Offering Your Home to Visitors
Thinking about offering your home, or a room in your home, on AirBnB, VRBO or other similar services? There are a few things you need to know to make sure you are in compliance with state and local laws. We've compiled some resources for you.
AirBnB recently entered into an agreement with the city of Lexington and the state of Kentucky that affects room rentals. Please review your contract and correspondence with AirBnB.
Here's a Short Term Rental Guide for anyone who wants to open a short-term rental business in Fayette County. It will help you understand all the license, tax and zoning ordinances and regulations that go hand-in-hand with offering a short-term rental:
You'll also want to contact the Kentucky Small Business Development Center to learn how to start a small business in Kentucky. Among other things, you will need to:
- register with the Kentucky One-Stop Business Portal
- secure a zoning license/certificate of occupancy from the local zoning department
- obtain a federal employer identification number (EIN) from the IRS
- register with the Kentucky Revenue Cabinet as required for Sales and Use Tax and for Transient Room Tax.
The local office (Bluegrass SBDC) can walk you through this process: (859) 257-7666.
Per Kentucky state statute and local ordinance, you will be required to pay sales tax and transient room tax.
Transient Room Tax Calculation Example
Room $100.00
4% Tax - VisitLEX $4.00
1% Tax - State of Kentucky $1.00
4.5% Tax - Lexington Center Corporation $4.50
Room Total $109.50
6% State Sales Tax $6.57
Total Room and Tax $116.07
