KANSAS CITY, Mo. — The Kansas City's Auditor Office released an audit this week, claiming the city missed out on millions in taxes and fees related to short term rentals.
The city said it is unable to collect the convention and tourism tax and hotel/motel occupancy fee due to the definition of a hotel in state statutes and city ordinances.
“That is the limiting definition,” said Douglas Jones, KCMO's City Auditor. "That’s why we can’t collect it and why other cities can.”
From July 2021 to August 2022, the auditor’s office estimates there was a loss of $2.28 million from the 7.5% C&T tax and $353,600 from the hotel, motel occupancy fee of $1.50 for each used room.
The auditor’s office recommends the city should keep pushing for changes in the state statute language and consider an occupancy fee for short term rentals, separate from the current fee.
“This is really about making sure we have equity in our taxing a fee structure,” Jones said. “You’ve got parts of the accommodation industry that are not paying this fee or the tax and those taxes and fees help pay for Kansas City’s tourism activities.”
During recent coverage of Kansas City’s rental market, neighbors voiced their concerns about safety and density.
“We’ve done a great job of trying to connect neighbors with neighbors,” Laura Burkhalter said. “That’s why the short-term rental thing is such a bugaboo with me because we can’t connect them if nobody is there.”
When KSHB 41 met with Burkhalter after reading through the most recent audit, her concerned loomed.
“It really addresses the loss of potential revenue from the city, but it does not go to the next step of looking at how this is impacting neighborhoods,” she said. “At this point it seems to be profitable only for the property owner. The nuisance and problems that are associated with it are all carried, that burden is all carried by the neighborhoods and the city.”
Jones said part two of their audit will focus on compliance and permitting. They hope to release their findings in the next week or two.
Burkhalter and other neighborhood leaders from throughout the city met virtually to discuss their suggestions with city council.
They expect to have recommendations in writing for their respective councilmembers before the end of the year.
“People love the neighborhoods in Kansas City and we want them to be able to afford to live here,” Burkhalter said. “If this is what it takes to make it happen or one step in the right direction we need to be doing it.”
The public can submit their own ideas for city-wide audits online.
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