HomeMy WebLinkAbout2025-09-8855ORDINANCE NO. 2025-09-8855
AN ORDINANCE AMENDING CHAPTER 106, TAXATION, OF
THE CODE OF ORDINANCES OF THE CITY OF PADUCAH, KENTUCKY
WHEREAS, Ordinance No. 1986-11-2943 established a gross receipts
threshold of $3,500,000 for the City's business license tax, which has not been adjusted
for inflation since its adoption nearly forty years ago;
WHEREAS, maintaining an outdated threshold has resulted in an
increasing share of local businesses being subject to the excess receipts rate, contrary to
the original legislative intent of providing a reasonable exemption level;
WHEREAS, staff analysis demonstrates that adjusting the threshold to
reflect current -dollar values, phased in over a five-year period, will restore equity to the
business license tax system while avoiding sudden fiscal disruption;
WHEREAS, beginning in Year 6 and each year thereafter, the threshold
will be adjusted annually based on the Consumer Price Index (CPI), rounded to the
nearest $10,000, with discretion for the City Commission to defer implementation of such
adjustment in any given year;
WHEREAS, an increase from $35.00 to $50.00 in the minimum annual
license tax is necessary to maintain fairness, account for inflation, and ensure a
sustainable revenue base;
WHEREAS, the City Commission finds it in the public interest to amend
Chapter 106 of the Code of Ordinances to update the gross receipts threshold, establish a
process for annual CPI adjustments, and increase the minimum annual license tax;
NOW, THEREFORE, BE IT ORDAINED BY THE CITY
COMMISSION OF THE CITY OF PADUCAH AS FOLLOWS:
SECTION 1. That Section 106-101, General license tax schedule;
minimum annual license tax, of the Code of Ordinances of the City of Paducah,
Kentucky, is hereby amended as follows:
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) (d) of this section. The annual license tax shall be
computed in accordance with the following rate schedules:
The amount of tax payable under Schedule A shall be determined by multiplying the
business entity location's [-taimb-e grecs receipts "te $3,500,000.00
]taxablergross
receipts up to the applicable phased -in threshold amount times 0.00045 and multiplying
all gross receipts in excess of the threshold times 0.00005.
The amount of tax payable under Schedule B shall be determined by multiplying the
business entity location's [ twmble ,...,...s receipts to $3,500,000.00 ] taxable gross
a r r
receipts up to the applicable phased -in threshold amount times 0.00075 and multiplying
all gross receipts in excess of the threshold times 0.00005.
The amount of tax payable under Schedule C shall be determined by multiplying the
US1neSS entity location's [ +».ble greys receipts tip to $3,500,000.00] taxable gTOSS
receipts up to the applicable phased -in threshold amount times 0.0015 and multiplying all
gross receipts in excess of the threshold times 0.00005.
The amount of tax payable under Schedule D shall be determined by multiplying the
business entity location's [-taxable gross r-eeeipts up to $3,500,000 00 ] taxablerg oss
receipts up to the applicable phased -in threshold amount times 0.003 and multiplying all
gross receipts in excess of the threshold times 0.00005.
The amount of tax payable under Schedule E shall be determined by multiplying the
business entity location's [ taxable gross _eeeipts ttp to $3,500,000.00 ]-taxable gross
receipts up to the applicable phased -in threshold amount times 0.0045 and multiplying all
gross receipts in excess of the threshold times 0.00005.
The amount of tax payable under Schedule F shall be determined by multiplying the
business entity location's [ tmEable gross receipts up to $3,5nn� �o0 000.00-] taxable gross
receipts up to the applicable phased -in threshold amount times 0.005 and multiplying all
gross receipts in excess of the threshold times 0.00005.
B. Phased -In Threshold Adjustment. The threshold amount shall be increased from
$3,500,000.00 to $11,650,000.00 over a five-year period as follows with Year 1
beginning on January 1, 2026:
Year 1: $5,130,000
Year 2: $6,760,000
Year 3: $8,390,000
Year 4: $10,020,000
Year 5: $11,650,000
C. CPI Adjustment. Beginning in Year 6 and each year thereafter, the threshold shall be
adjusted annually based on the percentage change in the Consumer Price Index for All
Urban Consumers (CPI -U), South, as published by the U.S. Bureau of Labor Statistics In
any year where the CPI registers a decrease, the threshold amount shall remain
unchanged. In years where the CPI registers an increase the threshold amount shall be
adiusted upward and rounded to the nearest $10,000. The City Commission reserves the
right to forego the implementation of a CPI -based adjustment in an given�year.
D. (b) The minimum annual license tax for each classification shall be [$35.00] $50.00,
except as otherwise provided. Any minimum annual license tax paid by a business entity
shall be credited against the annual license tax owed for that period.
SECTION 2. The provisions of this Ordinance are hereby declared to be severable,
and if any section, phrase or provision shall for any reason be declared invalid, such
declaration of invalidity shall not affect the validity of the remainder of this Ordinance.
SECTION 3. All prior resolutions, municipal orders or ordinances or parts of any
resolution, municipal order or ordinance in conflict herewith are hereby repealed.
SECTION 4. This Ordinance shall be read
effective upon summary publication
MA
ATTEST:
�rINDSAY PARI , Paducah City Clerk
Introduced by the Board of Commissioners, August 26, 2025
Adopted by the Board of Commissioners, September 2, 2025
Recorded by City Clerk, September 2, 2025
Published by The Paducah Sun, September 9, 2025
Ord\106-101 Business License Fee Schedule
separate days and will become