.png)
Kentucky has no statewide short-term rental license; cities such as Louisville and Lexington license short-term rentals locally. Stays owe 6% state sales tax plus a 1% state transient room tax and local room taxes.
Short-term rentals (STRs) are generally legal in Kentucky, but the regulations and requirements can vary significantly depending on the specific location within the state.
In Kentucky, there isn't a standardized statewide definition for short-term rentals (STRs). Instead, regulations and definitions vary across different cities and counties. For example, in Louisville and Lexington, short-term rentals are generally defined as properties rented for less than 30 consecutive days. This encompasses a variety of property types, including houses, condos, apartments, and even houseboats or RVs.
Kentucky does not have a statewide registration or licensing requirement for short-term rentals. However, the regulations governing short-term rentals can vary significantly depending on the location within the state. Different cities and counties in Kentucky have their own sets of rules and requirements that hosts need to comply with.
For instance, some local jurisdictions may require hosts to obtain business permits or licenses to operate legally. The criteria and fees for these permits and licenses can vary based on the area. These local licensing procedures often involve submitting property details, emergency contacts, paying permit or license fees, providing floor plans, maps, photos, attesting that safety standards will be met, scheduling housing inspections, and furnishing proof of adequate insurance. Licenses typically require renewal every one to two years.
In several popular tourist locales, including Louisville and Lexington, short-term rentals are generally defined as accommodations rented out for less than 30 consecutive days. These regulations are part of the local ordinances set by individual cities within the state.
In Kentucky, the statewide tax requirements for short-term rentals include several components. As of 2023, Airbnb and VRBO, two major short-term rental platforms, are responsible for collecting and remitting a 1% statewide transient room tax for all their participating Kentucky hosts. This tax is applicable to the total charges for rentals, including service fees.
Additionally, this transient room tax is in addition to the standard 6% sales tax that is also applicable to short-term rentals. It's important to note that the 1% transient room tax applies to stays at various types of accommodations, including hotels, motels, inns, campgrounds, and recreational vehicle parks.
For those operating short-term rentals not exclusively through Airbnb or VRBO, or for additional local taxes, property owners are responsible for the tax collection and remittance. For example, in the City of Frankfort and Franklin County, short-term rental property owners must also collect and remit a 4% City of Frankfort Transient Room Tax, a 3% Franklin County Transient Room Tax, and a 2% Fine Arts Tax, in addition to the state taxes.
Lodge Compliance is not a licensed tax or financial advisor. Therefore nothing in the above article should be construed as tax, legal, or financial advice. Contact your local tax office for information regarding your personal circumstance.
.png){kind=logo}
