City of Owensboro warns Airbnb owners to pay outstanding taxes

City officials warn AirBnB owners of outstanding taxes
Published: Sep. 20, 2023 at 7:47 PM CDT
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OWENSBORO, Ky. (WFIE) - Owensboro city officials said at a meeting Tuesday they’re going to be cracking down on unpaid transient room tax from Airbnb homeowners.

The city expanded its four percent transient room tax ordinance last year to include short-term rented homes and rooms.

Now, Owensboro City Attorney Mark Pfeifer says competitors of Airbnb have changed their policies to collect that tax directly.

“We allow for written agreements to be entered into Vrbo, Expedia and those online broker companies like Airbnb,” he said. “We’ve gotten good response from Vrbo and Airbnb, but Airbnb in Owensboro and across the state has refused to remit the tax.”

As of Wednesday, there are currently 80 rental properties in the Owensboro area listed on the Airbnb website.

14 News spoke with more than a dozen of those homeowners today, who say some of their first calls this morning were to accountants or Airbnb support.

Most weren’t even aware they were responsible for paying the tax themselves.

Under the city’s ordinance, the responsibility falls on the homeowner for paying the tax to the city and not the online broker --meaning these homeowners could be liable for a fine for every month they didn’t pay the tax and in extreme cases, jail time.

“Potentially, there’s a 30-day jail sentence,” Pfeifer said. “I wouldn’t expect that would be the first thing the city would do obviously, but there is a $500 fine for not complying and that would be more likely to be the remedy in this situation.”

Pfiefer said anyone with an Airbnb in Owensboro should register with the city and make sure they don’t have any outstanding fines.

Airbnb Public Policy Manager Vincent Fricilli said in a statement to 14 News,

“Since 2017 Airbnb has remitted nearly $38 million in tourism taxes to localities across Kentucky, and we want to continue to do the same across every town in the Commonwealth. We are working with the General Assembly on a solution, already used by other states, to create a tax collection system that will reduce the compliance burdens for every local government and ensure all localities receive local tourism taxes.”