The Transient Tax

     A transient tax is a small percentage fee applied to short-term lodging stays, typically for guests staying fewer than 30 days. It is charged to visitors who stay in places like hotels, short-term rentals, campgrounds, and RV parks. The tax is collected by the business at the time of payment and then submitted to the local tourism commission. These funds are used to support tourism efforts, including marketing, events, and community development. In Taylor County, the transient tax rate is 3% and helps promote Campbellsville and the surrounding area as a travel destination.

Taylor County Transient Tax

     By order of Taylor County Fiscal Court in 1991, the TCTC was established to promote tourism in Campbellsville and Taylor County. Kentucky Revised Statues Chapter 91A authorizes and regulates all Kentucky Tourist Commissions.

All tourist commissions across the state have one of two ways to generate revenue to promote tourism in their area. There is a Transient tax and a Restaurant tax. Currently, there can be no new restaurant taxes enacted due to legislation. TCTC does not have a Restaurant tax, only a Transient tax. The Transient tax currently covered hotels, motels, and other short-term rentals (ie, AirBNB, VRBO, etc.)

     The 2022 Kentucky Legislature passed House Bill 8 that expand the transient room tax to include stays at campgrounds and RV parks. In addition, the new statutory language requires those facilitating the rental of accommodations to collect the room tax on their total charges for the rental of accommodations. Also, receipts from a customer for a continuous stay of 30 days or more are excluded from the transient room tax. This provision becomes effective 01/01/2023.

     The passing of this new law now requires the Taylor County Tourist Commission to extend its collection of the local 3% transient tax. As stated above, previously, this tax was collected by lodging facilities such as hotels, motels, and vacation homes. Effective January 1, 2023, all “..tourist camps, tourist cabins, campgrounds, recreational vehicle parks, or any other place in which accommodations are regularly furnished to transients..” (KRS 142.400(2)) are now subject to collecting and submitting said tax.

     So, in accordance with the new state law, beginning January 1, 2023, you must begin collecting a local 3% transient tax from all of your guests that stay less than 30 days. At the end of each month, you will be required to file a Transient Monthly Tax Return to report the tax you collected and submit the tax to the Taylor County Tourist Commission. You, as the business owner, are not paying this tax, but you are responsible for collecting said tax from your guests and submitting it to the Taylor County Tourist Commission, similar to sales tax. Penalties will result if you choose not to collect and submit this tax.

Q&As

1.  What changed under House Bill 8?
   House Bill 8 expanded Kentucky’s transient room tax to include campgrounds, RV parks, and similar accommodations. As of January 1, 2023, these businesses must now collect and submit the local 3% transient tax just like hotels and short-term rentals.
2. Who is required to collect the transient tax?
   Any business that provides short-term accommodations—including hotels, motels, Airbnbs, campgrounds, and RV parks—must collect a 3% transient tax from guests staying less than 30 days and submit it monthly to the Taylor County Tourist Commission.
3. Do business owners pay the transient tax themselves?
   No, the tax is paid by the guest. Business owners are responsible for collecting the 3% tax from guests and submitting it each month; failure to do so may result in penalties.
4. When is the transient tax due each month?
   The Transient Monthly Tax Return and payment are due at the end of each month for the previous month’s collections.
5. What happens if I don’t collect or submit the tax?
   Failure to collect and submit the transient tax may result in penalties, as required by state law.
6. Are stays longer than 30 days taxed?
   No, stays of 30 consecutive days or more are exempt from the transient tax.
7. Do online booking platforms collect the tax for me?
   In some cases, platforms like VRBO may collect taxes on your behalf, but it is ultimately the business owner’s responsibility to ensure all required taxes are properly collected and submitted.
8. What should I include in my tax return?
   You should report the total amount of taxable stays and the 3% tax collected from guests during the reporting period.
9. Why does this tax exist?
   The transient tax helps fund tourism promotion, events, and initiatives that bring visitors to Taylor County and support the local economy.