Should Kansas City tax short term rentals like it does hotels? Voters will decide in April

Kansas City voters will weigh in on two ballot questions this April that will affect how the city regulates and taxes short term rentals like Airbnb and Vrbo.

A recent report from the city auditor’s office found that missing permit fees, as well as missed opportunities to tax short term rental units has caused the city to miss out on about $3.7 million dollars.

The April 4 municipal election will be voters’ chance to have a say on whether the city should make up for those dollars by taxing and imposing a room fee on short term rentals.

Since 2018, more than 4,000 short term rentals have been listed in Kansas City on a third party site. Residents across the city have raised concerns about the rise in short term rentals and the lasting impact they can have on neighborhoods.

“It’s really terrible,” West Plaza resident Sharon Pendleton told The Star in November. “This sudden vacating of rental properties in the West Plaza area is economically devastating for an area like this.”

Despite the large number of units operating as short term rentals, the city cannot collect special tourism taxes or fees — like its convention and tourism tax and its hotel and motel occupancy fee — from them because they are not legally considered hotels.

Missouri defines a hotel in Kansas City as having more than eight bedrooms for accommodating guests; previously Kansas City’s municipal code matched that definition.

This upcoming vote will determine whether the city can now impose a 7.5% local convention and tourism tax on short term rentals, just like it does with hotels and motels. The vote will also determine if the city will charge $1.50 per night on rooms as a business license fee on each room.

What will actually be on the ballot?

The city council will have two short term rental questions on the ballot on April 4.

One question will be about whether the city can charge a $1.50 business license fee on each room for each night.

“Shall the City be authorized to impose the following license fee for the purpose of funding convention and tourism activities: Up to an additional $1.50 per occupied sleeping room per day on all hotels, motels and tourist courts, with such fees being in addition to the existing $1.50 occupancy fee on hotels and motels for a combined fee of $3.00 per occupied sleeping room per day also to be applied to all short- term rentals conducting business within the City?”

The second question will be about whether the city can impose a transient boarding and accommodation tax on short term rentals. The ballot will read as follows:

“Shall the City of Kansas City impose a Transient Boarding and Accommodation Tax of seven and one-half percent (7.5%) to all lodging establishments, including short-term rentals, not otherwise subject to the City’s Convention and Tourism Tax?”

Do you have any other questions about short term rentals in Kansas City? Ask us at kcq@kcstar.com.