Introduction to the Kentucky City of Louisville Return
The Kentucky City of Louisville Occupational License Tax Return is prepared for calendar, fiscal and short-year corporations. Entries from the federal tax return and the Louisville worksheets are used to prepare:
Form OL-3E - Extension Request and/or Estimated Payment
Form OL-D - Quarterly Net Profits Deposit Form
Form OL-3 - Occupational License Fee Return
A copy of the federal return and statements are attached to Form OL-3.
Federal Worksheet Notes and Features
State Common Data for General Information
Presence of data on SDF input forms is not necessary to create the Louisville return. Louisville, or multiple states and cities, can be created in a return by checking them on the list of states and cities in Common State > State/City Generation.
Input that is located in federal Common State > State/City Common Data > General Information is as follows:
Louisville tax account number is entered into Account/file number
Name changed - override is entered into Name and/or address change - override, option 2 or 3
If final return is entered into Final return - override, option 1
Principal business activity - override is entered into Principal business activity - override
Telephone number (including area code) - override is entered into Telephone number - override
Year(s) which federal authorities changed net income is entered into Audit years finalized with IRS
If a consolidated return was filed is entered into Member of consolidated/combined or affiliated group or Consolidated/combined return - override
Depreciation
Depreciation differences are not computed on the Louisville return. Federal depreciation and Louisville depreciation are the same. Depreciation adjustments can be made on the Adjustment area of Louisville's Income/Deductions section under Kentucky Cities.
FS Codes
The Louisville return computes adjusted net profit from the federal return and Louisville's input. No FS codes are required to prepare Form OL-S.
Federal Sources
Generally, information specifically for the Louisville return is handled through entries on Louisville's input forms. The following items carry from the federal return to Form OL-S without requiring additional entries on the city interview forms:
Federal taxable income
Federal net operating loss deduction
Interest from U.S. obligations
State taxes based on income
State tax refunds based on income
Jobs Credit Wage Reduction
Gross receipts - Total Everywhere
Total compensation of employees - Total Everywhere
U.S. Obligations
The interest and dividends from U.S. obligations (entered in the federal input) carry to Form OL-3 as non-taxable income. To override the federal amount, use the "Interest earned on U.S. obligations - override" field in the Subtractions area of Louisville's Income/Deduction section.
Municipal Bond Interest
Form OL-S does not include municipal bond interest or other tax-exempt income from any source in the occupational license tax computation.
Tax Accrual
City taxes carry to the federal return when a "State and City Tax Accrual Option" is selected. Taxes computed on the Louisville return carry to the federal return if Deduct on Federal, Adjust Balance Sheet, is entered in the "State and City Tax Accrual Option" field in the "Calculation Options" section. The tax also accrues to the appropriate sections of the federal balance sheet.
City Tax Accrual Option Deduct on Federal, Adjust Schedule M-1, carries state taxes computed on the Louisville return to the federal return but does not accrue them to the federal balance sheet. An Schedule M-1 book/tax adjustment is made to the federal return.
City Tax Accrual Option Tax to Rental, Adjust Balance Sheet, accrues taxes to the balance sheet, but tax expense carries to the rental schedule instead of the federal return.
City Tax Accrual Option Tax to Rental, Adjust Schedule M-1, does NOT accrue taxes to the balance sheet, but tax expense carries to the rental schedule instead of the federal return.
If a city accrual option is not selected, or the Louisville override is not used, then no state income taxes or occupational license fees deducted on the federal return carry to Form OL-S, Schedule N, line 9.
Extension Form OL-3E
The application for an extension may be generated through federal State Extension section, under the Extension worksheet, in the Other category. Override the net or gross extension estimate payment in the "Tentative Tax - Override" field with overpayment and payments in the appropriate fields. Enter the account number in the "ID Number" field.
Additional overrides and other information input are provided for Form OL-3E on Louisville's Extension section.