Law would put responsibility of room tax on booking agents 

The Danville-Boyle County Convention and Visitors Bureau wants area Airbnb hosts and other in-home lodging venues to thrive; it also wants these businesses to pay their transient room taxes.

Jennifer Kirchner, executive director of the CVB, said she, along with other members of the Kentucky Travel Industry Association, are urging their state representatives to support HB 383, which moves the responsibility of collecting and remitting the required transient room taxes off of private Kentucky homeowners who rent their properties and onto online booking agents such as Airbnb and other large out-of-state corporations.

State Rep. Diane St. Onge (R-Fort Wright) introduced the legislation.

The transient room tax is the primary source of money for Kentucky’s convention and visitors bureaus and tourism commissions.

Currently, all property owners who book their rooms through Airbnb, as well as other online digital platforms such as Home Away and VBRO, are required to collect and remit transient room taxes on every rental transaction monthly.

Standard hotel and motel corporations have been doing this for a long time and are experienced with tax laws, Kirchner said.

However, with the rapidly increasing number privately-owned, short-term rental options for travelers, the property owners “don’t have any experience of what the taxes are … and there’s a lot to learn,” Kirchner said.

In an email Kirchner sent to Rep. Daniel Elliott (R-Danville), she explained that in Boyle County, there are 17 of these short-term rental properties, but only five of them pay the required local 3-percent transient room tax.

“There are many reasons why this occurs. Some are unaware of the tax, some don’t care to pay it and others would pay but are confused about what tax to pay who and when. The burden solely rests with the property owner,” Kirchner wrote. “This bill sets out to change that and makes this process much easier on the small business owner.”

What makes paying the tax even more confusing, Kirchner wrote, is that the booking agent, such as Airbnb, does collect and pay the 1-percent state tourism tax, but not the local 3-percent transient room tax.

“We want to encourage the Airbnb market because we think it offers something for the traveler that isn’t otherwise offered. You get authentic, unique experiences,” in the downtown Danville area and in rural Boyle County, Kirchner said.

“We want them to thrive, but we need them to pay the transient room tax too.”

Kirchner said the CVB sends out extensive information packets to all property owners who begin renting a room in their home or an entire house. The packets contain all of the state regulations, a local mission statement, local ordinances and the forms to remit their 3-percent transient room tax. 

“It’s everything they need for the nuts and bolts.”

Kirchner said when short-term rental property owners don’t pay their taxes, it’s unfair to the hotels in the area, who are competing in the market and do pay their taxes.

“Whether it’s $10 somebody owes us or $10,000, the law is the law and should be treated as such,” she said.

Kirchner said she will be meeting with Elliott soon and she’s optimistic that the bill could emerge from the state House’s Small Business & Information Technology Committee early next week.