Kansas City, Missouri, voters approve new lodging taxes on STRs
- Apr 18, 2023 | Jennifer Sokolowsky
Voters in Kansas City, Missouri, have approved a new tax on short-term rentals (STRs). They also voted to double the city’s lodging and tourism fee from $1.50 per bedroom per occupied night to $3. That fee applies to short-term rentals as well as hotels and motels.
With the change, Kansas City short-term rentals will be subject to lodging taxes for the first time. The city’s convention and tourism tax only applies to establishments offering sleeping accommodations for transient guests that have more than eight bedrooms. The ballot question creates a transient boarding and accommodation tax that applies to all lodging establishments, including short-term rentals, that are not otherwise subject to the convention and tourism tax.
Short-term rental guests will pay the tax when they pay their bill. Operators will be required to register with the city for tax purposes, collect the tax from guests, file lodging tax returns, and submit the tax to the city.
It’s estimated that around 4,000 short-term rentals are operating in Kansas City, but only 7% of them are registered, according to a city audit. Short-term rentals make up an estimated 7% to 11% of the city’s overall hotel room supply. The audit also shows that Kansas City missed out on $2.28 million between July 2021 to August 2022 from not levying the convention and tourism tax on STRs.
Tax registration for short-term rentals could begin as early as May 15. However, the city will not be able to collect the tax on visitors in town for the NFL draft April 27–29.
Kansas City’s vacation rental rules define short-term rentals as “the rental of property, a dwelling unit or a portion thereof for a period of less than 30 consecutive days,” that are not owner-occupied.
Hosts are required to obtain a short-term rental permit from the city to operate. They can apply for one of two types: a “seasonal” permit (for properties rented 95 days or less per year) or a “year around” permit (rented more than 95 days per year).
Hosts must also observe zoning rules, safety measures, and occupancy limits, and they’re prohibited from holding events at their properties, among other rules. In multifamily buildings, only one unit or 25% of all units, whichever is greater, may be used as a short-term rental, and the same host may not have more than four short-term rental units in the same building.
Kansas City short-term rentals are also subject to state lodging taxes, including sales and tourism taxes. Short-term rental operators are required to register and file lodging tax returns with state tax authorities. Airbnb collects state taxes on behalf of its listings at the time of payment, but Vrbo does not collect Missouri lodging taxes. Operators are responsible for compliance on any lodging taxes that are not collected on their behalf.
MyLodgeTax can help vacation rental hosts automate and simplify lodging tax compliance on the local and state level, including tax registration and filing. For more on vacation rental lodging taxes in Missouri, see our state Vacation Rental Tax Guide. If you have tax questions related to vacation rental properties, drop us a line and we’ll get back to you with answers.