Airbnb and City of Louisville Reach Tax Collection Agreement

Airbnb and City of Louisville Reach Tax Collection Agreement

A press release was sent out by the City of Louisville this morning announcing they have reached an agreement with Airbnb to collect and remit the 8.5% hospitality/bed tax on every guest reservation made through Airbnb. Under Airbnb’s current agreement with the state, taxes are added to reservations at checkout and paid by the guest. Airbnb remits to the State on the host’s behalf. 
 
The agreement with the City is expected to go into effect April 1st. Additional details will be made available as they are known. It is advised that everyone continue with current tax collection and remittance practice until further notified. And remember, this applies only to Airbnb reservations. No agreements are in place with other platforms (VRBO, Expedia, etc.) or direct placement guests. 
 
 
Here is the full release form the City of Louisville: 
 

Louisville Metro and Airbnb announced today the finalization of an agreement that will allow the company to collect and remit taxes on behalf of its hosts in Louisville and Jefferson County. Effective April 1, Airbnb will automatically collect and remit the Louisville Transient Room Tax (8.5%) for taxable bookings. The agreement allows Louisville to fully benefit from people visiting and staying longer through home sharing.

Collecting and remitting hotel taxes can be complicated, as the rules were designed for traditional hospitality providers and large hotel corporations with teams of lawyers and accountants.

That’s why Airbnb has begun partnering with governments throughout the world to collect and remit taxes, making the process seamless and easy for hosts to pay their fair share while contributing new revenue for local governments. These agreements are particularly impactful for a city like Louisville, where some homeowners may only be hosting visitors during a handful of large events such as the Kentucky Derby, and therefore are less likely to be aware of the applicable taxes associated with short-term rentals.

“I am delighted to see that the city has settled on an agreement with Airbnb. We have leisure and convention travelers requesting the option of an Airbnb. We have a growing number of Airbnb Hosts in Louisville – this will put them on the same playing field as our other accommodations in paying the transient room tax,” said Karen Williams, President & CEO of the Louisville Convention Bureau.

“We are always looking for opportunities to better serve taxpayers,” said Louisville Metro Revenue Commission Director Angela Dunn. “This agreement advances that goal by streamlining the local tax process for hosts.”

This marks Airbnb’s third tax agreement in Kentucky. In September 2017, the company announced a statewide tax agreement with the Kentucky Department of Revenue that authorized the company to collect and remit the state sales tax on all Kentucky Airbnb bookings (including in Louisville Metro). And earlier this year, Airbnb and Lexington announced an agreement authorizing Airbnb to collect and remit Lexington’s local room tax.

“We believe this agreement will unlock significant new revenue for Louisville Convention Bureau moving forward, and we’re so thrilled to have finalized it well prior to the Derby,” said Laura Spanjian, policy director for Airbnb. “With clear, fair rules to regulate home sharing and now a tax agreement to bring in new revenue, Louisville has emerged as a national model for how cities can capitalize from the sharing economy.”

The agreement comes at a time of dynamic home sharing growth in the Greater Louisville area. In 2017, Louisville-area Airbnb hosts earned $10 million in supplemental income while welcoming over 78,000 guest arrivals to the city.

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Louisville Short Term Rental Zoning Win

Louisville Short Term Rental Zoning Win

Short Term Rental Zoning

The Louisville Planning Commission awarded a major win for short term rental zoning in Louisville, KY today. In a unanimous vote of 7-0, the Planning Commission voted to recommend no changes or restrictions to current residential short term rental zoning requirements for non-owner occupied properties. This comes on the heels of a vote by Metro Council in December to not impose a moratorium on new non-owner occupied short-term rentals.

On 12/18/18 Metro Council tasked the Planning Commission with reviewing the current short-term rental zoning ordinance and making recommendations for changes or improvements. Public comment was gathered in August and September 2018, through the City’s website, and testimony was heard by the Planning Commission at two public meetings.

Today’s Vote

Today’s vote considered three options: Option 1 – Prohibit all non-owner occupied short-term rentals in residential zoning, Option 2 – Prohibit non-owner occupied short-term rentals in single-family residential zoning, Option 3 – continue to allow non-owner occupied short-term rentals in all residential zoning. Not being discussed tonight were owner-occupied properties and commercially zoned properties.

The second item for discussion was whether the Planning Commission should recommend limiting the total number of occupants in an STR to 10. This, too, was voted down siting occupancy limitations within the existing ordinance (two times the number of bedrooms plus 4), as well as the Board of Zoning Adjustments (BOZA) ability to restrict the number of occupants below the current standard based on the individual merits of a property. BOZA is the governing body who currently oversees the issuance of all conditional use permits (CUPs) for non-owner occupied STRs.

Additional Short Term Rental Zoning Recommendations

Additional regulations for STRs that were created by the Planning Commission, and recommended to Metro Council for consideration are:

  • An increase in the annual registration fee for all STRs from $25 to $100
  • Display a copy of the registration on the property in a visible location.
  • Contact information for the property owner and Management Company or host be sent by certified mail to tier 1 neighbors.
  • A requirement for the inspection of the property by the Fire Marshall or a licensed home inspector.

In addition to these recommendations, the Planning Commission unanimously passed a motion suggesting Metro Council consider a funding source for the operational expenses associated with enforcing current STR laws. Both side of the topic fully agree that the primary issue is enforcement of existing laws and adding additional legislation is not the solution.

Tonight was the second public meeting where additional public testimony was heard and the Zoning Commission was prepared to make a vote.

The first public meeting was held in early December where the audience was heavily in support of short-term rentals and opposed to any zoning restrictions. The Planning Commission requested a continuance following that hearing in order to further explore the topic and related law so an informed decision could be made. Tonight’s second public meeting was held in a moderately filled auditorium in the Old Jail Building. Twenty-three people spoke – twenty were in favor of short-term rentals without any zoning restrictions, one party was neutral, and only two were opposed.

Next Steps

Tonight’s recommendations will be passed to Metro Council, where it will be handed to the subcommittee on zoning and annexation for review and further discussion. Following that one of three things will happen: 1) Nothing, 2) They will vote to pass the recommendations as-is to Metro Council for a full vote, or 3) They will recommend certain parts to Metro Council and/or add additional elements to the recommendation for a full vote.

Short-term rentals are properties that are rented out for a period of 29 days or less. In Louisville, they can be single family or duplex residences, some condominiums, and almost all commercially zoned property meeting certain location criteria. Neighborhood groups, primarily in the Highlands and Cherokee Triangle Areas, have voiced concern over the number of non-owner occupied short-term rental properties that have become available in a short period of time.

Jonathan Klunk, CEO of short-term rental management company Key Source Properties weighed in, “Tonight’s vote was an informed vote by a fair and knowledgeable group of people who want what’s best for this city. I applaud them for being able to see short-term rentals on their merits and how vital they have become to our city. Hearing from the individual, responsible hosts is an important ingredient to having a well-rounded view on the matter.  We hope the city will appropriate the necessary funds to enforce existing laws and create common sense ordinances for controlled growth of short-term rentals throughout the city.”

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Short Term Rental Moratorium

Short Term Rental Moratorium

 

Short Term Rental Moratorium

Many council members were in favor of the short term rental moratorium, as a way to give metro council time to see what recommendations will come from the Zoning Board next week in consideration of STR ordinance changes. Others were not in favor of the moratorium as it is taking away a mechanism for individual STR operators to become complaint with the laws and the timing being abrupt to many who are currently in the permitting (CUP) process. Additionally, there was concern for the message a YES vote would send to zoning and to the community because it could be inferred that council was against STRs, which is not the case.

Nevertheless, a relentless group of 12 individuals remained in the council chambers until the vote was complete. They held signs showing their opposition to the moratorium and gently providing answers to questions bill supporters were unable to address. It was an emotional evening. The vote did not occurr until 1 AM, following a 2.5-hour debate.

Why is this important?

The most interesting events of the evening were when one of the three bill sponsors (David James, Council President, District 6 – Old Louisville) reversed his position and voted AGAINST the very bill he supported.

This vote is notable as this is the first time metro council has met to debate the STR topic since the ordinance was first passed 3 years ago by the same body. The zoning board is expected to vote on their suggested ordinance changes next week, and submit to metro council for review shortly after the first of the year.

For information on how to register your short-term rental property with Louisville Metro government, click here

Here were the vote total from Friday Morning: Vote

District Party Last name First Name STRs in District VOTE
1 D Green Jessica 0 YES
2 D Shanklin Barbara 0 No Vote
3 D Woolridge Mary 2 YES
4 D Sexton-Smith Barbara 24 YES
5 D Bryant* Cheri 1 NO
6 D James David 53 NO
7 R Leet* Angela 2 NO
8 D Coan Brandon 56 YES
9 D Hollander Bill 27 YES
10 D Milvihill Pat 17 YES
11 R Kramer Kevin 0 NO
12 D Blackwell Rick 0 YES
13 D Aubrey Welch* Vicki 0 YES
14 D Fowler Cindi 0 NO
15 D Butler* Marianne 9 YES
16 R Reed Scott 3 NO
17 R Stuckel* Glen 2 NO
18 R Parker Marilyn 0 NO
19 R Denton* Julie 1 NO
20 R Benson Stuart 0 NO
21 D Lanshima Vitalis 4 YES
22 R Engel Robin 0 NO
23 R Peden James 0 NO
24 D Flood Madonna 0 YES
25 D Yates David 1 No Vote
26 D Ackerson Brent 1 NO

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Louisville Short Term Rental Registration

Louisville Short Term Rental Registration

Registering your short-term rental property is a two (2) step process. 

 STEP 1 – Register Your Business with Metro Revenue Commission 

1) Register with the Louisville Metro Revenue Commission. This will provide you with a necessary identification number for filing. If you report self-employment tax in Louisville you may already have this number. You may call the Revenue Commission at (502) 574-4860 to obtain an existing number. 

Otherwise, follow these instructions to create a new number. 

  1. Go to: https://louisvilleky.gov/government/revenue-commission
  2. Select E-mints (new online tax portal)
  3. Select “register a new business”
  4. You will register as a single member sole proprietorship using your SSN
  5. The business start date is the date your CUP was approved or the date you plan to receive your first guest.
  6. Follow the prompts from there to complete. 

Once you have your Metro Revenue Commission number, you will need to complete the short-term rental registration process. It is best to print and complete the application, and mail it in with a check for $25. This will need to be completed annually. Louisville Metro may not send reminders, so please mark your calendar. 

 

STEP 2 – Register Your Short-Term Rental with the City 

To register with the city, please follow the link below:
https://louisvilleky.gov/government/planning-design/planning-and-design-applications

  • Scroll to “Miscellaneous”
  • Select “Short-term Rental Annual Registration Form”
  • Complete, sign, and mail with a check for $25

 

ONGOING – Monthly Reporting and Taxes

Once registered, you will need to complete a submit this form monthly

Instruction for completing TR1M-S can be found here

Taxes are collected and remitted by Airbnb, but the property owner is responsible is responsible for remitting taxes on all rentals under 30 days in length rented through a source other than Airbnb. Key Source Properties can complete this process for you monthly for $20 per month. 

More information about short-term rental reporting and financial responsibilities can be found here.

 

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Maintaining A 5 Star Short Term Rental Landscape

Maintaining A 5 Star Short Term Rental Landscape

Operating a short term rental property can be time consuming. Most operators maintain full time jobs, families, and other obligations outside of being amazing hosts and providing a 5 star experience to every guest that walks through the door. Maintaining a 5 star short term rental landscape is often one of the last items on an operator’s to-do list. Taking care of one’s own yard is a challenging enough, but keeping two yards garden tour-worthy becomes a project rather than a chore. Here are a few tips to help keep the curb appeal of your short term rental landscape beautiful for both guests and neighbors.

Five tips to improve your short term rental landscape

1) Clean Up. This sounds like an easy step, but it is often forgotten. Simply cleaning up the yard can have a profound impact on the overall look and feel of the house. Fallen branches, litter, and leaves congregating in the corners of the fence can lead to an unkept look. Spray weeds growing through cracks in the pavement or sidewalks with weed killer, and use a broom or leaf blower to quickly remove dust and debris from all hard surfaces and the exterior of the house. Taking a few minutes weekly to clean up can go a long way in your short term rental landscape.

2) Weeding. NOTHING grows faster than a weed. Hence the often-used phrase: “growing like a weed”. And weeds are one of the most unsightly and detracting elements of any short term rental landscape. The biggest problem with weeds is that they tend to show up overnight and seem like a never-ending battle to eradicate. Here are a few tips to help keep weeds to a minimum in your short term rental landscape

  • Weed Barriers – If you don’t want to spend all spring and summer dedicated to the tiring art of weed pulling you will have to put in some hard work and sweat equity early on to inhibit weed growth from the source. Applying a weed barrier throughout the landscape produces the best results. Be aware that a weed barrier product is not a set-it-and-forget-it fix all. The product will deteriorate over time, allowing weeds to grow through. Additionally, the mulch you put on top of the barrier will compost and turn to nutrient-rich topsoil, which is a great place for nice, healthy weeds to grow. Weed barriers are only one step in a multi-step system to keep weeds at bay
  • Weed Preventer – Another weapon in the arsenal against weeds is a proactive weed-preventing agent that can be applied to the landscape. Several products exist on the market, most recognizable of them being Preen. One application can last for up to three months. Apply in March, June, and September and reduce the time spent weeding the yard significantly. This step is cost effective ($14 for 800 sq. ft. of coverage) and requires little effort. One thing to note: remove all existing weeds from the landscape before applying a weed-preventing agent. They will not kill existing weeds, jut prevent new ones from growing.

3) Mulch The Landscape. If you enjoy the feeling of instant gratification, applying a fresh layer of mulch to the landscape is on of the best things you can do you’re your wellbeing and the curb appeal of your short-term rental. Many choose to apply mulch in early spring to get the yard off to a good start, but you can lay mulch anytime during the growing season. Mulch will tell guests that the property is well kept and that the owner cares. It also does double-duty to prevent weed growth and keeps moisture in the soil to help protect plants during periods of drought. Hardwood mulch comes in a variety of colors and can be purchased by the scoop or by the bag. Look for a good quality mulch to ensure it maintains its color all season.

Some homeowners prefer a more permanent solution and look with hardscape, such as river rock or pea-gravel. Although hardscapes do not provide the same soil protection as mulch, they help prevent weed growth and require less maintenance and reapplication. The initial cost of the hardscape option is higher than mulch, but the return on investment may be better.

Short term rental landscape hardscape

 

4) Keep it simple. One of the most important elements of a short-term rental landscape is to keep it beautiful but also low maintenance. This often comes with simplicity. When designing the landscape, look for shrub and tree species that are slow growing and native to the area. Slow growing is important to a simple landscape because they require less attention and pruning. Drought-tolerant grasses and perennials will help ensure your yard is green and in bloom throughout the summer without the need of watering. Thoughtful selection of the plant material will help reduce overall maintenance costs and improve the satisfaction of guests.

5) Hire A Professional. There is a reason you see so many landscape companies with clever names. A Cut Above and Best Buds Landscaping thrive because many people do not enjoy yard work, or do not have time to invest. Several landscape jobs are worth hiring out because the overall cost is palatable, the work is completed faster, and there is an elevated level of expertise. One job that is often hired out – routine cutting and edging. There is nothing like a freshly cut lawn with a professional edge. Guests recognize the detail when they first arrive at the property.

I recommend a weekly yard service between March and August, and a bi-weekly yard service in September and October. This recommendation is for USDA zones 6 and 7. Other areas may require more or less service. A weekly lawn service should cost between $35 and $55, depending on the size and complexity of the yard. If you value your time and sanity, consider investing in a consistent weekly lawn service to keep.

Please note: If you maintain your lawn and are not using a trimmer and blower EVERY time you cut the grass, you most likely do not have a 5 star lawn.

Maintaining an exquisite lawn for your guests does not have to be a daunting task. And simply ignoring the responsibility will lead to a diminished guest experience and less than 5 star reviews. Follow these very easy steps to achieve a beautiful lawn all spring and summer. Your neighbors will than you too!

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