Overview: Are Short-Term Rentals Allowed in Paducah, KY?

Yes—short-term rentals (STRs) are allowed in Paducah, KY, subject to zoning, permitting, licensing, and tax obligations. STRs are defined as furnished living spaces rented for short durations (days to several weeks) and do not include the serving of meals by the host (which would classify the property as a Bed & Breakfast). Paducah recognizes two operational categories:

• Special Event STRs: Only allowed in R-1 Low Density Residential; capped at seven days for two weeks per year, with potential extensions via the Board of Adjustment.
• Ongoing STRs: Permitted in R-2, R-3, POP (Planned Office Park), and NSZ (Neighborhood Services Zone) only with a Conditional Use Permit (CUP); allowed by right in R-4 and higher-density residential zones.

Compliance is multi-tiered and includes zoning verification, potential CUP approval, city business licensing, and transient room tax filings. State-level obligations—especially Kentucky’s sales tax on lodging—also apply.

How to Start a Short-Term Rental Business in Paducah

The following sequence minimizes permitting risk and ensures you launch compliantly:

1. Confirm zoning and STR eligibility for your property
   • Use the Find My Zone tool to determine the zone for your address.
   • Validate whether STRs are allowed by right, by CUP, or as special-event only in that zone.
2. Secure a Conditional Use Permit (if required)
   • If your property is in R-2, R-3, POP, or NSZ, apply for a CUP through the Board of Adjustment (BOA) or the Historic & Architectural Review Commission (HARC) if located in a historic district.
   • If an STR is currently operating without a required CUP, submit an application immediately; the BOA/HARC will determine operational continuation.
3. Obtain a Business License from the Finance Department
   • The City requires a business license for STR operations; apply via the city’s online portal.
4. Register for and collect Paducah’s Transient Room Tax
   • Register with the McCracken County Finance/Treasurer’s office as a host and file monthly transient room tax reports (see Tax section below).
5. Confirm state-level tax obligations
   • Kentucky generally imposes a 6% sales and use tax on short-term lodging. If your booking platforms do not collect and remit state taxes, register with the Kentucky Department of Revenue and file returns accordingly.
6. Launch operations
   • Once permits and licenses are in hand, list and operate in accordance with any CUP conditions and all city/county/state requirements.

Required Documents, Permits, Licenses, and Guidelines

• Zoning verification (Find My Zone)
  • Purpose: Confirm STR eligibility based on property zone.
• Conditional Use Permit (CUP)
  • Required for ongoing STRs in R-2, R-3, POP, NSZ.
  • Approving body: Paducah Board of Adjustment or HARC (if historic district).
  • Note: CUPs may list site-specific operational conditions (e.g., parking, occupancy limits).
• Special Event STR permit/approval
  • Allowed only in R-1 for up to seven days twice per year; BOA may grant longer durations.
• Business License
  • Issued by Paducah Finance Department via the city’s business license portal.
• Transient Room Tax Registration and Monthly Reporting
  • Register with McCracken County Finance/Treasurer; file monthly reports and remit taxes regardless of collection amount.
  • Late filings incur interest and penalties (see tax details below).
• State tax registration (Kentucky Department of Revenue)
  • If platforms do not collect/remit Kentucky sales tax on lodging, register and file state sales/use tax returns.
• Ordinance and Municode access
  • Review Paducah’s STR ordinance and the full Code of Ordinances (Municode) for zoning and compliance details.

Note: Safety inspections or specific building safety measures (beyond general compliance with state building codes) are not explicitly required by the City’s STR pages; however, hosts should adhere to applicable state codes for smoke detectors, egress, etc.

Specific Regulations (City, County, and State)

• Paducah Zoning and STR Types
  • Special Event STR: Permitted only in R-1; max seven days for two weeks per calendar year; BOA may extend.
  • Ongoing STR:
    • R-2, R-3, POP, NSZ: Allowed by CUP only; the permit will specify conditions.
    • R-4 and higher-density residential: Allowed by right.
  • Typical rental length: 14–30 days.
• Paducah Transient Room Tax (City of Paducah Ordinance No. 2019-8-8587)
  • City transient room tax rate: 4% total, allocated as follows:
    • 3% for the Paducah Convention and Visitors Bureau
    • 1% for the Convention Center Corporation
  • Applies to motor courts, motels, hotels, inns, bed & breakfast inns, and similar accommodations.
  • Reporting:
    • File monthly with the McCracken County Treasurer by the 20th day of the month for the prior month.
    • Reports are required even if no taxes were collected.
    • Late fee: 10% of tax due per month (minimum $25).
    • Interest: 7% per annum on late remittances.
  • Internet broker arrangements:
    • Hosts using platforms (e.g., Airbnb, VRBO) must register and comply unless the platform has a written agreement with the City to report, collect, and remit the tax.
  • Exceptions:
    • Apartment rentals of 30 days or more are exempt from the transient room tax.
  • Violation penalty:
    • Misdemeanor; up to $500 fine, or up to 30 days imprisonment, or both; each month of non-filing constitutes a separate offense.
• McCracken County role
  • The County Treasurer administers collection and disbursement per city ordinance; the City’s STR page directs hosts to file the County Transient Room Tax Form.
• Kentucky State Taxes
  • Sales and use tax of 6% generally applies to short-term lodging; hosts must register and file if platforms do not collect and remit.

Additional county-wide regulations specific to short-term rentals were not identified in the provided content. State-level requirements for safety and building compliance apply but were not specified in the provided city resources.

Local Authority Contacts and Filing Information

• Paducah Planning Department (zoning, CUP, and STR questions)
  • Address: P.O. Box 2267, 300 South 5th Street, Paducah, KY 42002-2267
  • Phone: 270-444-8690
  • Fax: 270-444-8689
  • Email: planninginfo@paducahky.gov
  • Online permitting portal: Apply for a Short-Term Rental
• Paducah Finance Department (Business Licenses)
  • Business License and Payroll Tax information is referenced on the City site.
• McCracken County Finance/Treasurer (Transient Room Tax Registration and Filing)
  • Link: McCracken County Finance Department (hosts file monthly reports per City ordinance)
• City of Paducah Ordinances
  • Code of Ordinances (Municode)

Links to Source Pages and Documents

• Paducah Planning – Short-Term Rentals overview: paducahky.gov/departments/planning/short-term-rentals
• Resources for Property Owners Looking to Offer Short-Term Rentals: paducahky.gov/news/resources-property-owners-looking-offer-short-term-rentals
• Find My Zone (GIS zoning lookup): map-gis.maps.arcgis.com/apps/webappviewer/index.html?id=79880722367946ac9967eefa49b7d891
• Apply for a Short-Term Rental (City permitting portal): paducahky-energovweb.tylerhost.net/apps/SelfService
• City of Paducah Transient Room Tax Ordinance (Ordinance No. 2019-8-8587): mccrackencountyky.gov/wp-content/uploads/2020/02/City-of-Paducahs-Transient-Room-Tax-Ordinance.pdf
• McCracken County Finance Department (Transient Room Tax Filing): mccrackencountyky.gov/finance-department/
• Paducah Code of Ordinances (Municode): www.municode.com/library/ky/paducah/code_of_ordinances
• General Kentucky STR context (state-level tax overview): www.redawning.com/pm/post/kentucky-short-term-rental-laws
• Paducah STR management overview (third-party context): www.gosummer.com/vacation-rental-management/paducah-kentucky

Notes for investors

• Paducah’s regulatory framework is relatively clear and investor-friendly, but zoning-based pathways (by right vs. CUP) are pivotal. Always confirm zoning first.
• The 4% transient room tax is collected monthly via McCracken County; late filings trigger penalties and interest.
• Kentucky’s 6% sales/use tax on lodging applies; verify whether your platforms remit it, and register with the Department of Revenue if they do not.
• Historic districts may introduce additional review through HARC; factor permit timing into acquisition and launch plans.