Louisville Occupational License Tax: OL-3 Filing and Withholding

The Louisville occupational license tax is a local wage and net-profits tax administered by the Louisville Metro Revenue Commission (LMRC). Residents who work in Jefferson County pay a combined 2.2% on gross wages; non-residents who work in the county pay 1.45%. Businesses pay the same percentages on net profits from local operations. There is no minimum income threshold, so any local earnings or profit trigger a filing obligation.¹

Who Owes the Tax

The tax reaches every person who earns wages for work performed inside Louisville Metro, whether they live in Jefferson County or commute from another county or state. Employers based outside the county still trigger withholding if their employees do work within Metro boundaries.²

Businesses owe the tax on net profits from local activity. The ordinance describes five ways a business can be connected enough to Louisville Metro to owe: keeping a fixed location in the county, owning or leasing local real estate for business use, holding inventory locally for sale, regularly soliciting or transacting business with local customers, or otherwise creating a substantial connection to Metro government.²

One point catches people off guard. If your business has any local nexus, you must file a return even in a loss year. There is no minimum net profit before filing becomes mandatory.³

Rate Breakdown

Residents who both live and work in Louisville Metro pay 2.2% on gross wages. That total is made up of three pieces:

Louisville Metro Government: 1.25%
Transit Authority of River City (TARC): 0.2%
School Boards Tax: 0.75%

Non-residents who work inside the county but live elsewhere pay 1.45%. That rate covers the Metro Government and TARC portions but not the School Boards Tax.⁴³

Businesses pay the same rates on net profits from local activity. The base occupational license fee is 1.25% of net profits, with the 0.2% transit tax added.²

Extra Rates in Smaller Cities

Several incorporated cities inside Jefferson County levy their own occupational tax on top of the Metro-wide rate. Jeffersontown charges 1% of gross wages with no exemptions or caps.⁵ St. Matthews charges 0.75% of gross wages and commissions.⁶ If you work in one of these cities, your combined burden is higher than the standard Metro rate. Other incorporated cities may have their own rates, so it is worth checking with the city directly.

What’s Exempt

The Metro Code lists specific categories that fall outside the tax:

Banks, trust companies, and savings and loan associations (state or federally chartered)
Insurance companies already paying a local premium-based license tax
Public service corporations paying the state ad valorem tax on property assessed by the Kentucky Department of Revenue
Multichannel video and communications providers, for the portion of their business providing those services
Licensed alcoholic beverage manufacturers and distributors, for the portion of net profits from those activities
National Guard pay for active duty training, unit training assemblies, and annual field training
Pay for precinct election workers and election training
Distributions from investment funds qualifying under KRS 154.20-250 to 154.20-284, to the extent not taxable to an individual investor
Casual yard sales at a residence, unless they run more than three consecutive days or occur more than four times a year

These exemptions come from Louisville Metro Code § 110.03.⁷ Kentucky state law also requires several of them in any county with a population of 300,000 or more, including the financial institution, National Guard, and election worker exclusions.⁸

Passive income sits outside the tax by definition rather than by exemption. The ordinance reaches only wages and compensation for work performed locally, plus net profits from business activity conducted locally. Interest on a savings account or dividends on stock is not covered.

Filing the OL-3

Businesses and individuals who owe tax on net profits file Form OL-3, the standard Occupational License Return. You can file through the LMRC’s online portal, the Metro Integrated Tax System (EMINTS).⁹ You can also mail a paper return to the Louisville Metro Revenue Commission at 617 W. Jefferson Street, Louisville, KY 40202.¹⁰

Every return needs an account ID number and the tax year ending date. Individuals and sole proprietors provide a Social Security number or tax identification number; corporations and partnerships provide a Federal Employer Identification Number. Full legal name and current address are also required.¹¹

Due Dates and Extensions

Calendar-year businesses file by April 15. Fiscal-year businesses file on the 15th day of the fourth month after their fiscal year ends. A June 30 year end, for example, produces an October 15 deadline.¹²

An automatic six-month extension is available by filing Form OL-3EXT, or a copy of your federal extension application, on or before the original due date. The extension buys time to file, not time to pay. Interest still runs on unpaid tax after the original deadline.¹⁰

Quarterly Estimated Payments

Corporations and partnerships whose total tax obligation exceeds $5,000 in any tax year must submit quarterly estimated payments using Form OL-3D.¹

Employer Withholding

Employers carry most of the administrative weight for wage earners. Every employer paying compensation for work performed in Jefferson County must withhold the occupational license tax from each paycheck and remit it to the LMRC.² If an employer fails to withhold, the employee is still personally on the hook, so checking a pay stub now and then is a good habit.

All employers file Form W-1, the Quarterly Withholding Return, after each calendar quarter. The return for the quarter ending March 31, 2026, for example, is due April 30, 2026.¹²

Larger employers face an extra step. If you withheld more than $3,000 in occupational license fees during any of the four preceding quarters, you must submit monthly deposits using Form W-1D, each due by the 15th of the following month.¹³

By February 28 each year, every employer must file Form W-3, the Annual Reconciliation, along with W-2 information for all employees who worked in Jefferson County the prior calendar year. Employers with more than 25 W-2 records must submit them electronically.¹⁴

Penalties and Interest

Missed deadlines add up fast. For both OL-3 net profits returns and W-1 employer withholding returns, the structure is the same:

A 5% penalty on the unpaid tax for each month or partial month a return or payment is overdue, capped at 25%
A minimum $25 penalty for failing to file any return by its due date, even if no tax is owed
Simple interest of 12% per year on any unpaid tax, running from the original due date until the balance is paid¹⁵

A business that files on time but pays late still faces both the 5% monthly penalty and the 12% annual interest. Requesting an extension avoids the filing penalty but does not stop interest from accruing on any unpaid balance after the original due date.¹⁶

Reaching the Revenue Commission

The LMRC handles filing questions, account registrations, and payment issues. The commission does not accept sensitive information by email; use the secure messaging feature inside the EMINTS portal for written communication instead. In-person visits at 617 W. Jefferson Street require a scheduled appointment, which you can arrange by calling (502) 574-4860. Payments can be dropped off without an appointment.¹⁷

1
Louisville Metro Government. Forms and Publications
2
American Legal Publishing. Louisville/Jefferson County Metro Code of Ordinances – 110.02 Levy of Occupational License Tax; General
3
Louisville Metro Government. Form OL-3 (Occupational License Return)
4
Louisville Metro Government. Form W-1 Instructions Tax Year 2025
5
Jeffersontown, KY. Occupational Tax
6
City of St. Matthews. Occupational Tax
7
American Legal Publishing. Louisville/Jefferson County Metro Code of Ordinances – 110.03 Exempted Activities
8
Kentucky Legislative Research Commission. KRS 68.180 Occupational License Tax in Counties Containing 300,000 Population
9
Louisville Metro Government. Metro Integrated Tax System (EMINTS)
10
Louisville Metro Government. Form OL-3EXT Instructions
11
Louisville Metro Government. OL-3 Tax Form Instructions
12
Louisville Metro Government. Tax Calendar
13
Louisville Metro Government. Monthly Withholding Deposit Form W-1D
14
Louisville Metro Government. Form W-3 (Annual Reconciliation)
15
Louisville Metro Government. Occupational License Tax Regulations of the Louisville/Jefferson County Metro Revenue Commission
16
Louisville Metro Government. Form OL-3 Instructions Tax Year 2024
17
Louisville Metro Government. Contact the Louisville Metro Revenue Commission