Exhibitors Now Exempt From Revision to Kentucky's Sales Tax

This week, Kentucky Gov. Andy Beshear signed a revision to the state's amended sales tax, exempting vendors from paying the 6 percent tax on exhibit space.

As of Jan. 1, Kentucky's sales tax now applies to more than 30 extra service, including "rental of space for meetings, conventions, short-term business uses, entertainment events, weddings, banquets, parties and other short-term social events." But as Louisville Tourism and its meetings industry partners began to parse the law's new language, they realized there was an unintended consequence that created a sort of pyramid tax, where the 6 percent would be applied twice for the same space: The host would pay it for the rental of the facility, and then the exhibitor would pay it again for their booth space. A targeted campaign brought the issue in front of the commonwealth's legislators, resulting in the exhibitor exemption.

"We heard from our meeting planners, and we lobbied to get the law recoded," said a spokesperson for Louisville Tourism.

The governor's action this week was met with cheers from Kentucky's meetings industry partners.

The Exhibitions & Conferences Alliance applauded the Kentucky General Assembly and the governor for adopting this "common-sense revision," saying the action allows the state to remain competitive in the convention space. Business events bring in nearly $750 million a year in economic impact to the commonwealth, which the ECA felt was jeopardized by the law as originally written.

“This revision makes good business sense and is a win for Kentuckians, the tourism economy of Kentucky and the groups we do business with,” said Cleo Battle, president and CEO of Louisville Tourism. “It helps Louisville and our fellow Kentucky cities compete for lucrative convention business that helps our hospitality industry employ 60,000 citizens of Louisville alone.”

The Kentucky Travel Industry Association joined in the push for the exemption.

“This has been a classic example of two aspects of legislation,” said Hank Phillips, president and CEO of the KTIA. “One is that unintended consequences are virtually inevitable, which is what gave rise to the exhibitor issue in the first place. The other, and more important aspect, is what can be achieved when a team comes together to work toward a solution. Along with KTIA, Kentucky destination marketing organizations, many of their meetings and conference partners and ECA from the national level together formed an extremely effective team.”