Request By:
Louis DeFalaise
Adams, Brooking & Stepner
Attorneys and Counselors at Law
P.O. Box 861
421 Garrard Street
Covington, Kentucky 41012
Opinion
Opinion By: Robert F. Stephens, Attorney General; By William S. Riley, Assistant Attorney General
In your recent letter to the Attorney General it is stated that Boone and Kenton Counties have approximately 30 municipalities ranging from second to sixth class cities. Most of the cities have enacted an occupational licensing ordinance pursuant to KRS 91.260 (should be KRS 92.280) and the Kentucky Constitution Section 181. Most of the real estate salesmen are independent contractors and not considered employees. Four questions are asked as follows:
(1) If only one sale is made in a jurisdiction, is the realtor liable for the tax?
Answer: Generally speaking, no. The case of
City of Mayfield v. Reed, 278 Ky. 5, 127 S.W.2d 847 (1930), points out that a single isolated transaction under specific employment is not carrying on, conducting, or managing a business within a city's licensing ordinance. One sale would, generally speaking, not come within the ordinance.
(2) If a salesman posts a "for salec sign, but makes no sale, is he subject to the licensing tax?
Answer: Again the answer would be if this is a single isolated transaction or series of isolated transactions, the occupational ordinance should not apply.
(3) Who is subject to the tax, the real estate broker or each independent contractor/ salesman?
Answer: Each independent contractor/ salesman.
(4) If the broker is liable, is he liable only for one license, or must he procure a license for each salesman assigned to him?
Answer: See answer to question (3).
We are enclosing a copy of OAG 76-1 and 67-101 which may be of interest in connection with these questions.