Kenton Mayors Group discusses occupational fees, apportionment and refunds - NKyTribune

"The bill was about local occupational license fees, and its goal was to amend rules for how wages are apportioned to local governments, and also to handle related refund claims. The purpose was to define terms, and set requirements for local occupational license fees, especially regarding where the employee wages are taxed. The bill specified that 100 percent of the employee wages that are associated with a corporate office be apportioned to the local government where that office is located."

"The sole exception is wages for work performed at satellite offices which would be excluded from this specific apportionment rule. Washington talked about this bill, saying it represents a real and growing fiscal problem facing cities like Covington due to the fact that remote and hybrid work has fundamentally changed how local tax is sourced, without taking into consideration where that economic activity is actually based."

""What we are asking the General Assembly to consider is that if a corporation with more than 1000 people, and they have received some sort of incentive from the city, that we be allowed to collect the payroll taxes," said Washington. While a particular reason for the withdrawal of the bill was not given, it was assumed that the concerns from local governments or businesses regarding the complexity of the proposed refund mechanisms might have prompted a need for further revision."

Covington Mayor Ron Washington led a February Mayors' Meeting and reported that House Bill 495 was withdrawn. The bill targeted local occupational license fees, aiming to amend wage apportionment rules and manage related refund claims. It would have apportioned 100 percent of employee wages tied to a corporate office to the local government where that office is located, with an exception for satellite-office work. Remote and hybrid work patterns have altered how local tax is sourced and created fiscal pressure for cities. Washington asked the General Assembly to allow collection of payroll taxes from large, incentivized corporations and plans to propose a revised refund mechanism.

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