LOUISVILLE, Ky. (WDRB) --  Airbnb will start automatically collecting Louisville hotel taxes of 8.5 percent on the home sharing platform’s bookings in Jefferson County under an agreement with Louisville Metro government.

The taxes will be charged beginning April 1, ahead of the Kentucky Derby on May 5, which is by far the biggest weekend of the year for Louisville homeowners to rent out their rooms, apartments and houses on Airbnb.

“This is a huge first step for us to go to that next level in how we promote and market the sharing economy,” said Karen Williams, president and CEO of the Louisville Convention and Visitors Bureau, which is funded through local hotel taxes.

The local agreement comes on top of Airbnb’s deal with the state, announced last September, to collect the statewide 7 percent sales tax on hotel stays throughout Kentucky.

The agreements, once fully implemented, will result on a total of 15.5 percent in taxes collected by Airbnb on Jefferson County bookings.   

As of today, it’s up to Airbnb hosts to handle the paperwork of remitting Louisville hotel taxes to the Metro Revenue Commission, and because of light enforcement, hosts who ignore the taxes can undercut those who play by the rules.

“With clear, fair rules to regulate home sharing and now a tax agreement to bring in new revenue, Louisville has emerged as a national model for how cities can capitalize from the sharing economy,” Airbnb policy director Laura Spanjian said in a news release.

The 8.5 percent local tax is comprised of 7.5 percent to support the Convention and Visitors Bureau, which includes the $207 million renovation of the Kentucky International Convention Center in downtown Louisville; and 1 percent to support the Kentucky Center for the Arts.

Reach reporter Chris Otts at 502-585-0822, cotts@wdrb.com, on Twitter or on Facebook. Copyright 2018 WDRB News. All rights reserved.