Home » Airbnb delivers $700,000 to Kentucky in first six months of tax agreement

Airbnb delivers $700,000 to Kentucky in first six months of tax agreement

Temple-Airbnb-LogoFRANKFORT, Ky. (April 9, 2018) – Airbnb, the world’s leading community driven hospitality company, announced Monday that it collected and remitted over $700,000 in revenue to the Commonwealth of Kentucky in the first six months of its historic tax agreement.

In September 2017, Airbnb and the Kentucky Department of Revenue announced a tax agreement authorizing the company to collect and remit the state sales tax (6%) and the state transient room tax (1%) on behalf of its Kentucky hosts. That agreement took effect on October 1, 2017.

The September announcement noted that based on the state sales tax alone, if Airbnb bookings to Kentucky were to replicate that of the previous 12 months, it would mean $1 million in revenue to the commonwealth. The $700,000 remittance in just six months suggests the revenue is already far outpacing that projection.

While Airbnb has partnered with 370 local governments throughout the U.S. to collect and remit taxes — including neighboring states like Tennessee and Illinois — this marked the company’s first tax agreement within Kentucky. This agreement with Kentucky DOR solely covers taxes administered by the commonwealth.

Following the Commonwealth of Kentucky announcement, Airbnb and the City of Lexington announced an agreement authorizing Airbnb to collect and remit the 8.5 percent Lexington Room Tax, which took effect Feb. 1. And most recently, Airbnb and Louisville Metro announced an agreement authorizing Airbnb to collect and remit the 8.5 percent Louisville Transient Room Tax. That agreement took effect on April 1 — allowing collection to begin well prior to the Kentucky Derby.

Kentucky is currently experiencing dynamic home sharing growth. Airbnb recently announced that its Kentucky host community earned $19.2 million in supplemental income in 2017 while welcoming 166,000 guest arrivals.

In addition to the  significant source of tax revenue, home sharing delivers value throughout the commonwealth, including a $3.5 million impact for Louisville as hotels sold out for the 2017 Derby. Lexington hosts significantly expanded lodging capacity and offered affordable homes for parents during UK’s college commencement. And more rural areas of the state saw a massive influx during the August eclipse.

What follows is a city by city overview of the top 20 home sharing markets in Kentucky from 2017:

City

Total 2017 Guest Arrivals

Total 2017 Host Income

Louisville

78,080

$10 million

Lexington

27,630

$3.1 million

Covington

5,230

$489,000

Bowling Green

3,840

$391,000

Stanton

3,310

$370,000

Bardstown

2,620

$257,000

Paducah

2,600

$261,000

Berea

1,760

$117,000

Nicholasville

1,580

$185,000

Murray

1,470

$129,000

Williamstown

1,300

$98,000

Frankfort

1,250

$137,000

Newport

1,140

$123,000

Prospect

1,100

$150,000

Somerset

1,100

$118,000

Taylorsville

970

$134,000

Cadiz

960

$106,700

Bellevue

850

$73,000

Danville

850

$87,000

Leitchfield

800

$95,000