The Boone County occupational tax is a 0.8% levy on wages earned and net profits generated within Boone County, Kentucky. For 2026, it applies to the first $79,494 of gross compensation per employee and the first $79,494 of apportioned net profit per business, capping the maximum payment at $635.95 in either category. Employers withhold the wage portion from paychecks and remit quarterly; businesses calculate and pay the net profit portion annually.
Who Owes the Tax
Under Boone County Ordinance 07-27, anyone earning wages in the county and any business entity generating income there is subject to the tax, whether or not they live in Kentucky.1Boone County Fiscal Court. Tax Rates for 2026 If you work in Boone County, you owe the wage tax on that compensation regardless of your home address.
Employers carry the primary duty. If you have employees working in Boone County, you must withhold the tax from their pay and remit it each quarter. When an employer doesn’t withhold, or isn’t required to, the employee must file and pay quarterly on their own.2American Legal Publishing. Boone County Code 110.29 – Employers to Withhold
Corporations, S-corporations, partnerships, and sole proprietors all owe the separate net profit tax on income from their Boone County operations. A business with employees in the county faces both obligations: withholding on wages and net profit tax on earnings.
Exemptions
Section 110.27(E) of the Boone County Code exempts several categories from the tax, including Kentucky-organized banks and financial institutions, public service corporations already paying an ad valorem tax on their public service activities, Kentucky-incorporated insurance companies, National Guard pay for training duty, and compensation to precinct election workers. Alcoholic beverage manufacturers and sellers may exclude net profits from those licensed activities but still have to file a return.3American Legal Publishing. Boone County Code 110.27 – Occupational License Tax Payment Required
The Rate, Wage Cap, and Maximum Payment
The rate is 0.8% for both the payroll withholding and the net profit tax. The wage cap adjusts each year: it was $77,400 for 2025 and rises to $79,494 for 2026, which puts the maximum any single employee will pay at $635.95.1Boone County Fiscal Court. Tax Rates for 2026
One rule surprises people: the tax is calculated on gross compensation, with no pretax deductions allowed. Contributions to a 401(k), health insurance premiums, and similar salary reductions do not reduce the taxable amount. The county taxes your full gross pay.1Boone County Fiscal Court. Tax Rates for 2026
For business net profits, the same 0.8% rate and $79,494 cap apply, so the maximum net profit tax is also $635.95 per entity for 2026. The Boone County wage base is set locally and doesn’t track the federal Social Security wage base ($184,500 for 2026).
The Business Certificate
Before operating in Boone County, you need a general business certificate. The initial fee is $25, renewable annually at the same cost. Every physical location needs its own certificate, posted where the public can see it. Businesses without a physical location must carry the certificate and produce it on request.4American Legal Publishing. Boone County Code 110.02 – General Business Certificate Required
The county will not renew your certificate if you have outstanding taxes or fees. Unpaid occupational tax can block renewal, and operating without a valid certificate puts you in violation of the ordinance.4American Legal Publishing. Boone County Code 110.02 – General Business Certificate Required
Apportionment When You Operate in More Than One District
If your business operates both inside and outside Boone County, you don’t owe tax on all your net profits. You apportion income using a two-factor formula: the payroll factor (Boone County compensation divided by total compensation) and the sales factor (Boone County sales divided by total sales). Average the two fractions and multiply by net profit to find the taxable portion. Businesses with multi-district sales but no multi-district payroll use only the sales factor.5American Legal Publishing. Boone County Code 110.28 – Apportionment
If the standard formula doesn’t fairly reflect your actual activity in the county, you can petition to use an alternative method such as separate accounting. The county can also require a different method on its own initiative.5American Legal Publishing. Boone County Code 110.28 – Apportionment
Filing Deadlines
Quarterly Payroll Returns
Employers file a quarterly withholding return and remit the tax by the end of the month following each quarter’s close: April 30, July 31, October 31, and January 31. Employees who have to file on their own use the same schedule, covering periods ending March 31, June 30, September 30, and December 31. The county accepts estimated payments at any time during the year.2American Legal Publishing. Boone County Code 110.29 – Employers to Withhold
Annual Net Profit Return
Calendar-year businesses file the net profit return by April 15.6Boone County. Occupational Licensing Fiscal-year businesses file by the 15th day of the fourth month after their fiscal year ends. Extension forms are on the county’s forms portal.
Where to File
You can file by mail to Boone County Taxes, Boone County Fiscal Court, PO Box 835, Burlington, KY 41005-0835, or electronically at boonecounty.munirevs.com. All forms, including quarterly withholding, net profit, amended returns, and estimated payment vouchers, are on the county’s tax forms page.7Boone County. Tax Forms
Penalties and Interest
Missing a deadline gets expensive fast. Boone County charges a penalty of 5% per month on unpaid tax, up to 25%, with a minimum penalty of $25 even on small balances. Interest accrues separately at 1% per month, or 12% annually. Both apply to the payroll tax and the net profit tax, and they run independently, so a return several months late accumulates both. Filing on time but paying late still triggers the penalty.
Watch the Other Taxes on the Same Form
The quarterly withholding return collects more than the occupational tax. The same form reports the Boone County Board of Education tax and the Boone County Mental Health tax (Ordinance 07-26), each with its own rate. The 0.8% rate above is specifically the Boone County occupational license tax under Ordinance 07-27; don’t apply it to the other line items on the return.