Industry Entities Vow to Fight New Kentucky Tax on Business Events in 2023

December 20, 2022

With a looming new 6 percent Kentucky tax on 35 services, including business events, Louisville Tourism, the Exhibitions and Conferences Alliance (ECA) and the Society of Independent Show Organizers (SISO) are voicing strong opposition to the measure, which could be detrimental to the state’s trade show, convention and meeting business. It also would pose an undue burden on event organizers and clients, as the industry continues to recover following the COVID-19 pandemic.

The measure is set to take effect Jan. 1 and apply to many new services that have never been taxed in Kentucky, including meeting room and event space rental, social and event planning and coordination, and many others.

The new tax, which appears to be an attempt to eventually phase out Kentucky’s 5 percent individual income tax over several years, would be implemented for any event held socially, such as trade shows, conventions, conferences, off-site venue events, concerts and weddings, and obviously add a new fee to the already growing cost of doing business, according to Cleo Battle, president and CEO of Louisville Tourism.

“This tax will put Kentucky at a disadvantage in competing for lucrative convention, meeting and event business that drives economic growth throughout the state by making the cost of doing business here more expensive,” Battle said. “This will result in lost business for Kentucky and all its towns and cities that rely on events for economic impact to facilities, lodging, attractions and the many small businesses that depend on convention and event activity.” 

Battle added, “It’s punishment for an industry that has certainly suffered enough and is trying to get back on its feet to support the thousands of jobs that rely on it.” 

Louisville's events business has been heading in the right direction, substantially growing since withstanding pandemic-related losses in 2020 and 2021, according to Battle. In 2019, which was a record year for the destination, it hosted more than 800 events, and in 2021, it hosted 158. This year, Louisville has set the stage for more than 600 events. 

Louisville Tourism is working with its regional, national and global partners, including the Kentucky Travel Industry Association, which Battle said has made the new tax their legislative priority, and will be actively fighting to keep the industry competitive. 

Louisville Tourism also will work to evaluate opportunities on a case-by-case basis to provide offsets for groups looking to book business with the destination. 

While Kentucky Venues, which encompasses the Kentucky International Convention Center and the Kentucky Exposition Center in Louisville, could be highly impacted by the new measure, Spokesperson Ian Cox said its operations will be in compliance with the new tax, and the venues are working closely with new and existing clients to document and share information regarding the change from policymakers. 

Despite the added tax, Cox said Kentucky remains a cost-effective place to do business, and Kentucky Venues is committed to providing exceptional experiences for its clients.

“We are continuing to discuss with each client their specific needs and expectations to help grow their event,” Cox said. 

Meanwhile, Tommy Goodwin, vice president of government affairs for the ECA, a coalition of nine organizations advocating the face-to-face business events industry, called the taxes “troubling,” noting that the alliance condemns all state efforts to tax face-to-face events and that the ECA is working with its industry partners in Kentucky to address the measure with the state legislature.

“The new taxes create a disincentive for hosting future conventions and trade shows in Kentucky,” Goodwin said. “Given how important events are to the economy and jobs in Kentucky, ECA is strongly encouraging the Kentucky legislature to address this important issue as part of its forthcoming 2023 legislative session.”

ECA member organization SISO emphasized its vehement opposition to the tax.

“SISO’s leadership is very much against the new Kentucky sales tax as it has been described to us,” said David Audrain, co-president of ECA, outgoing CEO of SISO and CEO and partner of Exposition Development Company. “The expectation that event organizers will have to start becoming tax collectors for the state of Kentucky by having to add the 6% sales tax onto all exhibitor and attendee fees—from exhibit space and sponsorships to exhibit hall and conference registration fees—will add both a significant cost to our customers and a significant burden to the organizers.”

Audrain added that he is unaware of any other state or city that has implemented a tax on exhibit space and B2B registrations 

The initial reactions from SISO members have not surprisingly been very negative, according to Audrain, and he is already aware of several event organizers who were considering Louisville as a venue and have removed it from their list of prospective destinations as a direct result of the new Kentucky tax law.

“This is unique to Kentucky, and SISO members that I have been talking with have said simply, ‘Why would we choose Kentucky if we don’t have to?’” Audrain said. “This is another example of why the industry needs to advocate for itself as one voice, and we are working on this through the ECA.”

The Kentucky Department of Revenue has not issued formal regulations on the new tax, but limited guidance and FAQs can be found here

According to Louisville Tourism officials, it is their understanding that business events contracted prior to February 2022 will not be affected by the 6 percent tax.

Photo: Louisville skyline

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Partner Voices
Less than six months ago, Lisa Messina joined the Las Vegas Convention and Visitors Authority (LVCVA) as the first-ever chief sales officer after leading the sales team at Caesars Entertainment. A 12-year Las Vegas resident, Messina is a graduate of Cornell University’s School of Hotel Administration and serves on MPI International’s board of directors. TSNN had a chance to catch up with this dynamic leader and talk to her about her vision for the new role, current shifts in the trade show industry, creating more diversity and equity within the organization, and advice to future female leaders. Lisa Messina, Chief Sales Officer, LVCVA With Las Vegas becoming The Greatest Arena on EarthTM, what are some of the things you’re most excited about in your role? Our team was at The Big Game’s handoff ceremony earlier this month, and I couldn’t help but think, “We’re going to crush it next year!”  These high-profile events and venues not only drive excitement, but also provide unmatched opportunities for event planners. Allegiant Stadium hosts events from 10 to 65,000 people and offers on-field experiences. Formula 1 Grand Prix will take place in Las Vegas in November, after the year-one F1 race, the four-story paddock building will be available for buyouts and will also offer daily ride-along experiences that will be available for groups. And, of course, the MSG Sphere officially announced that it will open in September, ahead of schedule, with a U2 residency. It’s going to be the most technologically advanced venue as far as lighting, sound, feel, and even scent, and it will be available for buyouts and next-level sponsorships inside and outside. There’s no ceiling to what you can do when you’re doing events in Las Vegas.  Allegiant Stadium As the trade show and convention business returns to the pre-pandemic levels, what shifts are you noticing and how do you think they will impact the industry going forward? Our trade show organizers are very focused on driving customer experience. Most of our organizers are reporting stronger exhibitor numbers and increased numbers of new exhibitors, with trade shows proving to be almost or above 2019 levels. Now our organizers are really doubling down on driving attendance and focusing on the data to provide that individualized, customized experience to help attendees meet their goals and get the best value. Some companies continue to be cautiously optimistic with their organizational spend when it comes to sending attendees, but I think it will continue to improve. As the U.S. Travel Association makes more progress on the U.S. visa situation, we also expect a growing influx of international attendees. What are some innovative ways the LVCVA helps trade show and convention organizers deliver the most value for their events? We focus on customer experience in the same way that trade show organizers are thinking about it. We got rave reviews with the West Hall Expansion of the Las Vegas Convention Center (LVCC), so over the next two years, we will be renovating the North and the Central halls, which will include not just the same look and feel, but also the digital experiences that can be leveraged for branding and sponsorship opportunities.  Vegas Loop, the underground transportation system designed by The Boring Company, is also a way we have enhanced the customer experience. Vegas Loop at the LVCC has transported more than 900,000 convention attendees across the campus since its 2021 launch. Last summer, Resorts World and The Boring Company opened the first resort stop at the Resorts World Las Vegas , with plans to expand throughout the resort corridor, including downtown Las Vegas, Allegiant Stadium and Harry Reid International Airport. The LVCVA also purchased the Las Vegas Monorail in 2020, the 3.9-mile-long elevated transportation system that connects eight resorts directly to the convention center campus. This is the only rail system in the world that integrates fares directly into show badges and registration. For trade show organizers, these transportation options mean saving time, money and effort when it comes to moving groups from the hotels to LVCC and around the city. Also, the more we can focus on building the infrastructure around the convention center, the more it supports the customer experience and ultimately supports our trade show organizers. Scheduled to debut in Q4, Fontainebleau Las Vegas will offer 3,700 hotel rooms and 550,000 square feet of meeting and convention space next to LVCC.  What are some of the plans for advancing DEI (diversity, equity and inclusion) within your organization? We’re currently partnering with instead of working with a leading consulting firm, to lay the foundation and create a solid DEI plan and be the leader when it comes to DEI initiatives. The heart of that journey with the consulting firm is also talking to our customers about their strategic approaches to DEI and driving innovation in this space.  What are your favorite ways to recharge? My husband and I have an RV and we’re outdoorsy people. So, while we have over 150,000 world-class hotel rooms and renowned restaurants right outside our doorstep, one of my favorite things to do is get out to Red Rock Canyon, the Valley of Fire, and Lake Mead. Five of the top national parks are within a three-hour drive from Las Vegas, so there’s a lot you can do. We love balancing the energy of Las Vegas with nature, and we’re noticing that a lot of attendees add activities off the Strip when they come here.  Valley of Fire What advice would you give to women following leadership paths in destination marketing? I think it’s about being laser-focused on what you want to accomplish; building a team around you that lifts you and helps you achieve your goals; and being humble and realizing that you do it as a group. No one gets this done alone. Thankfully, there are a lot of women in leadership in this organization, in our customers’ organizations, and in this city that we can be really proud of. We’re a formidable force that is making things happen.   This interview has been edited and condensed. This article is exclusively sponsored by the Las Vegas Convention & Visitors Authority. For more information, visit HERE.