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Kansas City tightens STR regulations

  • May 19, 2023 | Jennifer Sokolowsky

The City Council of Kansas City, Missouri, has passed two new laws related to short-term rentals (STR) in an attempt to balance the interests of neighborhood residents and a growing number of short-term rental hosts. 

According to the city, 340 short-term rentals within city limits are registered, but up to 1,400 are operating illegally. More than 90% of short-term rentals have operated without a required permit since 2018, a city audit found. The number of active Kansas City vacation rental properties rose by more than 40% from the summer of 2021 to the summer of 2022, according to STR data firm AirDNA. 

The first ordinance affects non-resident STRs, meaning owners don’t use these properties as their primary residences. Under the new rules, non-resident short-term rentals aren’t allowed in residential districts. Non-resident STRs that were already registered with the city before the new law was approved will be exempt and are allowed to continue operating. 

The new law also moves management of STRs from the city planning department to neighborhood services.

The second ordinance, which goes into effect June 15, provides new guidelines for the STR registration process. Under the new rules, operators must:

  • Register annually with the city
  • Pay a registration fee of $200, which will increase every year based on the consumer Price index
  • Provide personal contact information to the city
  • Keep records of complaints and other transaction information

The city will begin accepting short-term rental registration applications under the new system beginning June 15. If a property changes hands, the new owner must apply for a new registration.

The law also makes it illegal to advertise a short-term rental on a marketplace such as Airbnb or Vrbo without city-issued registration. Marketplaces are prohibited from listing unregistered rentals and must remove any listings lacking city registration. The new regulations also establish a public registry for STRs and limit them in multifamily and tax-incentivized buildings.

Penalties for breaking STR rules are also spelled out under the new laws. The city can revoke STR registration for a year for one code violation; properties with three or more city code, state, or federal law violations determined to be a threat to public health and safety can have their registrations revoked for three years. Violator can be fined up to $1,000 per instance, with each day counting as a new violation.

In April, Kansas City voters approved a new tax on STRs as well as an increase of the city’s nightly lodging and tourism fee from $1.50 per bedroom to $3. Operators will be required to register with the city for tax purposes, collect the taxes from guests, and file lodging tax returns. 

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 n’ot 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.

Lodging tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Avalara Author
Jennifer Sokolowsky
Avalara Author Jennifer Sokolowsky
Jennifer Sokolowsky writes about tax, legal, and tech topics. She has an extensive international background in journalism and marketing, including work with The Seattle Times, The Prague Post, Avvo, and Marriott.
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