The Kentucky League of Cities (KLC) and the Kentucky Travel Industry Association (KTIA) have filed a complaint against Airbnb seeking declaratory judgment to enforce transient room tax legislation passed by the Kentucky General Assembly.
Attorneys representing KLC/KTIA and Airbnb presented arguments in Franklin Circuit Court Monday before Circuit Judge Thomas Wingate. Attorneys for Airbnb are seeking to have the suit dismissed. Those representing KLC/KTIA want Wingate to declare that Airbnb must comply with House Bill 8 from the 2022 legislative session. As amended, Kentucky statute authorized local governing bodies, including cities, to impose a transient room tax of up to 3% to provide funds for the operation of its local tourism commission. The statute also authorizes local governing bodies to impose special transient room taxes of up to an additional 1% to renovate or expand a local convention center and, in certain circumstances, pay for the operating expenses of such a center.
“We’re only asking the court to declare that under KRS 91A.390, they are in fact a person who facilitates the rental of the accommodation by brokering, coordinating, or in any other way arranging for the rental of the accommodation,” Attorney Mindy Barfield of Dinsmore & Shohl said on behalf of KLC, it’s members, and KTIA. “Because if you decide that purely legal issue, then my clients’ members do not have to litigate in 120 counties that same question, and that would give them a leg up when they later seek to enforce their own individual tax ordinances.”
Barfield told Wingate Airbnb is “pulling out all the stops to keep you from actually looking at the merits of this case while they lobby the legislature to try to fix the statute. There is an amendment to the statute that changed KRS 91A.390 precisely to fix this gap that previously existed when it comes to online travel companies and make people like VRBO and Airbnb subject to these local transient room taxes,” she said.
“They are defiantly not paying local, and particularly those enacted by small cities who can’t afford to come to court to try to enforce their rights.”
Following arguments, Wingate said he would consider what was presented and further steps could be taken in approximately three weeks.
