FRANKFORT, Ky. — Airbnb, the world’s leading community-driven hospitality company, announced Tuesday that it has remitted over $2.1 million in home sharing tax revenue on behalf of its Kentucky hosts in the first year of its tax agreement with the state, greatly exceeding initial projections.
In September 2017, Airbnb and the Kentucky Department of Revenue announced a historic tax agreement, allowing the home sharing platform to automatically collect the 6 percent state sales tax and the 1 percent state transient room tax on behalf of its host community and remit the revenue directly to the commonwealth. That agreement took effect October 1, 2017, infusing a new revenue stream for the commonwealth to fully capitalize on more people visiting Kentucky and staying longer through home sharing.
At the time of the 2017 partnership, Airbnb and DOR noted that “If host income in the coming 12 months were to replicate that of the last 12 months, Airbnb would remit $1 million in tax revenue to Kentucky through this agreement.” The $2.1 million in revenue more than doubled those projections.
“The Kentucky Department of Revenue is happy to be working with Airbnb on the collection and remittance of the sales taxes due the Commonwealth,” said Daniel P. Bork, commissioner of the Kentucky Department of Revenue. “We appreciate Airbnb’s efforts in support of its Kentucky hosts and look forward to year two of the agreement.”
Collecting and remitting hotel taxes can be complicated. The rules were designed for traditional hospitality providers and large hotel corporations with teams of lawyers and accountants. For this reason, Airbnb has partnered with over 400 local governments throughout the U.S. to collect and remit taxes, making the process easy for hosts to pay their fair share while contributing new revenue for local governments.
The September 2017 announcement represented Airbnb’s first tax agreement in Kentucky, and it started a trend. In the ensuing year, Airbnb has since announced additional tax partnerships with Lexington-Fayette County, Louisville-Jefferson County, and Woodford County to collect and remit their respective room taxes. Airbnb also collects taxes on a statewide basis in neighboring Tennessee, Arkansas, Missouri and Illinois.
The greater than expected tax remittance is largely due to continued growth among the local Airbnb community throughout the commonwealth. Throughout the duration of the tax agreement, over 224,000 Airbnb guests have experienced Kentucky, representing 94 percent year-over-year growth. The host community adds particular value to the commonwealth in more rural areas of Kentucky that lack hotels, in addition to expanding lodging capacity for larger metro areas when hotels sell out for large events — such as Louisville during the Kentucky Derby and Lexington during university events.