FRANKFORT, Ky. ( Sept. 15, 2017) – Airbnb, the world’s leading community driven hospitality company, announced today a historic tax agreement with the Commonwealth of Kentucky that will allow the company to collect and remit state taxes on behalf of its Kentucky hosts.
With the tax agreement in place, the commonwealth will be able to fully capitalize on more people visiting Kentucky and staying longer through home sharing. Effective Oct. 1, Airbnb will automatically collect and remit the state sales tax (6%) and the state transient room tax (1%) to the Kentucky Department of Revenue on all Airbnb bookings, making the process seamless and easy for both hosts and the commonwealth.
If host income in the coming 12 months were to replicate that of the last 12 months, Airbnb would deliver $1 million in tax revenue to Kentucky through this agreement.
“We are extremely pleased to announce this agreement with Airbnb,” said Department of Revenue Commissioner Dan Bork. “Our goal is to work with all taxpayers fairly and equitably to ensure the appropriate taxes are paid and this agreement achieves that. Kentucky’s tourism sector is a huge economic driver for the state, so it is important to collect revenues for enhancing the quality of life for Kentuckians and our visitors.”
While Airbnb has partnered with hundreds of governments throughout the world to collect and remit taxes, this marks the company’s first tax agreement within Kentucky. This agreement with Kentucky DOR covers taxes assessed by the commonwealth, meaning collecting and remitting local municipal lodging/occupancy taxes would require separate agreements with the cities.
Airbnb is currently engaged in proactive and productive discussions with Louisville and Lexington — the two largest home sharing markets in Kentucky — and the company is hopeful to secure agreements and begin collecting and remitting local taxes for both cities.
“Home sharing is introducing a whole new world of travelers to the authenticity of Kentucky while offering new economic opportunities for thousands of Kentucky residents,” said Laura Spanjian, Kentucky policy director for Airbnb. “We are so proud to have collaborated on this agreement. We believe this can serve as a model for other states, and we are dedicated to finalizing additional agreements to collect and remit taxes with Kentucky municipalities.”
The agreement comes at a time of dynamic home sharing growth within Kentucky. In 2016, Airbnb’s Kentucky host community earned $10.2 million in supplemental income while welcoming approximately 80,000 guests to the commonwealth.
Overview of Airbnb in Kentucky:
- 3,100 active hosts
- 80,000 guest arrivals to Kentucky via Airbnb in 2016
- Kentucky hosts earned $10.2 million combined in supplemental income in 2016 through
- Airbnb
- Typical Kentucky host earns $4,500 in supplemental income annually through Airbnb
Top 10 home sharing cities in Kentucky in 2016:
|
City |
Total 2016 Guest Arrivals |
Total 2016 Host Income |
|
Louisville |
43,000 |
$6.2 Million |
|
Lexington |
15,000 |
$1.8 Million |
|
Bowling Green |
1,800 |
$174,000 |
|
Bardstown |
1,700 |
$152,000 |
|
Covington |
1,600 |
$168,000 |
|
Stanton |
1,400 |
$155,000 |
|
Nicholasville |
950 |
$95,000 |
|
Berea |
850 |
$59,000 |
|
Paducah |
850 |
$98,000 |
|
Somerset |
540 |
$42,000 |
About Airbnb
Founded in 2008, Airbnb’s mission is to create a world where people can belong when they travel by being connected
to local cultures and having unique travel experiences. Its community marketplace provides access to millions of unique accommodations from apartments and villas to castles and treehouses in more than 50,000 cities and 191 countries.
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