Kentucky Hotel Tax Rate: State, Local, and Exemptions

The Kentucky hotel tax rate starts at 7% statewide — a 6% sales tax plus a 1% statewide transient room tax — and then climbs based on where you’re staying, because cities and counties add their own transient room taxes on top. In Louisville, the local add-on alone is 8.5%, so a room there carries more than 15% in combined lodging tax. In a small rural county with a low local rate, the total may land closer to 8% or 9%. What you actually pay depends on the jurisdiction.

The Two State-Level Taxes

Every hotel, motel, short-term rental, campground, and RV park in Kentucky charges a 6% sales tax on the room rate under KRS 139.200.¹ This is Kentucky’s general sales tax, and lodging is one of the services it specifically covers.

On top of that, Kentucky imposes a separate 1% statewide transient room tax under KRS 142.400.² It applies to the rent charged for any room, suite, cabin, campsite, or similar accommodation. Together, these two taxes create a fixed 7% floor that every taxable stay in Kentucky carries.

The Local Transient Room Tax

The variable piece is local. Under KRS 91A.390, cities and counties with tourist and convention commissions can add their own transient room taxes, and the statutory caps depend on the type of local government.³

Most cities and counties can charge up to 3%, plus another 1% if the jurisdiction funds convention center operations, for a 4% ceiling.
Urban-county governments such as Lexington-Fayette can go up to 4%, plus an additional 1% for specific programs, for a 5% ceiling.
Counties containing a city of the first class can add 1.5% on top of the base levy.
Multicounty tourist commissions can impose an additional tax with no statutory cap.

Those are maximums, not defaults. Louisville Metro, operating under its own authority, imposes a local transient room tax of 8.5%.⁴ Smaller jurisdictions may charge just 1% or 2%. Before you book, the local rate is the number worth checking, because it’s what makes the difference between a modest tax bill and one that adds meaningfully to your total.

What the Tax Applies To

The taxable amount isn’t just the nightly rate. Since 2023, Kentucky law applies the transient room tax to the “total charges for the rental of accommodations,” which covers service fees added by online booking platforms.⁵ Mandatory charges a guest can’t opt out of — resort fees, cleaning fees, and similar per-stay add-ons — are generally taxable too. Truly optional charges for separate services, like room service or parking, follow their own rules.

When You Don’t Pay Kentucky Lodging Tax

Stays of 30 Days or More

Once a guest stays 30 consecutive days, the stay stops being transient. The 6% sales tax and the 1% statewide transient room tax both stop applying at that point.¹ Local transient room taxes follow the same 30-day cutoff.³ The days have to be continuous; checking out and back in restarts the clock.

Federal Government and Qualifying Nonprofits

Stays paid directly by a federal agency are exempt from the 6% sales tax. Charitable organizations with federal 501(c)(3) status that have obtained a Kentucky exemption certificate also qualify.⁶ To claim the exemption at check-in, the organization presents a completed Purchase Exemption Certificate (Form 51A126) showing its exemption number and an authorized signature.⁷ Employees can’t use these certificates for personal travel; misuse carries penalties under KRS 139.990.

One point that surprises people: Kentucky state government employees on official travel are not exempt. The government exemption reaches the federal government, not state agencies. A state employee attending a conference still owes the full tax on the room.

Short-Term Rentals and Booking Platforms

Since January 1, 2023, online booking platforms such as Airbnb and VRBO have been required to collect and remit the 6% state sales tax, the 1% statewide transient room tax, and applicable local transient room taxes on rentals they facilitate.⁵ The statute reaches anyone who “facilitates the rental of the accommodations by brokering, coordinating, or in any other way arranging” the booking.²

If you host only through a major platform, the platform handles the tax collection and remittance at all three levels. Take a direct booking outside the platform, though, and you’re personally on the hook. That means registering with the Kentucky Department of Revenue for a sales tax account, filing the monthly transient room tax return separately, and potentially registering with the local tourist commission for the local levy. Each level creates independent liability if you miss it.

Penalties for Late Filing or Non-Payment

Kentucky’s penalty structure escalates quickly. Late filing and late payment each carry a penalty of 2% of the tax due for every 30 days (or partial 30-day period) overdue, capped at 20%, with a $10 minimum.⁸ The same 2% per 30 days applies to failures to collect tax that should have been collected from guests.

Interest runs on top. For 2026, the interest rate on unpaid tax is 9%, accruing from the original due date.⁹ If a balance remains unpaid 60 days after the Department of Revenue sends notice, a 25% cost-of-collection fee can be added.⁸ On a $1,000 tax balance, the combination — the 20% penalty ceiling, 9% interest, and the 25% collection fee — can push what’s owed past $1,500 inside a year.

1
Kentucky General Assembly. Kentucky Code KRS 139.200 – Imposition of Sales Tax
2
Kentucky Legislative Research Commission. Kentucky Code KRS 142.400 – Statewide Transient Room Tax
3
Kentucky Legislative Research Commission. Kentucky Code KRS 91A.390 – Room Tax
4
Louisville Metro Government. Transient Room Tax
5
Kentucky Department of Revenue. Transient Room Tax
6
Kentucky Legislative Research Commission. Kentucky Code KRS 139.470 – Exempt Transactions
7
Kentucky Department of Revenue. Purchase Exemption Certificate
8
Kentucky Department of Revenue. Penalties, Interest and Fees
9
Kentucky Department of Revenue. Tax Interest Rate Update