OCCUPATIONS SUBJECT TO LICENSE FEES
§ 110.31  TYPES OF COMPENSATION; SPECIFIC GROUPS.

(A) Musicians and entertainers.  In the field of professional musicians there has arisen a practice peculiar to the engagement of musicians exclusively through so-called “contractors.” The practice which arose by prescription by the American Federation of Musicians and of local union regulations, enables the purchaser of music to deal with only one of the number of musicians required for a particular occasion.

(1) Contractor.  The term CONTRACTOR means that individual musician through whom the purchaser and the musician negotiates the contract of service and the performance thereof. The contractor may or may not perform actual musical service under a contract which he has negotiated.

(2) Purchaser of music.  The person for whom or which the musical services are to be performed or furnished and who exercises an employer's control over the conduct of the musicians. For example, hotel, cafes, taprooms, restaurants, theaters, clubs, radio stations and radio sponsors.

(3) Name bands or orchestras.  A name band or orchestra is one which is identified or known by a name which holds itself out to the public as a permanent organization, and in addition thereto has either fixed personnel or the individual member musician has contracted for his services with the leader or the owner of the band at a fixed salary by term or by individual engagement and over whom the purchaser has no direct control.

(4) Contract for purchase of music.  When a contract for the purchase of music has been executed between a purchaser and a contractor, the musician shall be deemed to be the employee of the purchaser, except in the case of name brands, in which event the musicians shall be deemed employees of the leader or owner of the name band. The purchaser, and in the case of a name band, the leader or owner thereof, shall be the person responsible for withholding the license fee from the wages paid to the musicians, and the remittal thereof to the city tax office.

(5) Entertainers other than musicians.  An entertainer other than a musician is usually engaged by a purchaser through a booking agent. The booking agent, once the contract of employment has been executed, does not exercise an employer's control over the entertainer. The owner of a club, café, taproom, theater, or any place which furnishes entertainment to the public or to its patrons, shall be deemed the person liable as an employer of entertainers. The employer must deduct the license fee from the compensation paid to the entertainer and remit the same to the city tax office.

(1) General.  Individuals engaged in the sale of insurance may be either employees or independent contractors as follows.

(a) Where the individual is subject to the direct control of another as to the manner of his conduct and is paid a fixed fee, he is considered an employee and the amount of the license shall be withheld at the source.

(b) Where the individual is not under the direct control of another and may conduct the sale as he sees fit, receiving his payment in the form of commission from the sale, he is considered an independent contractor and shall file his own return and make payment as an independent contractor.

(2) Commissions subject to license fee.

(a) In determining whether the commissions payable by reasons of the selling of any policy by an agent resulted from work done or services performed or rendered in the city, the test shall be the residence of the insured at the time of issuance of the policy, rather than the actual place of solicitation, except where the solicitation is in the city and the agent's established place of business is within the city, the commission is subject to the license tee regardless of the residence of the insured;

(b) If an agent has an office outside the city as well as an office of his own within the city, the commission on policies sold to non-residents, if handled through the outside office, are not subject to a license fee, since under such circumstances, they are not earnings or profits of an independent city business.

(3) Group insurance commissions.  Commissions paid on the sale of contracts of group insurance are subject if the group is located within the city as a unit without regard to the residence of the writing agent.

(4) Bonuses and incentive payments.  That proportionate part of all bonuses and incentive payments received by an agent, which bears the same ratio to the total amount of bonuses and incentive payments received by him as the amount of commissions received by him on policies sold to residents, bears to the total amount of commissions received by him on all policies sold to both residents and non-residents is subject to the license fee.

(5) Advances and drawing accounts.  There are two main types of advances and drawing account payments.

(a) Those which impose upon the agent a written obligation to repay if they are not in fact earned. The first of these two types of advance and drawing account payments is in the nature of a loan and accordingly is never subject to license fee. All commissions or bonuses applied toward the repayment of these types of advances and drawing accounts are subject in accordance with the rules set forth above.

(b) Those which (though offset by commissions as earned) cannot be recovered at law even though the agent fails to produce business to justify them. This second type of advance and drawing account payment is subject compensation when received to the extent that it exceeds compensation earned after July 1.

(6) Collection of license fee at source.  It is the duty of all companies doing business in the city (or general agents in the cases of agents whose contracts are with a general agent alone and to whom payment is made by general agent out of funds of general agent) to deduct or withhold monthly or more often the amounts of license fee due on all compensation paid to agents who are considered employees.

(1) Compensation received from the federal government for services performed within any federal reservation situated within the geographical limits of the city, title to which is in the federal government, is subject income, even though exclusive jurisdiction thereof was granted to the federal government by the state and the city.

(2) Compensation received from state, county and municipal governmental agencies is subject to the provisions of this chapter.

(3) Refund of tax withheld and paid covering activities outside the city will be made to employee upon application on form provided by the Director of Finance.

(1) Real estate salesmen or brokers who are engaged in the business as employees rather than as independent contractors are not required to file a return for the commissions earned by them. The employer is required to deduct the fee from the commissions earned and remit the same to the city tax office.

(2) Real estate salesmen or brokers acting as independent contractors are subject to a license fee on their net profits in accordance with the rules and regulations herein pertinent.

(F) Caregivers.

(1) A licensed caregiver (except provided below) is in the same status as any other professional person and is required to file a return upon his net profits. He may deduct the actual expenses incurred from the earnings of his fees. Deductible items are expenses recognized as deductions by the Internal Revenue Service and Revenue Cabinet.

(2) A licensed caregiver regularly employed by a hospital, institution, business entity or individual is subject to the withholding provisions of this chapter.

(H) Domestic servants.  Domestic servants employed in private homes are not subject to the provisions of this chapter.

(J) Miscellaneous.

(1) Where compensation is received (paid) in property, its fair market value, at the time of receipt, shall be subject to a license fee and/or to withholding (deduction of fee at source). Board and lodging and similar items shall be included in earnings at their fair market value, where board and lodging is considered part of the compensation paid. However, the value accepted for the purpose of the state and federal payroll taxes may be accepted by the Director of Finance.

(2) In the case of employees who incur and pay expenses directly connected with performance of their duties or services and for which no reimbursement is made by the employer, the reasonable actual expenses incurred and paid in earning the compensation may be deducted in computing the amount subject to the license fee. To be allowed, however, the expenses must be recognized as deductions by the federal and state authorities for payroll and tax purposes.

(3) Such items as personal, family or living expenses, expenses commuting to and from work, old-age benefits taxes, deductions for group insurance, hospitalization pension plans, and the like are not deductible as expenses directly connected with the performance of service.

City of Stanford, 305 E Main Street, Stanford Ky 40484  606-365-4500 Web design by KyWebMaster.com  Email Webmaster  606-365-2979