Alabama Short-Term Rental Laws & Hotel Tax (2026)

State license required

Yes

Latest rule change

Sep 15, 2026

The laws in brief

Who needs it

Rental owners in cities that license short-term rentals, including Gulf Shores, Orange Beach, Mobile, Huntsville, Auburn and Dauphin Island. Birmingham has no short-term rental permit yet, and Montgomery adopted a registration ordinance on September 1, 2026.^{2,10,12,14,15,16}

Issued by

City and town revenue departments; the Alabama Department of Revenue for lodgings tax accounts (My Alabama Taxes)

Valid for

Gulf Shores, Orange Beach and Dauphin Island business licenses expire on December 31 each year, and renewals made by January 31 avoid penalty.

Processing

Huntsville routes business license applications to city departments, which may take up to 10 business days.

On listings

No number needed on listings

Platform checks

Airbnb collects and remits Alabama lodging taxes from September 15, 2026. Mobile requires its business license number in every advertisement or listing.

Fees

Who qualifies

• Gulf Shores: Planning & Zoning reviews the application for zoning compliance and the Fire Marshal performs a safety inspection where applicable
• Huntsville: zoning must allow the use, and short-term rentals are generally not permitted in most residential zoning districts
• Auburn: owner-occupied homestays need a home occupation permit and non-primary rentals need a zoning certificate, then a short-term rental business license
• Mobile: the applicant must own the property or hold the owner's completed designation of agent form
• Dauphin Island: all new rentals need Planning Commission approval

How to apply

1. 1 Confirm that the city or town allows short-term rental at the address: Huntsville's Zoning Administration, Auburn's interactive map and Orange Beach's vacation rental map show where.
2. 2 Apply for the city business license through the local portal or revenue office, such as Gulf Shores' online licensing portal, Orange Beach's OpenGov portal or Dauphin Island's Citizenserve portal.
3. 3 Register a state lodgings tax account on My Alabama Taxes for bookings that no platform taxes, and ask each county and city whether it collects its own lodging tax.
4. 4 Renew the license each January.

Permit rules

Cities license short-term rentals under their own codes

Alabama cities regulate short-term rentals through their business license and police powers; Mobile's ordinance, for example, rests on its police power and licensing power under state law.²

State lodgings tax account for bookings no platform taxes

A host whose bookings all go through a platform that remits every state and local lodging tax does not need a state or local lodgings account; a host who also books guests directly must hold both and file returns.⁸

Platforms must collect lodging tax

Under the Alabama Tourism Tax Protection Act (Act 2024-334), accommodations intermediaries such as booking platforms must collect and remit the state lodging tax and parallel local levies on bookings made on or after January 1, 2025.^6,7 In force since January 1, 2025

A platform may pass collected tax back to the host

When a written agreement has the platform pass the collected taxes to the host to remit, the platform is not liable for taxes the host fails to remit, so hosts should check who remits on each platform.^6,7 In force since January 1, 2025

Airbnb collects state, county and listed city taxes

From September 15, 2026 Airbnb collects and remits the 4% to 5% state lodging tax, county and municipal taxes collected by the state, and local taxes it lists for Lee County, Auburn, Birmingham, Gulf Shores, Mobile, Montgomery, Opelika, Orange Beach and Tuscaloosa; hosts handle every other tax obligation.¹⁹ Applies to: Airbnb bookings · In force since September 15, 2026

Gulf Shores: business license for every rental owner

Every property owner who rents in Gulf Shores' city limits or police jurisdiction applies for a business license; short-term rentals pay a $45 rental fee, the license expires December 31 and renewals are delinquent after January 31.¹⁰ Applies to: Gulf Shores

Orange Beach: the owner holds the business license

An Orange Beach owner needs a business license to rent a condo or house even when a management company handles the rental.¹² Applies to: Orange Beach

Mobile: license number on every listing

A valid City of Mobile business license number must appear on any advertisement or listing for a short-term rental, which Mobile defines as a rental of under 30 consecutive days.² Applies to: Mobile

Huntsville: business license for any short-term rental

Anyone renting a property short-term in Huntsville, including listings on Airbnb and VRBO, needs a city business license after the Zoning Administration confirms the use.¹⁴ Applies to: Huntsville

Auburn: permit first, then a business license

An Auburn operator first obtains the home occupation permit or zoning certificate and then applies for a short-term rental business license from the Revenue Office.¹⁵ Applies to: Auburn

Dauphin Island: annual rental license and Planning Commission approval

Dauphin Island requires an annual rental license for each rental property, whether managed by the owner or an agent, and new rentals need Planning Commission approval; the 2026 fee is $135 for gross receipts under $50,000.¹⁶ Applies to: Dauphin Island · In force since January 1, 2026

Orange Beach: vacation rentals in mapped residential districts

Orange Beach defines a vacation rental as a one- or two-family dwelling rented for 14 consecutive days or less and regulates vacation rentals in certain residential districts shown on a city map.¹¹ Applies to: Orange Beach

Huntsville: generally not allowed in residential districts

Huntsville treats short-term rentals like motels under its zoning, so they are generally not permitted in most residential zoning districts.¹⁴ Applies to: Huntsville

Auburn: homestay or non-primary rental

Auburn separates a homestay, rented in the owner's permanent residence under a home occupation permit, from a short-term non-primary rental of a whole home for under 30 consecutive days, which needs a zoning certificate.¹⁵ Applies to: Auburn · In force since March 16, 2021

Tuscaloosa: caps on multi-family rental licenses

Tuscaloosa limits how many licenses it grants for short-term rentals in multi-family buildings, and homes in its historic districts need a special exception from the Zoning Board of Adjustment.¹⁸ Applies to: Tuscaloosa

1. 1. Gulf Shores

   Baldwin County

   Every property owner who rents in Gulf Shores' limits or police jurisdiction applies for a business license, and short-term rentals pay a $45 rental fee. Licensees keep a local emergency contact, pass a safety inspection every three years, and Airbnb collects the 10% city lodging tax (5% in the police jurisdiction).^10,19

   • Business license for all rental owners; $45 rental fee for short-term rentals
   • License expires December 31; renewals delinquent after January 31
   • Local emergency contact and a rental safety inspection every 3 years
   • Lodging tax 10% (5% in the police jurisdiction), collected by Airbnb

2. 2. Orange Beach

   Baldwin County

   Orange Beach regulates vacation rentals, one- or two-family dwellings rented 14 consecutive days or less, in certain residential districts shown on a city map. The owner holds the business license even when a manager books the stay, and the lodging tax totals 16%.^11,12

   • Vacation rental: a one- or two-family dwelling rented 14 consecutive days or less
   • Allowed in mapped residential districts under Ordinance 2018-1283
   • Owner, not the management company, holds the business license
   • Lodging tax 16%: 10% city, 4% state, 2% Baldwin County

3. 3. Birmingham

   Jefferson County

   Birmingham has no short-term rental permit yet: the city is reviewing zoning for rentals, and a proposed permit ordinance advanced from the Committee of the Whole on September 30, 2026, with a full council vote scheduled for October 27. Airbnb collects a 6.5% city tax plus $3 per room per night.^17,19,20

   • Proposed ordinance would create a permitting system; council vote scheduled October 27, 2026
   • City zoning review for short-term rentals is under way
   • Lodging and hotel tax 6.5% plus a $3 per room per night fee, collected by Airbnb

4. 4. Dauphin Island

   Mobile County

   Dauphin Island requires an annual rental license for each rental property, $135 for 2026 at gross receipts under $50,000, and Planning Commission approval for new rentals. Short-term rental overlay districts set minimum stays of two or three nights, and a safety inspection is required every three years.¹⁶

   • Annual rental license; 2026 fee $135 under $50,000 gross receipts
   • New rentals need Planning Commission approval
   • Minimum stay 3 nights in STROD1 and STROD2, 2 nights in STROD3
   • Safety inspection every 3 years from January 1, 2026

5. 5. Mobile

   Mobile County

   Mobile treats a rental of under 30 consecutive days as a business that needs a city business license, shown on every listing. Licensees carry $1,000,000 of liability coverage, pass an inspection and name a 24-hour local contact; the lodging tax is 10% inside the city and 5% in the police jurisdiction.^2,13,19

   • Business license number on every advertisement or listing
   • Proof of $1,000,000 liability and personal injury coverage
   • Smoke and CO detectors, fire extinguisher per floor, inspection before licensing
   • Lodging tax 10% (5% in the police jurisdiction) since June 1, 2025

6. 6. Huntsville

   Madison County

   Huntsville requires a city business license for any short-term rental, including Airbnb listings, and treats rentals like motels under its zoning, so they are generally not permitted in most residential districts. The city lodging tax is 9% plus a $2 per room per night surcharge, filed through the state's OneSpot portal.¹⁴

   • City business license after zoning is confirmed; review may take up to 10 business days
   • Generally not permitted in most residential zoning districts
   • Lodging tax 9% plus $2 per room per night surcharge
   • Short-term means stays of 179 days or less

7. 7. Montgomery

   Montgomery County

   The Montgomery City Council adopted Ordinance No. 29-2026 on September 1, 2026, establishing requirements, prohibitions and procedures for establishing, managing, maintaining and registering short-term rentals. Airbnb collects an 11% transient room tax (5.5% in the police jurisdiction).^3,19

   • Ordinance No. 29-2026 adopted September 1, 2026 sets registration and operating requirements
   • Transient room tax 11% (5.5% in the police jurisdiction), collected by Airbnb

8. 8. Auburn

   Lee County

   Auburn regulates two kinds of short-term rental: a homestay in the owner's permanent residence under a home occupation permit, and a non-primary rental of under 30 consecutive days under a zoning certificate. Both then need a short-term rental business license; Airbnb collects a 7% city tax and a 2% Lee County tax.^15,19

   • Homestay: home occupation permit in the owner's permanent residence
   • Non-primary rental (under 30 consecutive days): zoning certificate
   • Short-term rental business license from the Revenue Office after the permit
   • Lodging tax 7% city and 2% Lee County, collected by Airbnb

What the host still handles

• A state lodgings tax account on My Alabama Taxes for bookings that no platform taxes; returns are due by the 20th of the following month
• Local lodging tax accounts with each county and city that administers its own tax (the Department of Revenue advises contacting every county and municipality where you do business)
• A city business license where required, as in Gulf Shores, Orange Beach, Mobile, Huntsville, Auburn and Dauphin Island
• The annual report of addresses rented more than 14 days, filed by April 20, for providers with a lodgings tax account^4,5,8,12,19

The short-term threshold differs by city

The state lodgings tax applies to stays under 180 days. Gulf Shores, Huntsville and Dauphin Island treat 179 days or fewer as short-term, Mobile and Auburn use under 30 consecutive days, and Orange Beach defines a vacation rental as 14 consecutive days or less.^{4,11,14,15,16}

Annual report of addresses rented more than 14 days

Accommodations providers and intermediaries file an electronic report by April 20 each year listing the address of every accommodation rented or furnished for more than 14 days in the previous year; the first report was due April 20, 2026.^6,7 Applies to: Hosts with a lodgings tax account and platforms · In force since February 14, 2025

Gulf Shores: local emergency contact and safety inspection

Gulf Shores licensees must designate a local emergency contact and pass a rental safety inspection every three years.¹⁰ Applies to: Gulf Shores

Mobile: $1,000,000 of liability coverage

Mobile short-term rental licensees show proof of at least $1,000,000 of liability and personal injury coverage, through a homeowner's policy rider or a commercial policy, when the license is issued or renewed.² Applies to: Mobile

Mobile: detectors, extinguisher and inspection

Mobile short-term rentals need working smoke and carbon monoxide detectors and a 2.5 lb. fire extinguisher on each floor, and an inspection precedes each license issue or renewal.² Applies to: Mobile

Mobile: 24-hour local responsible party

A Mobile short-term rental posts the name and telephone number of a local responsible party inside the unit, and that person answers calls around the clock during each rental.² Applies to: Mobile

Dauphin Island: minimum stays in overlay districts

Dauphin Island's short-term rental overlay districts require minimum stays of three nights in STROD1 and STROD2 and two nights in STROD3.¹⁶ Applies to: Dauphin Island

Dauphin Island: safety inspection every three years

Dauphin Island requires a safety inspection by a qualified or licensed inspector once every three years, beginning January 1, 2026, and the rental must post emergency, occupancy and parking information.¹⁶ Applies to: Dauphin Island · In force since January 1, 2026

• A city or town may fine an ordinance violation, such as renting without a required business license, up to $500, with imprisonment of no more than six months.¹
• Late state lodging tax: a penalty of 10% of the tax not paid by the due date, the 20th of the month after the rentals.^5,9
• Huntsville: operating a short-term rental without a city business license is against the law, including listings on Airbnb, VRBO and HomeAway.¹⁴
• Gulf Shores: doing business without a license is unlawful under Section 8-19 of its Code of Ordinances.¹⁰

1. October 27, 2026 Proposed
   Birmingham City Council vote on a short-term rental ordinance

   The Committee of the Whole advanced a proposed permit ordinance by a 4-1 vote on September 30, 2026, and the full council was scheduled to take it up on October 27; the city is reviewing zoning for short-term rentals separately.^17,20

2. September 15, 2026
   Airbnb's Alabama tax collection list takes effect

   From September 15, 2026 Airbnb collects and remits the state lodging tax, the county and municipal taxes collected by the state, and the local taxes it lists for nine jurisdictions.¹⁹

3. September 1, 2026
   Montgomery adopts a short-term rental registration ordinance

   The Montgomery City Council adopted Ordinance No. 29-2026 on September 1, 2026, establishing requirements, prohibitions and procedures for establishing, managing, maintaining and registering short-term rentals.³

4. April 20, 2026
   First annual report of rented addresses due

   Providers and platforms filed the first annual informational report on addresses rented more than 14 days by April 20, 2026.⁷

5. June 1, 2025
   Mobile raises its lodging tax to 10%

   The City of Mobile's lodgings tax rose from 8% to 10% inside the city limits (one-half of that in the police jurisdiction) under an ordinance the Mobile City Council adopted on March 11, 2025.^13,19

6. February 14, 2025
   Department of Revenue rule on platform collection and reporting

   Rule 810-6-5-.22.01, published December 31, 2024, took effect February 14, 2025 and sets the collection, written-agreement and annual report requirements.⁷

7. January 1, 2025
   Platforms collect lodging tax statewide

   Accommodations intermediaries began collecting and remitting the state lodgings tax and parallel local levies for transactions on or after January 1, 2025.^6,7

8. October 1, 2024
   Alabama Tourism Tax Protection Act takes effect

   Governor Ivey signed Act 2024-334 on May 9, 2024; the act took effect October 1, 2024 and requires platforms to collect state and local lodging tax on bookings from January 1, 2025.⁶

Estimate what a home could earn

1. 1. Code of Alabama Section 11-45-9: Penalties which may be imposed for violations of ordinances · Alabama Legislature
2. 2. Ordinance 34-2020: Short-term lodging or rentals (Chapter 34, Mobile City Code) · City of Mobile
3. 3. Code of Ordinances: Adopted Ordinances Not Yet Codified (Ordinance No. 29-2026) · City of Montgomery, Alabama (Municode)
4. 4. Transient Occupancy (Lodgings) Tax · Alabama Department of Revenue
5. 5. Lodgings Tax FAQ · Alabama Department of Revenue
6. 6. Notice: Alabama Tourism Tax Protection · Alabama Department of Revenue
7. 7. Rule 810-6-5-.22.01 Collection and Reporting Requirements for Accommodations Intermediaries and Accommodations Providers · Alabama Department of Revenue
8. 8. How do I report lodging tax if the lodging transactions were made through a third party platform/facilitator? · Alabama Department of Revenue
9. 9. Rule 810-14-1-.30 Penalty For Failure To Timely Pay Tax · Alabama Department of Revenue
10. 10. Rental License · City of Gulf Shores
11. 11. Vacation Rental Regulations · City of Orange Beach
12. 12. Finance Department FAQs · City of Orange Beach
13. 13. Mobile lodgings tax rate change, effective June 1, 2025 · Alabama Department of Revenue
14. 14. Short Term Rentals · City of Huntsville
15. 15. Short Term Rentals · City of Auburn
16. 16. Business Licenses & Permits (rental licenses) · Town of Dauphin Island
17. 17. City of Birmingham Zoning Ordinance (Short Term Rentals) · City of Birmingham, Alabama
18. 18. Short-Term Rentals · City of Tuscaloosa
19. 19. Occupancy tax collection and remittance by Airbnb in Alabama · Airbnb Help Center
20. 20. Birmingham moves closer to regulating short-term rentals · WBHM