LOUISVILLE, Ky. (WDRB) -- A new law that goes into effect Jan. 1 will impose a 6% sales tax on rental space for meetings and conventions. In Louisville, that could pose an obstacle for potential business at Kentucky Venues in 2023.
In 2022, 334 events between the Kentucky International Convention Center and Kentucky Exposition Center drew more than 2 million people to Louisville. The estimated economic totaled just over $316 million That's exponential growth from 2021, which saw 210 events between the two facilities and drew about $184 million in economic impact.
But what could come in 2023 — given the looming 6% tax on convention business — leaves industry officials with questions about what they're interpreting as a vague law.
"We're working closely with those peers that we have and communicating some of the concerns but we're also seeking guidance from the decision makers looking to implement this policy,” said Ian Cox, a spokesman for Kentucky Venues.
While administration at Kentucky Venues said it understands the guidance being given to convention centers and rental spaces, it's seeking guidance on how the sales tax will be applied to its variety of events at KICC and KEC.
Kentucky Venues says it will comply with the new law begging in 2023. However, there is confusion about who will pay the new sales tax, who will collect it and how it will be enforced.
Officials aren't sure how much, if at all, it will impact exhibitors considering Kentucky Venues as a location for shows in the future.
"I think it's early in the process for us to be able to tell that," Cox said. "But I think we need to spend a lot of time educating and informing people how you can do business here."
Despite the concern around the sales tax, Senate Budget Committee Chair Chris McDaniel, R-Latonia, is confident in the guidance provided.
"The person who rents the center will not be subject to the tax," McDaniel told WDRB News on Wednesday. "It will be the individual vendors who ultimately distribute there. That booth space will be subject to this to the tax."
While industry leaders work to determine how they're affected, business rolls on at Kentucky Venues. Event organizers came together Wednesday for Louisville conventions and exhibitions to discuss future business with cities from around the country. The "show of shows," which hosts event organizers to survey which cities to bring their exhibitions, happened inside the KICC where Louisville's services and amenities were on full display.
After all, events at KICC and the KEC, draw a large majority of tourism in Louisville.
"You take out Thunder Over Louisville, you take out Derby, the remaining events tend to operate within our spaces," Cox said.
Potential exhibitors and organizers are still looking to Louisville for events, and there's confidence that won't change.
"I'm pretty bullish about the future, particularly as it relates to our facilities,” Kentucky Venues President and CEO David Beck said.
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