Avalara MyLodgeTax > Blog > State and Local News > Orange Beach, Alabama, bans short-term rentals

Orange Beach, Alabama, bans short-term rentals

  • Apr 17, 2018 | Jennifer Sokolowsky

The city council of Orange Beach, Alabama, has passed a new law that prohibits short-term vacation rentals of less than two weeks in single-family residential properties.

The city will create a new vacation rental license for owners who want to rent their properties out for 14 days or more at a time. Current holders of short-term rental licenses will be grandfathered in under the new law, but when that license expires, they’ll be required to apply for the new vacation rental license, which will cost $500 per year.

The law will not apply to condominiums or properties outside of residential zones.

In passing the new rules, officials cited problems with noise, trash, parking, and crime from short-term rentals in residential neighborhoods. The city had passed a six-month moratorium on new short-term rental licenses in December to give officials time to draft the new ordinance.

Last fall, Orange Beach raised its lodging tax 2 percent for a total of 13 percent, among the highest level in the immediate coastal region. The new rate goes into effect May 1.

Short-term rental owners are required to collect lodging taxes from their guests and pass it on to tax authorities. For Orange Beach short-term rental operators who book through Airbnb, the rental platform automatically collects all state, county, and city lodging taxes. However, operators who use other rental platforms must collect and file lodging taxes themselves. MyLodgeTax can help short-term rental hosts manage lodging taxes.

In 2017, Alabama generated $1.4 million in lodging tax revenue from Airbnb. Alabama residents made nearly $7 million from hosting on Airbnb in 2016.

Orange Beach is not the only community in the Alabama to restrict short-term rentals. Mountain Brook banned all rentals of fewer than 30 days last fall, and in 2016, Homewood banned all short-term rentals.

Lodging tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Avalara Author
Jennifer Sokolowsky
Avalara Author Jennifer Sokolowsky
Jennifer Sokolowsky writes about tax, legal, and tech topics. She has an extensive international background in journalism and marketing, including work with The Seattle Times, The Prague Post, Avvo, and Marriott.