01/05/2023

Kentucky Began Taxing Business Events on Jan. 1

This directly impacts nonprofits who do business in the state

As of Jan. 1, 2023, a wide range of services in Kentucky are now subject to a 6 percent sales and use tax, including several impacting in-person meetings and events in the state.

The Kentucky legislature passed comprehensive tax reform legislation last spring that seeks to reduce the state’s reliance on income taxes over time, in favor of higher sales tax rates. The legislation (HB 8) expands the state’s sales and use tax to almost 40 additional services previously not taxed, including rental of space for meetings, conventions, short-term business uses and entertainment events; social event planning and coordination services; and parking services, among others.

The Kentucky Department of Revenue issued limited guidance in September confirming that hotel conference room and ballroom rentals and convention center space are among the types of charges that will be subject to sales and use tax starting next month.

The Exhibitions & Conferences Alliance (ECA) is looking to work with industry partners in Kentucky to address the events-related tax changes in the 2023 Kentucky legislative session.

“These troubling new taxes create a disincentive for hosting future association meetings and trade shows in Kentucky,” said Tommy Goodwin, vice president of government affairs for the Exhibitions & Conferences Alliance (ECA). “Given how important events are to the economy and jobs in Kentucky, ECA is strongly encouraging the Kentucky legislature to address this important issue as part of its forthcoming 2023 legislative session.”

Destination and hospitality leaders in Kentucky also vowed to seek legislative redress to keep their state competitive for meetings and events.

“The news of this bill’s passing is unfortunate and there is conflicting information on what the taxation entails,” said Cleo Battle, president and CEO of Louisville Tourism. “We are working with our regional, national and global partners including our state’s tourism association [Kentucky Travel Industry Association] who has made this their legislative priority and we will be actively fighting to keep our industry competitive. Kentucky is certainly not the only state that has taxes on meeting space, but this is certainly a new threat to convention development. Regardless, we are hopeful our destination’s affordability, quality venues, warm hospitality and authenticity will tip the scales in our favor for meeting planners making decisions about where they will do business.”

This article was provided to OSAP by ASAE's Power of Associations and Inroads.