Overview: Are short‑term rentals allowed?

• Yes—short‑term rentals (STRs) are allowed in Taylorsville/Spencer County, but only as a Conditional Use. Approval rests with the Taylorsville–Spencer County Board of Adjustment (BOA). Neighborhood covenants or restrictions can still block or condition a proposed STR.
• The BOA has approved STR CUPs with explicit conditions (occupancy, parking, quiet hours, trash, and operations). It has also denied STRs in specific contexts where neighborhood impacts were judged unacceptable.
• State and local taxes apply. Spencer County imposes a 3% transient room tax (TRT) on STR rent; guests also owe Kentucky’s 6% sales tax on stays of 29 nights or fewer.

Note: City-specific licensing beyond the BOA CUP was not documented in the sources. The county’s treasurer collects the 3% transient room tax and remits it to the Taylorsville–Spencer County Recreation, Tourist and Convention Commission.

How to start an STR business in Taylorsville/Spencer County

1. Confirm zoning and covenants

• Confirm zoning for your parcel (residential/agricultural) and whether a homeowners association or recorded covenants exist. Even if zoning allows an STR as a conditional use, covenants can prohibit “business” operations or impose deed restrictions that override zoning.

2. Prepare for the Conditional Use Permit (CUP)

• Expect to present a site plan (parking/turning, lighting, access), house rules (occupancy, quiet hours, no events/parties, trash, no hunting/ATVs), management plan, proof of insurance, and an emergency/contact protocol.
• Address neighbors’ typical concerns: noise, traffic, parking, safety (especially near children), and compatibility with the neighborhood’s character.

3. Submit the CUP application to the Planning & Zoning office

• The BOA holds public hearings; adjacent property owners are notified. Neighbors commonly oppose STRs based on safety, noise, and traffic, so proactive outreach is helpful.

4. Obtain approvals

• If approved, the BOA issues conditions (max occupancy, parking, quiet hours, trash provider, etc.). If denied, you may appeal per BOA procedures (not detailed in the minutes).

5. Comply with taxes and registrations

• Register to collect/remit Kentucky sales tax and the 3% county transient room tax (TRT). The Spencer County Treasurer is the designated collection agency for the 3% tax.

6. Operate to the conditions

• Post house rules, enforce occupancy and quiet hours, manage parking, and be reachable for complaints. Violations can result in enforcement and potential permit revocation.

Required documents, permits, licenses, and guidelines

• Conditional Use Permit (CUP): Required to operate an STR (as evidenced by BOA approvals and denials).
• Business license: Kentucky law requires most businesses, including STRs, to obtain a business license from the Kentucky Department of Revenue (Division of Revenue). The BOA also reminds applicants to secure their business license and any required tourism licensing.
• Transient Room Tax registration/collection: Collect and remit the 3% county TRT to the Spencer County Treasurer, who forwards it to the Taylorsville–Spencer County Recreation, Tourist and Convention Commission.
• Sales tax registration: Collect and remit Kentucky sales tax (6%) on bookings ≤ 29 nights, inclusive of cleaning fees.
• Insurance: The BOA expects proof of insurance for STRs.
• Operational materials: House rules, emergency contact information, management plan, parking plan, lighting/security details.
• HOA/deed documentation (if applicable): Evidence of any approvals or compatibility with recorded covenants.
• Fire/safety and utilities: Ensure safe access and clearly marked parking/lighting. Address internet/cell limitations if relevant to remote monitoring and emergency contact.
• Trash service: Use a licensed provider (e.g., Rumpke) and specify pickup frequency in your rules.

Specific regulations affecting STRs (City/County/State)

City & County (Taylorsville–Spencer County)

• STRs are permitted only as a Conditional Use approved by the BOA, which may impose conditions including:
  • Occupancy caps (examples include max 7 guests).
  • Parking limits (examples include 3 on‑site spaces; no street/parking on county roads).
  • Quiet hours (examples include 10 pm weekdays, 11 pm weekends).
  • No events/parties; no hunting/ATVs; no music with vulgar lyrics; no trespassing onto adjacent properties (especially for creek access).
  • Trash service with a licensed provider; no on‑street parking.
  • Neighbor contact policy and complaint handling; potential revocation of the CUP for violations.
• The BOA considers neighborhood compatibility, safety, and the feasibility of access/parking when deciding. Denial can occur where adverse impacts are found likely.
• Covenants and deed restrictions: Some subdivisions prohibit “business” uses. The BOA notes that it can approve a CUP only if covenants do not bar the use.

Spencer County (Transient Room Tax)

• A 3% transient room tax applies to rent charged for accommodations (rooms, suites, cabins, campgrounds, RV parks, etc.) and to amounts charged by any person that facilitates the rental (e.g., brokers/platforms). The tax does not apply to stays of 30 days or more.
• Collection and remittance:
  • Operators and facilitators must collect and pay the tax to the Spencer County Treasurer.
  • The Treasurer remits to the Taylorsville–Spencer County Recreation, Tourist and Convention Commission, with funds kept in a separate account.
• Interest accrues on unpaid taxes at the rate provided in KRS 131.183.

State of Kentucky

• Sales tax: 6% on transient accommodations for stays of 29 nights or fewer, including cleaning fees.
• 14‑day tax rule (federal): STR income is not required to be reported for federal income tax if the property is rented for fewer than 14 days total during the tax year. If you rent for 14+ days, you must report the income.
• Reporting STR income: Use IRS Schedule E (Form 1040) to report rental income and deductions. Many hosts submit a W‑9 to platforms (e.g., Airbnb) to avoid 28% withholding, though your actual tax may be lower.
• Business license: Obtain a Kentucky business license through the Division of Revenue before operating.

Taxes that apply to STRs in this market

• Spencer County transient room tax: 3% of rent and facilitation charges; remitted to the Spencer County Treasurer for the Tourism Commission.
• Kentucky sales tax: 6% on total charges for stays ≤ 29 nights, including cleaning fees.
• Federal income tax: Report income if you rent ≥ 14 days per year; use Schedule E (Form 1040) to report income and deductions.

Contact information (local authority for STRs)

• Planning & Zoning Administration (BOA support)
  • Phone: Not provided in the minutes. Contact the Spencer County Judge/Executive office for routing to Planning & Zoning.
  • Mailing address: Fiscal Court meeting room, 28 East Main St., Taylorsville, KY 40071
  • Website: Planning & Zoning contact page (county site; link below)
• Spencer County Treasurer (3% TRT collection/remittance)
  • Phone: Not provided in the source
  • Email: Not provided in the source
  • Address: c/o Spencer County Fiscal Court, 28 East Main St., Taylorsville, KY 40071
  • Website: Spencer County official site (link below)
• Taylorsville–Spencer County Recreation, Tourist and Convention Commission (TRT recipient)
  • Contact via Spencer County Treasurer/fiscal court administration; specific contact not provided in the source
  • Website: County site (link below)

Links to source pages

• County confirms 3% transient room taxes on short‑term rentals (Spencer Magnet, Jan 9, 2025; updated Apr 16, 2025): www.pmg-ky1.com/spencer_magnet/county-confirms-3-transient-room-taxes-on-short-term-rentals/article_8ab42f38-588f-5ddd-aa09-7c9137c21bc1.html
• Board of Adjustment Minutes – Aug 24, 2023 (includes approved STR CUP with conditions at 441 Day Road): mail.spencercountyky.gov/BOA%20MINUTES%20082423.pdf
• Board of Adjustment Minutes – Feb 23, 2023 (includes denied STR CUP at 355 Nature Trail): webgen1files1.revize.com/spencercntyky/Documents/Planning%20Zoning/Commission%20Minutes/Board%20Of%20Adjustment%20Minutes/BOA%20MINUTES%20022323.pdf
• Short‑term rental tax deductions overview (Kentucky specifics on 6% sales tax, 1% transient room tax statewide context; note Spencer County’s 3% TRT is higher): www.singlekey.com/en-us/near-me/kentucky/a-guide-on-short-term-rental-tax-deductions-in-kentucky/
• Spencer County official website (Planning & Zoning contact and county information): www.spencercountyky.gov
• Spencer County Planning & Zoning contact page: mail.spencercountyky.gov/Planning%20Zoning/Commission%20Minutes/Board%20Of%20Adjustment%20Minutes/BOA%20MINUTES%20022323.pdf (official Planning & Zoning contacts are listed on the county’s Planning & Zoning pages)

Notes for investors

• Expect a rigorous public hearing; successful applications are highly tailored to the site and neighborhood.
• Build your application around measurable controls: capped occupancy, defined parking, quiet hours, trash service, and a fast-response complaint protocol.
• Price with the 3% county TRT in addition to Kentucky sales tax in mind;guests will see a combined lodging tax burden of 9% on the rent (6% state sales tax plus 3% county transient room tax).
• If your property is governed by restrictive covenants, resolve those first—zoning approval alone may not be sufficient.