KLC to Petition for Rehearing on Disappointing Airbnb Decision

On June 25, 2026, the Kentucky Supreme Court issued a decision in Airbnb Inc.  v. Kentucky League of Cities, Inc. and Kentucky Travel Industry Association, Inc., 2025-SC-0331 (Ky. June 25, 2026). Striking a blow to small cities that rely upon KLC as an association to champion city needs at the court level, the Kentucky Supreme Court determined in a 4-3 decision that KLC lacked standing to bring a declaratory judgment action as to whether Airbnb was a person who facilitates short-term rentals and thus potentially subject to the local transient room tax.

However, the decision did not address KLC’s and KTIA’s position that Airbnb is responsible to collect and remit transient room taxes for lodging it facilitates in cities across the commonwealth. It was procedural in nature and did not rule upon the underlying legal merits of the case. 

Under the court rules, a party has 20 days from the date of the opinion in which to file a petition for rehearing. KLC will continue its mission to champion our members’ interests at all levels of government, including the courts, and will file a petition for rehearing of the case with the Kentucky Supreme Court.  At the same time, KLC and KTIA are exploring alternative options for litigation, including the potential of having directly impacted members file litigation to ensure the payment of transient room taxes.  Stay alert for more information from KLC regarding those next steps.