Are Homeowners Associations required to file an Occupational License Tax Return (Form OL-3)?
If a Homeowner’s Association reports taxable income on their federal tax return (Form 1120-H) for any tax period, a Form OL-3 must be timely filed and occupational license fees must be timely paid for that tax period. A Homeowner’s Association is exempt from occupational license fees only if it is properly organized as a non-profit corporation under Kentucky state law, adopts bylaws fairly setting forth the right, powers, and privileges of homeowners, makes a timely election under Section 528 of the Internal Revenue Code, and annually submits a copy of the federal tax return (Form 1120-H) reporting no taxable income. A copy of the Homeowner’s Associations’ federal tax return (Form 1120-H) must be submitted to the Louisville Metro Revenue Commission annually, with no taxable income reported, to prove the tax-exemption for that tax period.
