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Owensboro proposes tougher transient room tax rules, places responsibility on platforms or hosts
Summary
City officials advanced amendments to the transient room tax ordinance to clarify definitions, require host registration and monthly reporting, and shift collection responsibility to the party receiving rent, citing noncompliance by Airbnb and enforcement tools including fines and audits.
Owensboro commissioners advanced a first reading of an ordinance that would tighten how the city collects its 4% transient room tax by clarifying who is responsible to collect and remit taxes and by expanding registration and reporting obligations for short‑term rentals.
City Attorney Mark Pfeiffer and Director of Financial and Support Services Angela Waniger told the commission the revised ordinance would define key terms such as "broker," "host" and "rent," broaden the definition of rent to include fees (cleaning, pet fees and similar charges), and change the responsible party to the entity receiving the rent (either the broker/platform or the host). The tax rate remains unchanged at 4%.
Waniger said the ordinance would require each host to register with the city (no annual fee) and to file a monthly return for each short‑term rental unit; hotels would continue to file one return per hotel. Registration would be valid for one year and must be renewed annually. Staff said the registration form will be available on the city's website and that the city will allow until February to become compliant after second reading; Waniger stressed that failing to meet the March 1 deadline could result in fines up to $500 per offense, a 10% late penalty and monthly interest.
Officials said the revised rules respond to persistent noncompliance by Airbnb. "The city has no agreement yet with Airbnb; we've reached out to them several times ... and not getting any feedback," City Attorney Mark Pfeiffer said. Staff contrasted that with other distribution platforms: VRBO and Expedia are remitting to Owensboro and providing monthly reports accompanied by checks.
Enforcement tools discussed include business license status (noncompliant hosts can be placed in bad standing), audit authority under occupational/net profit ordinances, targeted letters and fines, and use of third‑party data (staff cited a subscription to AirDNA) plus manual field checks to identify unregistered units. Commissioners asked how fines would be applied; staff said fines are assessed per offense and that the city plans a graduated approach for habitual violators.
Commissioners and staff emphasized outreach and education in addition to enforcement. The ordinance was read on first reading; staff said they will return for a second reading and that implementation details — including an online filing portal — are in progress.
What happens next: The ordinance advances to second reading; staff expect an implementation window and will provide registration forms and assistance to hosts prior to enforcement.
