Effective June, 1, 2005, a new section of KRS Chapter 142 creates a transient room tax (lodging tax) at the rate of 1 percent of the rent, on every occupancy of any suite, room, rooms, or cabins charged by all persons, companies, corporations, groups, or organizations doing business as motor courts, motels, hotels, inns, tourist camps or like or similar accommodations businesses (excludes campgrounds). Tax receipts from this tax will be deposited into the Tourism, Meeting and Convention Marketing Fund administered by the Commerce Cabinet. This fund shall be used for the sole purpose of marketing and promoting tourism in the Commonwealth including expenditures to market and promote events and venues related to meetings, conventions, trade shows, cultural activities, historical sites, recreation, entertainment, natural phenomena, areas of scenic beauty, craft marketing, and any other economic activity that brings tourists and visitors to the Commonwealth.
The transient room tax is in addition to the current 6 percent sales tax, and any locally assessed transient room tax, and will be reported separately each month on Form 73A850, Transient Room Tax Monthly Return. For the purposes of state sales tax calculations, the 1 percent transient room tax should be reported as part of taxable receipts just as the locally assessed transient room tax is currently reported.
Questions can be directed to the Excise Tax Section, 200 Fair Oaks Lane, Frankfort KY 40620, (502) 564-6823.