Tax season: Time to file occupational fee/license renewal
COVINGTON, Ky. - With accountants neck deep in tax season, Covington’s Finance Department has a friendly reminder for businesses: Don’t forget to fill out the City’s Form OL-3.
That’s the annual Occupational Fee & Business License Renewal Return - and it’s required to be filed by ALL businesses, with April 15 being the deadline for most. (Technically, it’s due the 15th day of the fourth month following the close of a business’s taxable year.)
“Over the years, we’ve seen that small businesses in particular remember to fill out their federal return, and they remember to do their state return, but they often forget - or neglect - to file their City taxes,” said Shannon White, the City’s revenue collections manager.
White said there’s also a lot of misconception surrounding the OL-3 return, and when it must be filed. “A lot of people assume they can skip the return if they didn’t make money or other things happened, but that’s just not true,” she said.
To clear up the “myths,” the Finance Department is issuing reminders.
A return must be filed even if:
- Business activity resulted in a loss for the tax year.
- A business was operational for a portion of the taxable year, then ceased operations.
- A business was not actively engaged in business during the taxable year but intends to resume operations the next taxable year.
- Business activity ceased prior to the beginning of the taxable year, but you have not provided written notification that operations ceased.
- You applied for a tax number with the intention of starting a business, but never transacted the business within the City of Covington.
- Your business is a nonprofit organization as determined by the Internal Revenue Service.
- You rented space in your home, i.e. Airbnb or VRBO during the taxable year.
- You sold your rental property during the taxable year.
Six-month extensions may be granted only if the business requests the extension on or before the due date and pays the amount properly estimated as its fees by the due date, White said.
The OL-3 form and instructions were mailed to existing businesses. But the form can be found
HERE and its instructions are
HERE.
The net profits tax makes up 6 percent to 7 percent of the General Fund revenue used by the City to pay for things like police officers, firefighters, street maintenance, and some business incentives, Finance Director Muhammed Owusu said.
“It’s critical that we collect this revenue so we can continue to provide a high level of services, and it’s important that our businesses who do file their returns don’t have to pick up the slack for those that don’t,” Owusu said.
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