Paducah, KY Taxes

Corporate Income Tax/Franchise Tax

Kentucky’s corporate income tax structure consists of three brackets with the following rates:

  • 4 percent on the first $50,000 of taxable income
  • 5 percent of the next $50,000 of taxable income
  • and 6 percent of the taxable income over $100,000

Kentucky does not levy a corporate franchise tax.

Incentive

Credits for up to 100 percent of approved costs for up to 10 years on land, buildings, site development, and building fixtures and equipment used in new or expanded manufacturing operations are available under the Kentucky Industrial Development Act (KIDA). Companies must create at least 10 new, full-time jobs and invest at least $100,000.

Gross Receipts Tax

Corporations pay a Limited Liability Entity Tax, which is the lesser of 0.095 percent of gross receipts or 0.75 percent of gross profits. The tax phases are in between $3 million and $6 million of gross receipts or profits, with a minimum tax of $175.

Real Property Tax
Tax Rate (within I-24 Park and Paducah Commerce Park)

Click Image to ViewTAX I-24

Tax Rate (within Ohio River Triple Rail Mega Site)

Click Image to ViewTAX Megasite

Incentive
Note, real property taxes may be abated for up to five years by the City of Paducah with the exception of school taxes. Real property taxes may be abated for up to 30 years through and Industrial Development Bond process with the exception of school taxes.

Personal Property Tax

Located in Industrial Park West or Paducah Commerce Park – 1.63 per $100 accessed value

Located in Ohio River Triple Rail Mega Park – 1.2793 per $100 accessed value

Unemployment Insurance
  • New Employer Rate 2.7%
  • Minimum Earned Tax Rate 1.00%
  • Maximum Earned Tax Rate 10.00%
  • Taxable Wage Base $9,600 and .22% surcharge
  • $9,600 is the maximum taxable amount.
Permitting and Fees
    1. Submit two complete sets of drawings/plans for approval
    2. Submit site plan to Paducah’s planning/zoning department for approval
    3. Complete subcontractors list
    4. Complete permit application
    5. Verify contractors are licensed and insured
    6. Site plans and drawings are approved
    7. Obtain building and electrical permit
Personal Income Tax

2% > $0
3% > $3,000
4% > $4,000
5% > $5,000
5.8% > $8,000
6% > $75,000

Local Occupation Tax

Employers are responsible for withholding an occupational license tax on the gross wages of their employees. If a business is located within the city of Paducah the rate is 2.0 percent of gross wages. If a business is located in McCracken County, but not within the city, the rate is 1.0 percent of gross wages.

Incentive

Your project may earn up to 4 percent (2 percent from the state and 2 percent locally) of the state and local occupational tax as an annual grant to your company

Unemployment Insurance
  • New Employer Rate 2.7%
  • Minimum Earned Tax Rate 1.00%
  • Maximum Earned Tax Rate 10.00%
  • Taxable Wage Base $9,600 and .22% surcharge
  • $9,600 is the maximum taxable amount.
Sales/Use Tax

The sales/use tax is 6 percent of gross receipts on purchase price.

  • Repair and replacement parts for trucks weighing more than 44,000 pounds, including any towed unit, used exclusively in interstate commerce for the conveyance of property or passengers for hire
  • Items purchased for resale
  • Machinery for new and expanded industry
  • Raw materials, industrial supplies and industrial tools
  • Energy and energy producing fuels, to the extent that they exceed 3 percent of the cost of production
  • Certified pollution control equipment
  • Industrial machinery sold and delivered out-of-state to manufacturers or processors for use out-of-state
  • Commercial printers or direct mailers engaged in business in Kentucky are exempt from collecting sales and use on the sales of printing or direct mail advertising materials that are both printed and distributed from outside of the state if certain reporting requirements are fulfilled. The purchaser is still liable for tax on the advertising materials delivered to Kentucky addressees (KRS 139.365).
  • Containers, packaging and wrapping materials
  • Motor fuels for highway use
  • Industrial supplies and tools used to perform a manufacturing process on another entity’s property
  • Durable medical equipment and oxygen equipment for home use and any “repair and replacement parts” used in conjunction with such equipment
  • Kentucky Enterprise Initiative Act (KEIA) provides for sales tax refund on building materials and research and development (R&D) equipment. The areas of focus are manufacturing, technology and tourism. The minimum investment required is $100,000 in preference zones and $500,000 in all other areas. Projects must be approved by KEDFA. (KRS 154.020-200 to KRS 154.020-216)
Manufacturing Machinery Tax

Manufacturing machinery and pollution control equipment are subject to a personal property tax of .15/$100 of assessed value

Workers Compensation

Average Rate is .23/$100 of payroll or 2.3 percent (this is 1.5 percent below the national average)

Maximum weekly benefit is 66.6 percent of normal pay up to $711.79

Kentucky Department for Environmental Protection
Permits, Fees, Regulatory Times, and Contacts
Permitting Program Information: http://www.dep.ky.gov

Permit Type

Renewal Period

Fee

Fee Description

Regulatory Time

Contact Division

Phone

Air Quality

(Minor)

5 Years

$150

Flat Fee for

25 Tons or Less

120

Days-Minor

Air Quality

502-564-3999

Air Quality

(Major)

5 Years

$30-$35

Per ton over 25 tons

210

Days-Major

Air Quality

502-564-3999

Kentucky Pollutant

Discharge

Elimination System

1 Year – Construction

$900

Minor Construction

180 Days

Water

502-564-3410

Kentucky Pollutant Discharge Elimination System

5 Year – Operation

$2,100

Minor Operation

180 Days

Water

502-564-3410

Kentucky Pollutant Discharge Elimination System

1 Year – Construction

$1,800

Major Construction

180 Days

Water

502-564-3410

Kentucky Pollutant Discharge Elimination System

5 Year – Operation

$3,200

Major Operation

180 Days

Water

502-564-3410

Water Withdrawal

No Renewal

No Fee

90 Days

Water

502-564-3410

Floodplain Reconstruction

No Renewal

No Fee

20 Working Days

Water

502-564-3410

Drinking Water

No Renewal

$50-$800

45 Days

Water

502-564-3410

401 Water Quality Certification Includes Wetlands

1 Year

No Fee

None

Water

502-564-3410

Ground Water Plan

Revise Every 3 Years

No Fee

Complete Prior to Operation

Water

502-564-3410

Storm Water

New Constr. untill Constr. Complete Operation –

5 Years

No Fee

File 48 hrs. Prior to Construction

Water

502-564-3410

Wastewater

Construction – 1 Year

$450 -$1,800

45 Days

Water

502-564-3410

Sewer Line Extension

Construction – 1 Year

$200 – $800

45 Days

Water

502-564-3410

Hazardous Waste Storage

10 Years

$3,000 – $19,400

Tanks & Containers

180 Day Storage

Waste Management

502-564-6716

Hazardous Waste Treatment/Disposal

10 Years

$3,000 – $19,400

Dependent on Application Type

180 – 365 Days

Waste Management

502-564-6716

Residual Landfill

10 Years

$5,500

180 Working Days

Waste Management

502-564-6716

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