FORM OL INSTRUCTIONS 

The Lincoln County Occupational Tax Office     (hereinafter referred to as the “Tax Administrator”) collects Occupational License Fees/Taxes 
(hereinafter referred to as “Occupational Taxes”) on all income resulting from transacting business within Lincoln County, Kentucky.  There is no 
minimum earned income amount before you are liable for filing a tax return.  The occupational tax is imposed upon the privilege of engaging 
in a business, profession, occupation, or trade within Lincoln County, Kentucky, regardless of the legal residence of the person so engaged.  

                             Who Must File an Occupational License Tax Return: 

1. Corporations, partnerships, sole proprietorships, estates and trusts, or other businesses engaged in an occupation, trade, or profession,
   (including agriculture and rentals) in Lincoln County, Kentucky.

2. Individuals who receive wages, salaries, commissions, or other compensation for work done or services performed in Lincoln County, Kentucky, 
   from which the full amount of occupational taxes due have not been withheld by their employer and remitted to the Tax Administrator.

    NOTE:  Any payments that are received for work performed in Lincoln County, Kentucky, are subject to occupational taxes.  If the person 
    you work for did not withhold the full amount of occupational tax, you must file a tax return. 
3. Individuals having rental income from real property where the property available for rental includes, but is not limited to, improvements such as
   warehouses, apartment buildings containing four or more units, hotel buildings, office buildings, restaurants, and other commercial structures
   shall be deemed with respect to such rentals to be engaged in an “activity” which requires a license tax to be paid and a return filed regardless of
   the amount of gross receipts received therefrom.

4. Items not subject to Occupational Taxes:  nteresti  (unless one is engaged in the business of money-lending),  ividends, d oyaltiesr on  atents,p  
   copyrights (unless the payment or salary), and payments received from Social Security and pensions.

The Tax Administrator and the Internal Revenue Service have entered into a coordination of tax administration agreement which 
allows the exchange of tax information between the two agencies pursuant to IRS Code Section 6103(d). 
A Tax Form Must Be Filed Even If: 

  Your business activity resulted in a loss for the tax year.  Complete the tax form according to the instructions provided.

   You were not actively engaged in business during the tax year but do intend to resume operations at a future date.  Check the box 
•  designated "NO ACTIVITY,” sign, and mail/deliver the return to the Tax Administrator.

   Your business activity ceased prior to the beginning of the tax year, but you have not provided written notification that operations 
  ceased.  Check the boxes designated    "NO ACTIVITY"  and   "FINAL RETURN," e     nter the date your activity ceased, sign, and mail/ 
   deliver the return to the Tax Administrator.

   Your business was operational for a portion of the tax year but ceased operation prior to the completion of the fiscal period.  Complete 
  the tax form according to the instructions provided.  Check the box designated “FINAL RETURN,” enter the date activity ceased, sign, 
   and mail/deliver the return to the Tax Administrator.

   You applied for a tax number with the intention of starting a business but never transacted business within Lincoln County, Kentucky, 
•  and do not intend to do so in the future.  Check the boxes designated "NO ACTIVITY" and         "FINAL RETURN," enter the date activity 
   ceased, sign, and mail/deliver the return to the Tax Administrator.

When to File:  Form OL must be delivered or postmarked by the 15th day of the 4th month after the end of the fiscal year.

   Taxpayers making payments of $600.00 or more to recipients other than employees (i.e. non-employee compensation payments) for 
   services performed within Lincoln County, Kentucky, are responsible to maintain records of those payments.

   The taxpayer making the payment is responsible for completing and submitting copies of Federal Form 1099-MISC, to the Lincoln 
   County Occupational Tax Office, 102 East Main Street, Stanford, KY 40484 by February 28th of the next year following the close of 
   the calendar year in which the non-employee compensation was paid.
   IMPORTANT - Persons receiving non-employee compensation payments for services performed in Lincoln County, Kentucky, will be 
   required to report and pay local tax on that income. Since many persons receiving this income are not aware of the local tax 
   requirements, we ask that you advise them to contact the Lincoln County Occupational Tax Office to obtain a local tax reporting 
   number and tax forms. Recipient’s failure to obtain a tax number and file the proper tax forms may result in additional penalties, 
   fines, and court costs.

                                                                   Page  1of  5

Non-employee compensation: 1099 data must be delivered or postmarked by               February 28th following the close of the calendar year in which 
non-employee compensation payments were made.  

Where to File:        All returns should be mailed      or delivered  to the   Lincoln County Occupational Tax Office 102,   E. Main Street, Ste 3                      ,
Stanford, Kentucky 40484, alongwith     your check made payable tothe          Lincoln County Tax Administrator. 

Signature:  If the return is being filed by a corporation, it must be signed and dated by a corporate officer authorized to sign.  If the return is
being filed by a partnership, it must be signed by a general partner.  If the return is being filed by a sole proprietor, it must be signed by that 
individual.  Additionally, the licensee who signs the return must print his/her name in the area provided. 

Extensions:       If an extension of time for filing is required, a separate extension request to the              Lincoln County Occupational Tax
Office  is mandatory in all cases.      You must file Form OL-E or a copy of your federal extension application to request an automatic 6-month 
extension to file OL  Return  .    All  extension  requests  should  include  your Occupational  License  account  number.    The  extension th     must  be 
postmarked or hand-delivered to the     Tax Administrator on or before the original due date.  Any tax due must be paid by the 15 day of the fourth 
month following the close of the fiscal year end. 

Estimated Tax:  If an extension of time for the filing of a return has been granted, any balance of the occupational tax unpaid by the regular
due date bears interest at the rate of twelve percent (12%) per annum.  

Penalties for Failure to File and/or Pay:  There is a five percent (5%) penalty per month, or a fraction of a month, to a maximum of
twenty-five percent (25%) of the total license tax liability for failure to file and/or pay a tax return by the regular or extended due date.  Pursuant to 
KRS 67.790, there is a minimum $25.00 penalty for failure to file and/or pay any return or report by the due date. 

Interest:    Interest is computed at twelve percent (12%) per annum from the original due date until the date of payment.

Refund Request:          Claims for refund or credit must be submitted within two (2) years from the filing of the tax return or due date of the tax
return, or two (2) years from payment, whichever is later.   

State Exemptions:  The following persons are exempt under Kentucky law from the net profits occupational tax and are not required to file a
return: 

1. Any company that pays both an ad valorem tax and a franchise tax pursuant to the provisions of KRS 136.120.
2. Persons whose sole business activity is the manufacture of and/or sale of alcoholic beverages. (However persons having only a po tionr
   of business activity being derived from the manufacturing and/or selling of alcoholic beverages are required to file a return, but
   mayexclude     the portion of their net profits derived from such manufacture and/or sale of alcoholic beverages.
3. Life insurance companies incorporating under the laws of and doing business in the State of Kentucky [See KRS 136.320 (4) (5)].
4. Banks,  trust  companies,  combined  bank  and  trust  companies,  combined  trust,  banking  and  title  businesses,  savings  and  loan
   associations  (whether  state  of  federally  chartered).
5. Persons whose sole wages, salaries, commissions, or other compensations earned in               Lincoln County, Kentucky, are derived from
   service as members of the Kentucky National Guard for active duty training, unit training assemblies, and annual field training.

Accounting Methods: 
CONSOLIDATED RETURNS - Are not permitted in filing this return.  If a corporation which is subject to the occupational license tax is included in a 
consolidated return, that corporation shall submit the following: 

1. Form OLbased   upon the taxable income (or loss) of the corporation subject to the occupational tax, not the consolidated taxable income.

2. A copy of the consolidated Form 1120 or its equivalent.
3. A computation sheet allocating all revenue and expense items on the consolidated Federal return to each corporation included in
   that consolidated return.

SEPARATE ACCOUNTING METHOD is not permitted in the filing of this return.  Therefore, if any entity has operations both within and outside Lincoln 
County, Kentucky, the total profit or loss per the Federal return of the entity should be reported on this return.  The total profit or loss is to be multiplied by the 
apportionment percentage of receipts and wages earned in Lincoln County, Kentucky, as computed in the apportionment calculations (Lines 20-23), rather 
than reporting only the net profit or loss from those operations in Lincoln County, Kentucky. 

                                                                     Page  2of  5

                                         READ THE SPECIFIC INSTRUCTIONS BELOW 

                        FOR THE ITEMS THAT MAY APPLY BEFORE COMPLETING FORM OL. 

The Occupational License Tax Return has been designed to accommodate the filing needs of individuals, sole proprietors, partnerships, and 
corporations.  You should complete only those items that apply to your operation: 
           W-2 - Employees receiving salaries, wages, tips, etc., from which the full amount of occupational tax was not withheld.  (Complete
            Line 1(a) through Line 1(e), and Lines 2 7through 34.)
           1099 MISC - Individuals receiving payments for contract services (non-employee compensation) who are not claiming business
            expenses.  (Complete Lines 2, 13,19, 20, 23, and Lines 2 4through 3  under4 the column marked  “INDIVIDUAL” as applicable.)
      •     Schedule C, E, or F - Individuals receiving income from the operation of a trade, business or profession.  (Complete Lines 3
            through 3 4under the column marked   “INDIVIDUAL” as applicable.)
      •     Form 1065 – Partnerships   (Complete Lines 8 through 3 4under the column marked    “PARTNERSHIP” as applicable.)

           Form 1120, 1120A, 1120S - Corporations   (Complete Lines 9 through 3 4under the column marked  “CORPORATION” as
            applicable.)

      Line 1(a): Enter the gross salaries, wages, tips, and other forms of compensation reported on Form W-2.  (NOTE:  Applies only to individuals 
who did not have the full amount of occupational tax withheld from their wages).  Amounts deferred due to Section 401K, 403B, or 457 of the Internal 
Revenue Code must be included. 
      Line 1(b):  Enter the related employee business expenses reported on Federal Form 2106.  (    Attach a copy of Form W-2 and Form 2106) 
      Line 1(c):  Subtract Line 1(b) from Line 1(a). 
      Lines 1(d) and 1(e):  Complete the apportionment computations on Lines 1(d) and 1(e) and enter the results on Line 2 7Column A, if 
applicable.  Percentage calculations should be carried out five (5) decimal places.  EXAMPLE: “22.12345%” or “.2212345” 
      NOTE:  If you had a loss from a business operation, you may not offset your loss against wages reported on Line 1(e). 

      Line 2:  Enter the amount of non-employee compensation reported on Federal Form 1099 MISC or the amount of other income per Form 1040. 
           (NOTE:  Line 2 should be completed only by individuals who received payments for contract services who are not claiming business 
expenses. Attach a copy of page 1 of Form 1040 and Form 1099 MISC).  If you had no other type of income to report (i.e. you did not own or operate 
a business during the year), read the instructions for Lines 13,   19, 20, 2 3and Lines 2  through4 3  and4complete the line items according to the 
instructions provided. 
      Line 3:  Enter the net profit or loss as shown on Federal Schedule C.  (Attach a copy of page 1 and 2 of Schedule C, or Schedule C-EZ) 
      Line 4:  Enter 100% of the short term capital gains and long term capital gains carried over from Federal Form 4797 or Federal Form 6252 
(installment sales) to Federal Schedule D representing gain from the sale of property used in your trade or business.  (Attach a copy of Form 4797, 
pages 1 and 2, or Form 6252.) 

  Line 5:  Enter the total rental income or loss per Federal Schedule E.  (Attach   a copy of Federal Schedule E of Form 1040.) 
        NOTE:  Rental income or loss should be reported on Line 5 only if the rental property constitutes an activity.  Activity is defined in Items 3 
and 4 under the heading, “Who Must File an Occupational License Tax Return (Form OL)”. 
      Line 6:  Enter the net farm profit or loss per Federal Schedule F.  (   Attach a copy of Federal Schedule F)  .   NOTE:  Farm profit or losses 
should be reported only if the farm is located in  Lincoln County, Kentucky.  Farm losses for farms located in Lincoln County, Kentucky are subject 
to the hobby loss rules (U.S. Department of Treasury Regulations 1.183.1(c) and 1.183.2(b)). 
      Line 7:  Enter the net gain or loss from the sale of property used in your trade or business per Federal Form 4797. (Attach a copy of Form 4797, 
pages 1 and 2) 
      Line 8:  Enter the Ordinary Income or Loss per Federal Form 1065.  (Attach a copy of Federal Form 1065, Pages 1, 2, 3 and 4, Schedule of 
Other Deductions, and Rental Schedule(s) if applicable, or its equivalent.) 
      Line 9:  Enter the Taxable Income or Loss after special deductions and net operating loss per Federal Form 1120, 1120A, or the Ordinary 
Income or Loss per Federal Form 1120S.  (Attach a copy of Federal Form 1120 or 1120A, Pages 1 and 2, or 1120S, Pages 1, 2 and 3, Schedule of 
Other Deductions, and Rental Schedule(s) if applicable, or its equivalent.) 
      Line 10:  Enter any deduction taken for occupational taxes by an individual on Schedule C, E, or F, by a partnership on Form 1065, or by a 
corporation on Form 1120, 1120A, or 1120S, or for state taxes based on income on Form 1120. 

                                                                      Page  3of  5

       Line 11:  Enter the total of the income items listed below which are allocated to the partners or shareholders and are not included as income on 
Federal Form 1065 or 1120S.  (     Attach a copy of Schedule K, or its equivalent, and Rental Schedules, if applicable.) 
        
            Net income from rental real-estate activities                        Net short-term capital gain
             Portfolio income                                                    Other portfolio income
            Net income from other rental activities                              Net long-term capital gain
            Interest income                                                      Guaranteed payments to partners
         •   Dividend income                                                      Net gain under Section 1231 (other than due to casualty or theft)
           Royalty income

       Line 12:  Enter the amount of any net operating loss, if taken as a deduction on Federal Form 1120.  (This amount is to be added to taxable 
income.) 

       Line 13:     Enter the total of Lines 2 through 12, as applicable. 

       Line 14:  Enter the total of the items listed below that are allocated to the partners or shareholders which are not included as losses or expenses 
on Federal Form 1065 or Form 1120S, as they are allowed as deductions for occupational tax purposes.  (Attach a copy of Schedule K or its 
equivalent and Rental Schedules, if applicable.) 
          •   Net loss from rental real-estate activities                         Net loss under Section 1231  (other than due to casualty or theft)
             Net loss from other rental activities                               Charitable Contributions
             Portfolio loss                                                      Expense deductions for recovery property (Section 179)
             Net long-term capital loss                                         • Deductions related to portfolio income
             Net short-term capital loss
         NOTE:  Contributions to KEOGH Plans, Simplified Employee Pension Plans, and Medical Insurance Premiums on behalf of partners 
or shareholders are not deductible on Form OL. 

       Line 1 :5   Adjustments can be made on Form OL if any sum is elected by the licensee as a credit against its federal income tax liability in lieu 
of a deduction for business expenses otherwise available to the licensee. Included in this list are the following: 
        (1)  If wage and salary expense is being reduced as a result of the work opportunity credit. 
        (2)  If the depreciable basis of an asset was reduced by the amount of investment credit claimed, ACRS depreciation may be taken 
        on that basis reduced over the life of the asset. 
        Line 1 :6  Corporate taxpayers may deduct, if substantiation is provided by including a completed copy of Schedule C of the Federal Form 
1120, the following amounts (net of the deductions properly allocated thereto) without proof of non-unitary source:    
             Foreign rental income                                               Foreign royalty income
            Foreign dividend income                                              Foreign capital gains
            Interest earned on U.S. Obligations
           Ordinary income or loss from other partnerships or S-Corporations which is included in income on Line 8 or Line 9 of Form OL.
             (Please note the occupational number of the account under which the income is being reported.)

       Line 17:     Enter the amount of professional expenses claimed by the partners on their individual Form 1040 which are related to, but not 
reimbursed by, the partnership. (Include a schedule listing partners name(s), the type of deduction, and the amount of each deduction.) 

       Line 18:    Enter the total of Lines 14 through 17, as applicable. 
       Line 19:  Subtract Line 1 8from Line 13.   This entry represents your “  Adjusted Net Profit”which is also entered on Line 24. 
       Lines 20-23:      All licensees who conducted a business activity in Lincoln County  , Kentucky, must complete Lines 2 -20 3, regardless of profit or 
loss, if total gross receipts and payroll were not confined solely to Lincoln County, Kentucky.  All percentages should be carried out five (5) decimal 
places.  (EXAMPLE: “22.12345%” or “.2212345”)  Gross figures must be used when completing Lines 2 0and 21.  
       Line 20(a): “   Lincoln County, KY" -    Enter total gross receipts from sales made or services performed in  Lincoln County, Kentucky. 

       Line 20(b): “  otalT Everywhere" -      Enter total gross receipts (less returns and allowances) from sales made or services performed 
everywhere for your total operation per the Federal return. 
       Line 20(c): “   Lincoln County Percentage" - Divide the entry in Column A of Line 2 ,0by the entry in Column B of Line 
       20. Enter the resulting percentage on Line 20, Column C.  The percentage should be carried out five (5) decimal places.
       Line 21( ):a “  Lincoln County, KY    " - Enter total gross wages paid to employees for work performed within Lincoln County, 
Kentucky.  NOTE: This does include compensation of officers, but not contract or sub-contract labor.
       Line 21(b): “Total    Everywhere"     - Enter total gross wages paid to employees everywhere per the Federal return.  NOTE:  This does 
include compensation of officers, but not contract or sub-contract labor. 
       Line 21(c): “   Lincoln County   Percentage” – Divide Line 21, Column A by Line 2 , Column1  B and enter the result.  The percentage 
should be carried out five (5) decimal places. 

                                                                          Page  4of  5

   Line 22: “Total   Apportionment Percentage for           Lincoln County, Kentucky”- Add Line 20, Column C to Line 2 ,1Column C and 
enter the result.  The percentage should be carried out five (5) decimal places. 
   Line 23: “Apportionment       Percentage”      - If both Lines 2 0and 2 1are applicable, divide the entry on Line 2 2by 2, and enter the result 
on Line 23, and Line 24, Column A of the front page.  If    either Line 20 or Line 21 is applicable, but not both, then the entry in Line 2 2should 
be transferred to Line 2 3and Line 25, Column A of the front page.  The percentage should be carried out five (5) decimal places. 

   Line 2 :4   Enter the Adjusted Net Profit figure from Line 19. 
   Line 25:   Insert the percentage from Line 2 . 3Enter 1      .00000 (100%) in Column A if taxpayer’s total business operations are 
in Lincoln County, Kentucky.  The percentage should be carried out five (5) decimal places. 

   Line 26:   Multiply the entry on Line 2 4by the percentage on Line 25, Column A, and enter the result in Column A. 

   Line 27:    Enter the amount of wages from Line 1(e) earned while working in          Lincoln County, Kentucky, in Column A.  If you had other 
sources of income from which occupational taxes were not withheld, you are required to complete Lines 2 through 19.  

   Line 28:   Add the entries on Lines 26and 2 , and7     enter the greater of the total of Line 2 plus6 Line 2 , or Line7 2 .  [7  NOTE:  Line 2     8 
cannot be less than Line 27.  If you had a loss from a business operation, you may not offset your loss against wages reported on Line 1(e).]   

   Line 29:  “Tax Calculations”       - Multiply Line 28, Column A, by the  Lincoln County tax rate of .01000 andenter          the results in Column .  A
   Line 30:  Total Occupational Tax Due       -Enter the result of Line 29. 

   Line 31:    Enter any credit due from prepayments of estimated tax for the tax year in Line 31(a). 
   Line 32:  Balance of Occupational Tax Due            - Subtract Line 3 1from Line 30, and enter the result. 
   Line 33:    Penalty and interest charges resulting from late filing or late payment of the occupational tax should be entered on Line 3 .              3
(See "Penalty and Interest" on page 2 of the Instructions)   

   Line 34: Amount     To Be Paid      - Add Lines 3 2and 3  and3   enter the result.  The amount on this line reflects the total liability for the 
tax year. Payment of the total tax liability including, penalty and interest charges, should accompany the return as filed. 

Records supporting the amounts reported as taxable to       Lincoln County, Kentucky, should be retained five (5) years and must be presented upon 
request. 

                                                                        Page  5of  5