Short-Term Rental Tax in Kentucky (KY)
The state-level tax rate on short-term rentals in Kentucky is 7.0% , consisting of 6.0% sales tax and 1.0% lodging tax. Kentucky applies general sales and lodging taxes to STRs without STR-specific legislation. Major platforms like Airbnb collect state taxes automatically. With local taxes, the total rate in Louisville reaches 13.5%. STR operators must register with the state. Kentucky charges a 6% state sales tax and a 1% state transient room tax on short-term rentals. Cities may impose their own transient room taxes of 3-6%.
Annual Tax Estimate for Kentucky
The table below shows estimated annual tax obligations at different nightly rates, assuming 65% occupancy (237 nights/year). Estimates are shown for both the state-level rate and the highest local rate (Louisville).
| Nightly Rate | Gross Revenue | State Tax (7.0%) | Louisville Tax (13.5%) |
|---|---|---|---|
| $100.00/night | $23,700 | $1,659 | $3,200 |
| $150.00/night | $35,550 | $2,489 | $4,799 |
| $200.00/night | $47,400 | $3,318 | $6,399 |
| $300.00/night | $71,100 | $4,977 | $9,599 |
| $500.00/night | $118,500 | $8,295 | $15,998 |
Estimates assume 65% occupancy. Actual tax may differ based on local exemptions, booking fees, and platform collection.
STR Tax Rates by City in Kentucky
Local taxes significantly impact the total STR tax burden in Kentucky. The table below shows combined state + local rates for 3 cities, sorted by total rate. The highest combined rate is 13.5% in Louisville.
| City | Local Tax | Total Rate | Tax on $200/night | Tier | Notes |
|---|---|---|---|---|---|
| Louisville | 6.5% | 13.5% | $27.00 | High | Jefferson County/Louisville Metro 6.5% transient room tax. |
| Lexington | 5.8% | 12.8% | $25.50 | High | Fayette County/Lexington 5.75% transient room tax. |
| Bowling Green | 3.0% | 10.0% | $20.00 | Moderate | Warren County 3% transient room tax. |
How Kentucky Compares to Other States
Below is a comparison of Kentucky with five states that have similar state-level STR tax rates. This comparison helps illustrate where Kentucky stands relative to other states in terms of tax burden, platform collection, and registration requirements.
| State | State Rate | Sales Tax | Lodging Tax | Platform Collects | Registration |
|---|---|---|---|---|---|
| Kentucky (KY) | 7.0% | 6.0% | 1.0% | Yes | Required |
| Indiana (IN) | 7.0% | 7.0% | 0.0% | Yes | Required |
| Mississippi (MS) | 7.0% | 7.0% | 0.0% | Yes | Required |
| Tennessee (TN) | 7.0% | 7.0% | 0.0% | Yes | Required |
| Minnesota (MN) | 6.9% | 6.9% | 0.0% | Yes | Required |
| Nevada (NV) | 6.8% | 6.8% | 0.0% | Yes | Required |
Frequently Asked Questions About Kentucky STR Taxes
What is the short-term rental tax rate in Kentucky in 2026?
The state-level tax rate on short-term rentals in Kentucky is 7.0%, consisting of 6.0% sales tax and 1.0% lodging tax. Local taxes can bring the total to 13.5% in cities like Louisville. At $200/night with 65% occupancy, the state-level tax alone is approximately $3,318 per year.
Does Airbnb collect STR taxes in Kentucky?
Yes. Airbnb, Vrbo collect state taxes. However, local and county taxes may not be covered by platform collection. Always verify with your local tax authority what taxes your platform collects on your behalf.
Do I need to register my short-term rental in Kentucky?
Yes. Kentucky requires STR operators to register with the state. This typically includes obtaining a sales tax permit and/or lodging tax registration. Many cities and counties in Kentucky also require local STR permits or business licenses. Check with both state and local authorities for specific requirements.
What is the total STR tax rate in Louisville, Kentucky?
The total combined tax rate in Louisville is 13.5%, which includes the 7.0% state rate plus 6.5% in local taxes. Jefferson County/Louisville Metro 6.5% transient room tax. At $200/night with 65% occupancy, this amounts to approximately $6,399 per year in taxes.
How much will I owe in STR taxes in Kentucky?
Your annual STR tax depends on your nightly rate, occupancy, and location. At the state level (7.0%), a property earning $200/night with 65% occupancy would owe approximately $3,318/year in state taxes alone. In Louisville, the total tax at the same rate would be approximately $6,399/year. Use our STR tax calculator for a customized estimate.
STR Tax Compliance Checklist for Kentucky
Follow these steps to ensure you are fully compliant with Kentucky short-term rental tax requirements. Missing any step could result in penalties or back-tax assessments.
- Register with the state — Obtain a Kentucky sales tax permit and/or lodging tax registration from the state Department of Revenue before accepting bookings.
- Check local permit requirements — Contact your city and county offices to determine if a local STR permit, business license, or zoning approval is required. Use our STR regulations lookup to check rules for your specific zip code. Many municipalities in Kentucky have separate registration processes.
- Determine your total tax rate — Your rate combines state taxes (7.0%) with any local/county taxes. In Louisville, the total reaches 13.5%. Use our calculator for your specific city.
- Verify platform collection — Airbnb, Vrbo collect state taxes. Confirm exactly which taxes are covered and which you must remit separately.
- Collect and remit taxes on schedule — Kentucky requires tax remittance on a monthly, quarterly, or annual basis depending on your revenue volume. File returns even in months with no bookings to maintain your account in good standing.
- Keep detailed records — Maintain records of all bookings, gross income, taxes collected, and expenses for at least 3 years. This documentation is essential for audits and for claiming deductions on your federal tax return.
Calculate Your Kentucky STR Tax
Use our STR tax calculator to get a personalized estimate of your annual tax obligation in Kentucky. Enter your nightly rate and occupancy to see your projected state and local taxes, or browse all 50 states to compare STR tax rates across the country.
Also check: STR regulations by zip code | Sales tax rates | Homestead exemptions | Landlord-tenant law