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Kentucky · How-To Guide

How do I get a business license?

Kentucky Secretary of State (entity formation) / Kentucky Department of Revenue (business tax registration) / City/County for local licenses
Step by Step

How to do it

  1. Determine your business structure: sole proprietor, LLC, corporation, partnership
  2. Register your business entity with the Kentucky Secretary of State (for LLCs and corporations) - file online at sos.ky.gov/bus; Kentucky uses the KYBOSS (Kentucky Business One Stop Shop) portal
  3. Obtain an EIN (Employer Identification Number) from the IRS at irs.gov if forming an entity, hiring employees, or operating as a partnership
  4. Register with the Kentucky Department of Revenue for applicable taxes through KYBOSS - register for:
  5. - Sales and Use Tax (if selling taxable goods/services)
  6. - Withholding Tax (if you have employees)
  7. - Other applicable tax types
  8. - Free to register; apply at revenue.ky.gov or KYBOSS
  9. Kentucky has a state Occupational License requirement for certain business types - check with Kentucky DOR and local occupational tax offices
  10. Most Kentucky cities AND counties levy occupational/license taxes on businesses operating within their boundaries - one of Kentucky's most important local tax considerations; most cities and counties in Kentucky have their own Occupational License Fee based on gross receipts or net income from business activity within the jurisdiction
  11. Check for industry-specific state licenses through the relevant Kentucky licensing boards (contact Kentucky Governor's Office for Economic Development or sos.ky.gov for licensing information)
  12. Renew entity annual report with Secretary of State; renew local licenses per local schedule
Details

What you need to know

Required Docs
  • Business name and type of activity
  • Kentucky business address
  • Entity formation documents if LLC or corporation
  • EIN or Social Security number
  • Industry-specific certifications if applicable
Fee
LLC formation: $40 online (one of lowest nationally); corporation: $40 online; annual report: $15 (LLC and corporation - also one of lowest nationally); local occupational license: varies widely by city and county (typically $50-$500+ based on gross receipts, number of employees, or flat fee) RENEWAL: Entity annual report due June 30 each year; local occupational license: annual ONLINE OPTION: Yes - KYBOSS at onestop.ky.gov (integrated portal for entity formation, tax registration, and more); sos.ky.gov/bus (Secretary of State filings) WHERE TO GO: Kentucky Secretary of State (entity formation at sos.ky.gov); KYBOSS (onestop.ky.gov) for integrated setup; City/County Finance Office (occupational license); relevant licensing board (professional licenses)
Online Option
Yes - KYBOSS at onestop.ky.gov (integrated portal for entity formation, tax registration, and more); sos.ky.gov/bus (Secretary of State filings)
Where to Go
Kentucky Secretary of State (entity formation at sos.ky.gov); KYBOSS (onestop.ky.gov) for integrated setup; City/County Finance Office (occupational license); relevant licensing board (professional licenses)
County-specific variations apply

Kentucky is one of very few states where most cities AND counties impose separate occupational license fees on gross receipts or wages paid within the jurisdiction. This means a business operating in, say, Louisville (Jefferson County) must pay both the Louisville Metro occupational tax AND a state-level compliance. In smaller jurisdictions, county occupational taxes may apply even for rural unincorporated areas. Kentucky has 400+ taxing jurisdictions for occupational taxes. Verify which jurisdictions apply to your business location - city and county may both apply.

Kentucky Notes

Important state-specific details

  • Kentucky LLC formation: $40 - one of the lowest fees in the US.
  • Annual report fee: $15 - also among the lowest nationally; due June 30.
  • KENTUCKY OCCUPATIONAL LICENSE FEE SYSTEM: Kentucky's most complex business tax feature - virtually every Kentucky city and county imposes its own occupational license fee on wages/profits within their jurisdiction (separate from state income tax); this is especially important for employers tracking multiple locations.
  • Kentucky sales tax: state rate 6%; no local sales taxes (simpler than many states); extensive list of services also subject to sales tax.
  • Kentucky KYBOSS (onestop.ky.gov): excellent integrated one-stop portal.
  • Kentucky has a flat state income tax (4.5% for both individuals and corporations as of 2023 reductions).
Official Source

State office contact

State Office
Kentucky Secretary of State, Business Services - sos.ky.gov/bus | (502) 564-3490; Kentucky DOR - revenue.ky.gov | (502) 564-4581; KYBOSS - onestop.ky.gov