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Airbnb agrees to pay local room taxes in Kentucky

Airbnb, an online marketplace for property owners to rent their homes or spare rooms to guests on a short term basis, has agreed to take over the responsibility of collecting and paying local room taxes to agencies like the Danville-Boyle County Convention and Visitors Bureau.

Following months of discussions between representatives from the Kentucky Travel Industry Association and Airbnb, the company agreed last week to handle the taxes instead of relying on the property owners to collect and pay the tax, according to CVB Executive Director Jennifer Kirchner.

“That means that anybody in Boyle County on Airbnb … doing short term rental will have our local room tax automatically added and collected by Airbnb and paid directly to our CVB,” Kirchner told CVB board members during its regular meeting this week.

This past winter, the Kentucky Travel Industry Association was trying to pass legislation using Boyle County’s CVB as a “case study for all of the trials and tribulations of trying to make this right,” Kirchner said. However, the bill to require Airbnb to pay the tax directly failed to pass, Kirchner said.

“But what ended up happening was Airbnb came to the table and said, ‘You know what? We know that these hosts should be paying transient room tax. They’re paying the state tax; let’s just have an agreement and just work this out,” Kirchner said.

The agreement to collect and pay the taxes for those property owners renting out their private homes and rooms doesn’t include any other online rental companies besides Airbnb. “But having them formally endorse the local transient room tax will bring in other places too,” Kirchner said.

“I’m beyond excited and optimistic and thrilled that we really played a part in making this right,” she said. “The room tax is the law … whether you’re paying us $5 or $5,000.”

The agreement for Airbnb to pay the taxes directly to CVB “is far from perfect, but it’s a lot better than where we were, where I’m just trying to appeal to everybody’s better senses to pay,” Kirchner said.

In August, the CVB filed a lawsuit in Boyle Circuit Court against the owners of three lodging properties listed on Airbnb, stating the defendants had failed and or refused to pay the transient room tax and the 6-percent penalty imposed monthly on their delinquent account.

“We tried for years and had no other alternative at this point,” CVB Executive Director Jennifer Kirchner said of the lawsuit at the time.

Kirchner said getting a handle on all of the new properties that should be paying the transient room tax “has been a huge undertaking for us.”

“We send certified mail packets to all new properties we see,” Kirchner said, but many property owners still don’t realize they need to collect and pay the room tax.

The CVB is a powerful marketing engine for Boyle County, Kirchner said, “so it’s in their best interest to be in good standing with the CVB.”