Executive Overview

Short-term rentals ARE ALLOWED in Oak Grove, Kentucky, subject to specific regulatory requirements. The city has established a comprehensive framework governing short-term rental operations, including business licensing, tax collection, and enforcement mechanisms. Investors should note that Oak Grove is actively monitoring and enforcing compliance, with recent city council actions targeting unlicensed operators.

How to Start a Short-Term Rental Business in Oak Grove

Step-by-Step Process

1. Obtain Business License

   • Contact Visit Oak Grove (Tourism Commission) to obtain a business license
   • This is mandatory for operating any short-term rental within city limits

2. Register for Transient Room Tax Collection

   • Register with the Oak Grove Tourism Commission
   • Set up systems to collect the 4% transient room tax

3. Ensure Zoning Compliance

   • Verify your property zoning allows for short-term rental use
   • Obtain any necessary zoning permits

4. Establish Tax Reporting Systems

   • Implement monthly reporting procedures
   • Set up monthly tax remittance schedule (due by 30th of each month)

Required Documents, Permits, Licenses, and Guidelines

Mandatory Requirements

Business License

• Required from the City of Oak Grove
• Contact: Visit Oak Grove / Tourism Commission

Transient Room Tax Registration

• Register as a taxpayer with the Oak Grove Tourism Commission
• Monthly tax reporting required (Form provided by Commission)
• Weekly reporting required if delinquent

Zoning Compliance

• Zoning permit may be required
• Property must comply with zoning district requirements
• Certificate of occupancy may be needed

Key Definitions for Compliance

Short-Term Rental (per Oak Grove Ordinance):

• A dwelling or dwelling unit rented for less than 30 consecutive days
• No meals served
• Each separate unit in multi-unit structures counts as individual STR
• Excludes: Hotels, motels, extended stay facilities, bed & breakfasts, boarding/lodging houses

Specific Regulations

City of Oak Grove Regulations

Transient Room Tax (4%)

• Imposed on all short-term rental occupancies
• Tax may be added to rent at taxpayer's option
• Funds support the Tourism Commission's operations
• Effective since August 1, 2007

Payment Requirements

• Monthly payments due by 30th of each month
• If 30th falls on weekend/holiday, due next business day
• Must be accompanied by detailed report
• Reports are confidential but may be compiled statistically

Enforcement and Penalties

• Delinquency Penalties: 10% penalty plus 12% annual interest
• Weekly Reporting: Required if delinquent
• Criminal Penalties:
  • Theft by failure to make required disposition (KRS 514.070)
  • Class A misdemeanor (under $500)
  • Class D felony ($500-$10,000)
  • Class C felony ($10,000+)
• Collection: Tourism Commission may seek enforcement through Christian County Court, City Police, Code Enforcement

Kentucky State Requirements

House Bill 8 Compliance

• All short-term rental properties must collect and remit transient room tax
• State-level requirement that supplements local ordinances

County-Level Regulations

No specific Christian County short-term rental regulations were identified in the provided materials. County-level requirements would apply as needed for general business operations.

Current Enforcement Situation

Recent City Actions

• City Council identified 50+ homeowners operating STRs without business licenses (November 2024)
• City is implementing tracking systems through tourism app
• Ordinances being adjusted to specifically address short-term rentals
• Focus on non-compliant operators who don't pay required taxes

Compliance Expectations

• All STR operators must obtain business licenses
• Many non-compliant operators identified as out-of-state residents
• City pursuing back tax collection

Contact Information

Primary Contacts

Oak Grove Tourism Commission / Visit Oak Grove

• Executive Director: Traci Cunningham
• Phone: (270) 439-4646
• Email: Contact through city administration
• Address: 8505 Pembroke Oak Grove Rd., P.O. Box 250, Oak Grove, KY 42262-0250
• Website: www.oakgroveky.org

City of Oak Grove

• Phone: (270) 439-4646
• Fax: (270) 439-1201
• Address: 8505 Pembroke Oak Grove Rd., P.O. Box 250, Oak Grove, KY 42262-0250
• Website: www.oakgroveky.org

Mayor Jackie Oliver

• Contact: Through City Clerk's office

Code Enforcement Officer

• Contact: Through City Hall at (270) 439-4646

Important Links and Sources

Primary Documents

• Oak Grove Transient Room Tax Ordinance: oakgroveky.org/wp-content/uploads/2024/12/OG-Ordinance-Transient-Room-Tax.pdf
• Oak Grove Zoning Ordinance: comdev-services.com/wp-content/uploads/2019/09/Oak-Grove-zoning-ordinance-with-cover.pdf
• Christian County Now Article: christiancountynow.com/news/267762-oak-grove-city-council-discovers-dozens-of-homeowners-avoiding-airbnb-business-licensing/

State Resources

• Kentucky Department of Revenue (House Bill 8 Information): revenue.ky.gov/Business/Transient-Room-Tax/Pages/default.aspx

Investment Considerations

Market Dynamics

• Strong enforcement environment with active monitoring
• Significant number of existing non-compliant operators
• Local hotels/motels concerned about competitive advantage
• Tourism Commission actively tracking compliance

Financial Implications

• 4% transient room tax affects pricing competitiveness
• Business license fees and compliance costs
• Potential back tax exposure for non-compliant operators
• Criminal penalties create legal risk for serious violations

Compliance Strategy

• Obtain business license before operations
• Implement robust tax collection and reporting systems
• Monitor city ordinance updates closely
• Consider professional property management for compliance

This regulatory environment requires careful attention to compliance from the outset of any short-term rental investment in Oak Grove, Kentucky.