Kentucky Short-Term Rental Laws (2026)

Kentucky short-term rental compliance has two layers. State tax rules apply to temporary lodging, while cities and counties control zoning, registration, licensing, safety, and operating standards for a specific address.

This 2026 guide uses current Kentucky Department of Revenue, Louisville Metro, Lexington-Fayette, Bowling Green, and Warren County sources. Confirm the city, county, zoning district, and booking channel before accepting reservations. Local rules and fee schedules can change.

Quick Answer

Kentucky generally applies its 6% sales tax and 1% statewide transient room tax to temporary accommodations.
A continuous stay of 30 days or more is excluded from the state transient room tax.
Local transient room taxes may also apply.
Louisville requires annual short-term rental registration and may require a conditional use permit depending on the location and primary-residence status.
Lexington requires zoning approval, a business license, and an annual special fees license.
Bowling Green and Warren County use zoning approval, local sign-offs, and a short-term rental license process.

Kentucky State Taxes

6% Sales Tax and 1% Transient Room Tax

The Kentucky Department of Revenue imposes a 1% transient room tax on rent for rooms, cabins, campsites, and similar accommodations furnished to transients. This is in addition to Kentucky's 6% sales tax and any applicable local transient room tax.

For state transient room tax, accommodations supplied to one person for a continuous period of 30 days or more are excluded. Local tax definitions and exemptions must be checked separately.

Kentucky says Airbnb and Vrbo collect and remit the state transient room tax for participating hosts. Since January 1, 2023, covered short-term rental platforms also must report and pay applicable local transient room taxes on the total rental charges they collect, including service fees. A host taking direct reservations generally remains responsible for registration, collection, filing, and payment of applicable state and local taxes.

Do not assume a platform handles every obligation. Confirm what each platform remits for the property, whether direct bookings create separate filing duties, and whether local occupational or net-profits taxes apply.

Louisville Short-Term Rental Rules

Louisville defines a short-term rental as a dwelling unit rented for less than 30 consecutive days where no meals are served. The city's Short Term Rental Information page requires annual registration for each property.

Registration and Zoning

Obtain a tax reporting number from the Louisville Metro Revenue Commission.
Submit a separate annual registration for each short-term rental.
The annual registration fee is $250 and registration expires one year after issuance.
A primary-residence rental in many residential or office-residential zones may qualify for administrative registration.
A non-primary-residence rental in a residential or office-residential zone generally requires both a conditional use permit and annual registration.
Properties in Old Louisville or Limerick can require a conditional use permit even when the rental is the owner's primary residence.

Conditional use permit criteria include location-specific rules, including separation from another short-term rental that received a conditional use permit. Review the current Land Development Code and obtain a written determination from Louisville Metro before relying on eligibility.

Louisville Tax

The Louisville Metro Revenue Commission lists an 8.5% transient room tax for transient lodging. Accommodations supplied for a continuous period of 30 days or more are excluded from that tax. Short-term rental hosts also must address Louisville Metro registration and applicable net-profits or occupational tax filings, even when a booking platform remits transient room tax.

Lexington Short-Term Rental Rules

Lexington defines a short-term rental as a dwelling rented for less than 30 consecutive days. Its official Short-Term Rentals program distinguishes hosted and un-hosted rentals.

Required Approvals

Lexington operators generally must obtain:

A zoning compliance permit through the Division of Planning.
An occupational business license through the Division of Revenue, if the operator does not already have one.
An annual special fees license through the Division of Revenue.

The annual special fees license costs $200 for the first short-term rental unit and $100 for each additional unit. The city's licensure requirements list a zoning permit, site and floor plans, an applicant affidavit, and at least $1 million in general liability insurance per occurrence among the required materials. Hosted rentals also require proof that a permanent resident lives at the dwelling.

Occupancy and Enforcement

For principal and accessory-use rentals, Lexington generally limits occupancy to two people per bedroom plus two additional people, or ten people total, whichever is less. Different limits may be established for a conditional-use rental. Operating without the required license can result in fines of up to $500 per day.

Lexington Tax

Lexington's code imposes transient room tax components totaling 8.5%, subject to exemptions including a continuous stay of 30 days or more. Under Lexington's hosting-platform rule, a hosting platform must collect and pay the local transient room tax when it charges or collects the rent. Otherwise, the licensee is responsible.

Bowling Green and Warren County Rules

Bowling Green and Warren County treat a short-term rental as lodging for less than 30 days. The City-County Planning Commission explains that zoning determines whether a rental is allowed by right, requires a conditional use permit, or is prohibited.

Many zoning districts require a conditional use permit from the Board of Adjustments.
Some commercial districts allow a short-term rental by right, but the operator still must complete agency sign-offs and obtain a Planning Commission license number.
Several residential, public, mobile-home-park, and industrial districts prohibit short-term rentals.
The license number must be displayed on rental-platform listings and inside the property.

Within Bowling Green, converting a property to short-term rental use also requires the city's Short Term Rental Permit process. The city guide lists a $45 application fee and a maximum occupancy of ten people per rental unit. The official Bowling Green transient room tax return lists a 4% room tax and excludes accommodations supplied continuously for 30 days or more.

Because the Planning Commission serves both city and county jurisdictions, verify every required sign-off for the exact parcel. City occupational licensing, Warren County requirements, building review, and tax accounts can be separate steps.

Compliance Checklist

Confirm jurisdiction. Identify the municipality, county, and zoning district for the exact address.
Obtain zoning approval first. Do not purchase, advertise, or accept bookings based only on nearby rentals.
Complete local registration. Obtain every required annual registration, license, conditional use permit, and business account.
Document safety and insurance. Follow the local application checklist for alarms, exits, floor plans, inspections, occupancy, and insurance.
Map taxes by booking channel. Confirm Kentucky sales tax, the state transient room tax, local transient room tax, and occupational or net-profits duties.
Display required numbers. Include permit or license numbers in listings where local rules require them.
Track renewals and changes. Calendar expiration dates and review local rules before renewal or a change in ownership, occupancy, or rental format.

Common Mistakes

Assuming there is one Kentucky permit that authorizes operation at every address.
Confusing the 1% state transient room tax with the separate 6% sales tax or local room taxes.
Assuming Airbnb or Vrbo handles direct-booking taxes, business registration, or local zoning.
Using a tax rate or permit fee from a different Kentucky city.
Advertising before a required conditional use permit, zoning approval, or license is issued.
Relying on an old fee schedule instead of the current city application portal.

Official Sources

Bottom Line

Kentucky hosts must combine state tax compliance with address-specific local approval. Confirm zoning and licensing first, then determine which state and local taxes apply to each booking channel. This guide is general information, not legal or tax advice.