Falmouth, Kentucky, Creates Payroll Tax Starting July 1

Falmouth, Kentucky, created an 1.5% occupational license tax on employee wages and compensation effective July 1, under an ordinance adopted May 7.

The tax applies to compensation earned for services performed in Falmouth on or after July 1, 2026, regardless of the employee or employer’s residence, under Ordinance 2026:1. The ordinance requires employers to withhold the tax from employees’ wages and remit it to the city clerk on a quarterly basis.

The ordinance also created a separate occupational license tax on business net profits and a graduated occupational license annual fee schedule based on a company’s prior year gross ...