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

Yes, short-term rentals are explicitly allowed in Shelbyville, KY. Short-term rentals are defined as "a dwelling, unit, or room that is rented, leased, or assigned for a tenancy of less than thirty (30) consecutive days in duration including tourist and guest homes." However, both county and city-level regulations apply, and investors must comply with specific licensing, tax, and zoning requirements.

How to Start a Short-Term Rental Business in This Market

Step 1: Determine Jurisdiction and Obtain Business License

Location determines your licensing requirements:

• Within Shelbyville city limits: Register with City of Shelbyville Occupational License Office
• Within Simpsonville city limits: Register with both City of Simpsonville AND Shelby County Occupational License Office
• Unincorporated Shelby County (outside both cities): Register with Shelby County Occupational License Office only

Business License Process:

• Application fee: $75
• Submit application in person or by mail to the appropriate jurisdiction
• Contact: rusty.newton@shelbycoky.com or 419 Washington Street, Shelbyville, KY 40065

Step 2: City of Shelbyville Specific Requirements

For properties within Shelbyville city limits, you must:

1. Complete the Short-Term Rental Application ($500 application fee)
2. Obtain approval from Triple S Planning & Zoning Official
3. Receive final license issuance from City of Shelbyville Official
4. Comply with City Ordinance No. 2025-03-20

Required Documents, Permits, and Licenses

Business License (All Locations)

• Business license application ($75)
• Payment of applicable fees

City of Shelbyville STR Permit Requirements

Required documents prior to processing:

• Property Owner Deed
• Safety Inspection Form
• Certificate of Insurance
• Sketched Floor Plan (with dimensioned room layout)
• Occupational License & Transient Tax Information Brochure (must be provided to guests)
• Site Plan/Survey (showing maximum number of vehicles that can be legally parked)

Application Information Required:

• Applicant/Primary Owner name and contact information
• Emergency contact (must live within 20 miles of rental property)
• Property address, number of bedrooms, maximum occupants

Specific Regulations for Short-Term Rentals

County-Level Regulations (Shelby County)

Zoning and Occupancy Requirements:

• Rented rooms cannot function as second dwelling units
• Living areas and kitchen facilities must be shared among all occupants
• Maximum limit of five unrelated individuals per dwelling unit (includes renters and other occupants)
• Must adhere to all local, state, and federal ordinances

Tax Obligations:

• 3% local transient room tax
• 1% local conference center tax (as per updated guide)
• 6% sales tax on taxable amounts
• 1% state transient room tax (as per original guide)

Platform-Specific Requirements:

• Kentucky House Bill 8 (effective January 1, 2023) requires online platforms to report and pay local taxes
• Important: Airbnb currently does not comply with local tax remittance requirements and does not submit payments directly to Shelby County
• Property owners using Airbnb are individually responsible for reporting and paying local taxes monthly

City of Shelbyville Specific Regulations

• Must comply with City Ordinance No. 2025-03-20
• Maximum occupancy limits enforced through application process
• Safety inspection required
• Floor plan and site plan requirements for parking

Tax Calculation Example

For a $100 rental rate:

• 3% Local Transient Room Tax: $3.00
• 1% State Transient Room Tax: $1.00
• Taxable Amount: $104.00
• 6% Sales Tax: $6.24
• Total Customer Charge: $110.24

Additional Compliance Considerations

Insurance:

• Review and update insurance policies to cover injuries, accidents, or losses from renters
• Consult with insurance agent for appropriate coverage

Property Considerations:

• Get landlord's written approval if renting the property
• Review property deed for restrictive covenants
• Consider occupancy agreements for liability protection

Neighbor Relations:

• Maintain good relationships with neighbors
• Introduce yourself and share contact information
• Be mindful of disturbances to avoid citations or fines

Contact Information

City of Shelbyville

Occupational License Office:

• Address: 315 Washington Street, Shelbyville, KY 40065
• Phone: (502) 633-8000
• Website: www.shelbyvillekentucky.com

For Short-Term Rental Applications:

• Same address and phone as above

Shelby County Occupational License Office

• Address: 419 Washington Street, Shelbyville, KY 40065
• Phone: (502) 633-7685
• Email: rusty.newton@shelbycoky.com

Triple S Planning and Zoning Commission

• Phone: (502) 633-1718
• For zoning questions and approvals

City of Simpsonville (if applicable)

• Address: 108 Old Veechdale Road, Simpsonville, KY 40067
• Phone: (502) 722-8110

Links to Source Pages

• Shelby County Short-Term Rental Guide (Updated)
• Shelby County Short-Term Rental Guide
• City of Shelbyville Short-Term Rental Application

Disclaimer: This guide is intended to supplement information provided by short-term rental companies and is not a substitute for legal advice. Property owners must verify all information and comply with all applicable regulations, whether governmental or private. The information provided is believed to be accurate as of the source date, but regulations may change.