Small bluegrass city main street of brick buildings with rolling green pastures and black plank fencing at the edge of town, Danville KY Business License

Danville KY Business License: City 1.75% Net Profit and 1.90% Wages Plus Boyle County 1.25%, Both Apply

Danville KY Business License: City 1.75% Net Profit and 1.90% Wages Plus Boyle County 1.25%, Both Apply

If you plan to run a business inside Danville, you deal with two local governments, not one. The City of Danville and Boyle County both license businesses on one annual form, both tax net profit, and the city also requires you to withhold payroll tax on wages for work performed inside city limits. Kentucky does not issue a general statewide business license. Your state obligations are a filing with the Secretary of State and a tax account with the Department of Revenue. Your local obligations come from the city and the county. This guide puts those steps in the order you should handle them.

This article is informational content, not legal or tax advice. Rates, forms, and deadlines can change, so confirm each one with the office named before you file. Consult a qualified CPA or business attorney if your situation is complex, such as multiple owners, multiple locations, or a business that operates both inside and outside the city.

What You Need Before You Start

  • An available business name. Search the Secretary of State's business search. An LLC name must contain limited liability company, limited company, LLC, or LC. If you abbreviate limited company, you must use LTD CO.
  • A Kentucky street address for your registered office. Kentucky does not accept a post office box.
  • A registered agent who meets Kentucky's rules: either a Kentucky resident whose business address matches the registered office, or an entity qualified to transact business in Kentucky with the same address.
  • Filing money set aside: $40 for Articles of Organization (LLC) or $50 for Articles of Incorporation (corporation), $25 for the one-time City of Danville registration, and $15 if you want to reserve a name for 120 days.
  • Your estimated annual net profit and a payroll plan, including how many employees you expect and where they will work.
  • Accounts on the Kentucky One Stop portal and MyTaxes.ky.gov, plus a federal Employer Identification Number (EIN) if you will have employees.

Step 1: Form Your Entity or Register Your Assumed Name

Most owners form an LLC or corporation first. New formations are filed through the Kentucky One Stop Business Portal. An LLC files Articles of Organization (Form KLC) for $40. A corporation files Articles of Incorporation (Form PAI) for $50. Online filings take effect on the date and time you submit them. Processing is usually the same day but can take up to three business days. Kentucky publishes no expedited tier, so online filing is the fastest route.

If you will operate under a name other than your legal name, file a Certificate of Assumed Name (Form ASN) for $20. Entities file with the Secretary of State. Sole proprietors file with the county clerk of the county where they reside, under KRS 365.015(3). Registration lasts five years and is renewable.

Your registered agent must deliver a written statement of acceptance to the Secretary of State unless the agent signs the formation document. Changing the registered agent or office later costs $10.

Step 2: Register Your Tax Account With the State

Register with the Department of Revenue using Form 10A100 through MyTaxes.ky.gov. Kentucky has no franchise tax, but LLCs and corporations owe the Limited Liability Entity Tax (LLET). The minimum is $175 when Kentucky gross receipts or gross profits are $3 million or less. Corporations also pay a 5% flat corporate income tax. Income from an LLC passes through to its members, who pay the 3.5% flat individual rate for 2026.

If you sell taxable goods or services, you need a sales tax permit. The state rate is 6%, and Kentucky has no local sales taxes. The tax reaches about 50 services, so check whether what you sell is covered. Apply through the Department of Revenue business registration page.

Step 3: Register With the City of Danville

Go to the Finance Department at City Hall, 445 W. Main St., to pay the one-time $25 city registration fee. Pay before your first day of business. If you start operating before you pay, a $25 penalty applies. Ask the Finance Department whether any other city forms apply to your business type or location.

Step 4: File the Boyle County Annual License Form

Danville and Boyle County both license a business on one annual form. Contact the Boyle County Tax Administrator at 321 West Main St., Room 117, 859-238-1115, or [email protected]. Ask the office to confirm which sections apply to your entity, your location, and your industry. Filing with the city does not automatically complete your county obligations.

Step 5: Understand the Net Profit Tax

The City of Danville levies 1.75% on net profit, in effect since October 1, 2017. Boyle County levies 1.25% on net profit, in effect since 2020. Each rate is computed on its own line of the Form NP return, so the two rates stack. They are not a single combined rate.

Example: an LLC with $200,000 in net profit that is subject to both taxes, with no credits and no adjustments, would owe $3,500 to the city and $2,500 to the county, or $6,000 in total. Deductions and allocation rules may change the actual base, so confirm the calculation with both offices.

Do not assume a credit cancels the city tax. Whether either jurisdiction credits tax paid to the other depends on KRS 68.197, and that is decided place by place. Ask both offices in writing how it applies to your situation.

You may see Danville listed at 1.25% in the state's local tax directory. That figure is the county rate, not the city rate. Do not use it to calculate the city tax.

Step 6: Withhold Payroll Tax

If you have employees who work inside city limits, withhold 1.90%. For work in the county, withhold 1.25%. Quarterly returns are due by the end of the month after each quarter ends. For the quarter ending March 31, that means April 30.

Example: $100,000 in wages for work performed inside city limits would produce $1,900 in city withholding, before any exemptions or adjustments. If an employee works in both places, ask the Tax Administrator and the Finance Department how to split those wages before you run payroll.

Step 7: Check Contractor License Rules

The Boyle County FAQ (2021) lists a $50 annual contractor's license fee for contractors working in the city or county. Check with the Boyle County building inspector to confirm the current fee and whether it applies to your trade. Kentucky has no statewide general contractor license, so the local requirement matters. Electricians, plumbers, and HVAC contractors also need state licensing through the Department of Housing, Buildings and Construction.

Step 8: Build a Compliance Calendar

  • Each January 1: the Secretary of State annual report window opens.
  • June 30: the $15 annual report is due. Domestic entities that miss June 30 are administratively dissolved.
  • Each quarter: file payroll withholding returns by the end of the month after the quarter ends.
  • Each year: file the Boyle County annual license form. Confirm its due date with the Tax Administrator.

Late local returns carry a $25 minimum or 5% per month, up to 25%, plus 12% interest. Late filings are the most expensive mistake in this process, so set reminders early.

Tips and Common Mistakes to Avoid

  • Assuming the county rate is the city rate. The city rate is 1.75% on net profit and 1.90% on payroll withholding. The county rate is 1.25% on both.
  • Filing with only one office. Danville and Boyle County each have their own obligations, even though the annual license uses one form.
  • Starting operations before paying the $25 city fee. The penalty is small, but it is avoidable.
  • Using a post office box as the registered office. Kentucky requires a street address.
  • Missing the June 30 annual report. The $15 fee is small, but a missed deadline can lead to administrative dissolution.
  • Relying on a credit without confirmation. KRS 68.197 credits are decided place by place.
  • Skipping the contractor check. If you do contracting work, confirm the $50 fee and any trade license with the building inspector.

What to Expect

Many owners can complete the state formation filing within a few business days, since online filings are usually processed the same day received and may take up to three business days. Local steps depend on each office's schedule, so build in extra time before your planned opening date. If you file each item on time and pay the local amounts on the correct lines, you may avoid late penalties. These are general expectations, not guarantees, and actual results depend on your business and the offices' determinations.

Official Resources

Confirm every rate, form, and deadline with the agency named before you file. This article is informational and does not replace advice from a qualified CPA or attorney.

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