
authorized for the following amounts, subject to the condition that such deduction is
made and scheduled on the return and application which reports the gross receipts:
a. The amount of State or Federal excise, sales and use taxes computed on a basis of
the sales prices of commodities sold by a taxpayer.
b. The amount of any refund or credit given on a sale price of property sold and
returned during the period covered by the return. If the total amount received is
refunded or allowed as a credit, the total sales price of the article returned may be
deducted from gross receipts. If a part of the total sales price is refunded or
allowed as a credit, the amount to be deducted from the gross receipts is the
amount refunded or allowed as a credit.
c. The amount of accounts receivable which have been written off during the period
covered by the return, provided that such accounts receivable were reported as
gross receipts under the return.
d. The amount of gross receipts from the sale of alcoholic beverages licensed under
chapter 6 and laws of the state.
(2) The term "gross receipts," when used in connection with, or in respect to, financial
transactions involving the sale of notes, stocks, bonds, or other securities, or the loan,
collection, or advance of money, or the discounting of notes, bills or other evidence of
debt, or the assignment of, or purchase of, municipal, County, or State tax bills, means
the gross interest, gross discount, gross commission, or other gross receipts earned by
means of or resulting from such financial transactions, but the term "gross receipts"
shall not include amounts received as repayment of the principal of debts.
(3) The term "gross receipts," when applied to all principals and agents, includes not only
the amounts actually received by them but also includes all commissions paid by them
or received for them by brokers, commission merchants, attorneys, or agents in such
transactions, as the case may be, and all other expenses and discounts incident thereto.
(4) The term "gross receipts" shall not include the gross receipts from sales made by a
participant in an event relating to a parade or general assembly for which a permit was
issued.
(5) The term "gross receipts" shall not include any gross receipts which are solely
attributable to any activity performed outside of the City which would be defined as an
activity in interstate commerce which would be protected under the Commerce Clause
of the United States Constitution.
(6) The term "gross receipts" as otherwise defined under any classification which is
identified and described under division 2 of this article shall be as defined in
accordance with the specific provisions which are set forth under such classification.
Manufacturing means and includes the process whereby material having no commercial
value for its intended use before processing and which has appreciable commercial value for its
intended use after processing by machinery. The term "manufacturing" shall not include
processing or finishing operations which do not change the general design or form of a product.
The term "manufacturing" shall not include foundries, machine shops or in shops, blacksmiths or
other sheet iron or metal work.
Medicinal Cannabis Business shall mean either a Cultivator Dispensary, Processor
Producer, or Safety Compliance Facility, as defined in Chapter 218B of the Kentucky Revised
Statutes, as may be amended
(1) Cultivator shall have the same meaning as provided in Chapter 218B of the Kentuck
Revised Statutes, as may be amended
(2) Dispensary shall have the same meaning as provided in Chapter 218B of the Kentucky
Revised Statutes, as may be amended.
(3) Processor shall have the same meaning as provided in Chapter 218B of the Kentucky
Revised Statutes, as may be amended.
(4) Producer shall have the same meaning as provided in Chapter 218B of the Kentucky
Revised Statutes, as may be amended.
(5) Safety Compliance Facilitv shall have the same meaning as provided in Chapter 218B of
the Kentucky Revised Statutes, as may be amended
Person means and includes an individual, firm, partnership, joint venture, association,
corporation (domestic and foreign), trust, estate, assignee, receiver, or any other legal entity or
group or combination acting as a unit.
Revenue and receipts of value means and includes any value received from the sale, lease or
other disposition of goods, services or property, or the title, use and possession of same. In
addition to meaning a sale of property for money, the term "revenue and receipts of value" also
includes any transaction, exchange, or barter or disposal or otherwise, for a consideration. The
amount to be reported as receipts from a sale, lease or other disposition in a trade or business is
as follows:
(1) If the sale, lease or other disposition was made for a consideration wholly in cash, the
total cash received constitutes the receipts.
(2) If the sale, lease or other disposition was made for part in cash, the balance to be paid
within a period of time, the amount of cash plus the amount which was to be paid
constitutes the receipts, provided that the subsequent receipt of the deferred payment
does not constitute a receipt under this article.
(3) If the sale or lease or other disposition was made for part in cash and part by note or
other evidence of indebtedness, the amount of cash plus the face value of the note of
indebtedness constitutes the receipt; provided, however, that the subsequent receipt of
payment of such note or evidence of indebtedness does not constitute a receipt within
the meaning of this article.
(4) If a sale, lease or other disposition is made for credit, the amount of such credit
constitutes the receipt; provided, however, that subsequent liquidating of such credit
does not constitute a receipt within the meaning of this article.
(5) If the sale, lease or other disposition is on an installment basis, the total amount of the
installments paid, or to be paid, constitutes the receipts, including any interest or
carrying charges.
(6) If the sale, lease or other disposition is made by exchange of property of any kind, the
fair market value of the property received in exchange constitutes the receipts.
However, where a used article is accepted in part payment of the purchase price of a
new article, such as automobiles, furniture, washing machines, radios, mechanical
refrigerators, and the like, the seller of the new article shall report the sales price of the
new article less any allowance made for the used article. When such used article is
sold, the sales price of the used article shall constitute receipts within the meaning of
this article.
Tax district means and includes a city of the first to fifth class, County, urban -county,
charter county, consolidated local government, school district, special taxing district, or any
other statutorily created entity with the authority to levy net profits, gross receipts, or
occupational license taxes.
Taxable gross receipts means and includes the gross receipts realized by a business entity
from each physical business located and conducted in the City, or if a business entity realizes
gross receipts from a business located both in the City and another tax district, that portion of the
gross receipts which are taxable in accordance with the apportionment made under the
apportionment provisions of section 106-67.
Wholesale means and includes the sale of something for resale or doing a regular business
of selling large quantities of goods, wares or merchandise to industries, institutions or other
businesses for processing in their operations at markups in prices which are comparable to those
of wholesalers selling to retailers.
[.... I
Sec. 106-101. General license tax schedule; minimum annual license tax.
(a) A business entity shall pay an annual license tax for each business entity location according
to the classifications that apply to the business which the business entity conducts in the
City at each business entity location, subject to the minimum annual license tax as defined
in subsection (b) of this section. A description of each classification under this article is set
forth in the following sections. The annual license tax which is to be paid under each
classification shall be computed in accordance with the rate schedule which is referenced in
the classification, unless otherwise specified in the classification. The rate schedules which
are to be utilized in computing the annual license tax under this article are as follows:
(1) The amount of tax payable under Schedule A shall be determined by multiplying the
business entity location's taxable gross receipts up to $3,500,000.00 times 0.00045 and
multiplying all gross receipts in excess of $3,500,000.00 times 0.00005.
(2) The amount of tax payable under Schedule B shall be determined by multiplying the
business entity location's taxable gross receipts up to $3,500,000.00 times 0.00075 and
multiplying all gross receipts in excess of $3,500,000.00 times 0.00005.
(3) The amount of tax payable under Schedule C shall be determined by multiplying the
business entity location's taxable gross receipts up to $3,500,000.00 times 0.0015 and
multiplying all gross receipts in excess of $3,500,000.00 times 0.00005.
(4) The amount of tax payable under Schedule D shall be determined by multiplying the
business entity location's taxable gross receipts up to $3,500,000.00 times 0.003 and
multiplying all gross receipts in excess of $3,500,000.00 times 0.00005.
(5) The amount of tax payable under Schedule E shall be determined by multiplying the
business entity location's taxable gross receipts up to $3,500,000.00 times 0.0045 and
multiplying all gross receipts in excess of $3,500,000.00 times 0.00005.
(6) The amount of tax payable under Schedule F shall be determined by multiplying the
business entity location's taxable gross receipts up to $3,500,000.00 times 0.005 and
multiplying all gross receipts in excess of $3.500.000.00 times 0.00005.
(b) The minimum annual license tax for cash classification shall be $35.00, except as otherwise
provided in the classifications as hereinafter defined. Any minimum annual license tax that
is paid by a business entity for any reporting period shall be allowed as a credit against the
annual license tax which the business entity is required to pay for that reprfing period as
required under this article.
Sec. 106-133. Medicinal Cannabis Businesses
(a) The minimum annual license tax for each Medicinal Cannabis Business shall be $500.
(b) Any business entity engaging in the business of a Medicinal Cannabis Business shall pU an
annual license tax under Schedule F of Section 106-101.
(c) In order to be granted a business license and/or a renewal of said business license the
Medicinal Cannabis Business must provide the Finance Department with a valid license
issued by the appropriate Cabinet of the Commonwealth pursuant to KRS Chapter 218B as
amended and be in good standing with the City of Paducah, including but not limited to
compliant with City Code of Ordinances Chapter 126
SECTION 2. This Ordinance shall be read on two separat days and become effective
upon summary publication pursuant to KRS Chapter 424.
, A
George Bray, Mayor
ATT T:r
AA
indsay Parish, 'ty Clerk
Introduced by the Board of Commissioners, February 11, 2025
Adopted by the Board of Commissioners, March 4, 2025
Recorded by Lindsay Parish, City Clerk, March 4, 2025
Published by The Paducah Sun, March 7, 2025
ORD\106 — Medicinal Cannabis Businesses Gross Receipts