City of Madisonville, Kentucky 
                                     Net Profit License Fee Return Instructions 
 
 The City of  Madisonville  Net Profit License  Fee is levied at the annual  rate  of 1.5  percent  of  the net profits of all 
occupations, trades, professions or other businesses engaged in said activities in the City.  Specifically included within the foregoing is 
rental income received  from the leasing  or rental of real and/or  personal property located within the city limits  of Madisonville, 
Kentucky subject to the following exemption: the license fee shall not apply to net income received from the leasing or rental of less 
than four (4) residential rental units per year.  The fee is levied against a partnership, or association as a business entity; therefore, the 
individual partners or members are not required to file a return on their distributive share of the profits.  The Net Profit License Fee 
Return to be filed by all businesses having some receipts and/or payroll within the City Limits of Madisonville must be based on the 
net income as reported to the state or federal government.  The Net Profit License Fee Return must be filed before April 15, if 
licensee is on a calendar year, or 105 days after the end of the fiscal year, sale, liquidation or transfer.  Checks or money orders 
should be made payable to the Finance Director, City of Madisonville. 
 
                                                     Basis of License Fee 
 
 In computing the amount due, the licensee begins with gross income less total deductions as shown by their Federal  Tax 
form shown below.  A copy of the completed applicable tax form MUST accompany the Net Profit License Fee Return. 
 
                         Individual Proprietorship          Schedule(s) C, E - 1040 Federal Tax Form 
                         Fiduciary                          Federal Tax Form 1041, Schedule E (if applicable) 
                         Partnership                        Federal Tax Form 1065, Form 8825 (if applicable) 
                         Corporation                        Federal Tax Form 1120/1120S, Form 8825 (if applicable) 
        
                                         Instructions for All Licenses 
Section A 
 Lines 1 through 8 are questions which must be answered by each Licensee.  Please answer each question completely. 
 
Section B 
Line 9  Enter Gross income as shown by the appropriate Return. 
Line 10  Enter total deductions as shown by the Return. 
Line 11  Enter Net Income as shown by the Return. 
Line 12  Add items not deductible totaled on Line H of Section C. 
Line 13  Total Lines 11 and 12. 
Line 14  Deduct items not subject totaled on Line N of Section C. 
Line 15  Enter Line 13 less Line 14. 
Line 16  Enter average percentage as determined in Section D. 
Line 17  Enter profits subject to Madisonville License Fee – Line 15 X Line 16. 
Line 18  Enter 1.5% of Line 17. 
Line 19  Deduct credits of minimum license fees and/or estimated payments. 
Line 20  Balance (Line 18 less Line 19) 
Line 21  Enter Interest. 
Line 22  Enter Penalty. 
Line 23  Enter amount due, Line 20 plus Line 21, plus Line 22.  (Pay this amount to the Finance Director, City of Madisonville) 
 
 •        If an extension is necessary, a written request and copy of Federal application for extension must be submitted to the 
          City of Madisonville before the due date of the Net Profit License Fee Return.  If extension is granted, enter date on Line 
          22.  Interest remains due from original due date (See Line 21). 
 
Section C 
 Section C is provided for the licensee to add (Lines A-H) items which are subject to the License Fee.  Most of these appear as 
a part of the deductions taken on the Federal Return;  therefore, they must be added back on Line 12.  Lines I-N of Section C provide 
for the specific deduction of items not subject to the License Fee.  Many of these items are only taxable for Federal Income Tax 
purposes so they must be deducted on Line 14.  Attach applicable schedule explaining any deduction on Line M. 
 
Section D 
 Section D must be completed by taxpayers with business receipts and/or payroll, both within and without the city limits of 
Madisonville.  Completion of the schedule allocates to Madisonville the proportionate part of the taxpayer’s total business activity 
attributable to Madisonville.  However, if one of the two factors (business receipts or payroll factor) is missing the remaining 
factor is the Average or Business Allocation Percentage (Line R of Section D). 
 
Any questions should be directed to the Finance Director, P.O. Box 1270, Madisonville, KY  42431.  Phone (270)824-2107