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Alabama DOR Clarifies Lodgings Tax Requirements

  • Nov 25, 2014 | Gail Cole

 Do you owe Alabama lodging taxes?

The Alabama Department of Revenue has seen a need to clarify lodgings tax requirements. To that end, it has issued a reminder about lodgings tax that should clear up “some misunderstandings and unwelcome audit findings.”

Alabama lodgings tax must be collected “by all persons engaged in the business of renting or furnishing rooms or other accommodations in any hotel, motel, rooming house, apartment house, lodge, inn, tourist cabin, tourist court, tourist home, camp, trailer court, marina, convention center, or any other place where rooms, apartments, cabins, sleeping accommodations, mobile home accommodations, recreational trailer parking accommodations, boat docking accommodations, or other accommodations” made available to travelers, tourists, or other transients.” If someone in the Department of Revenue discovers something that is used for lodging and not already on this weighty list (Treehouse? Submarine?), you can bet it will be added.

Lodgings tax also applies to “any private home, cabin, or room that might temporarily be rented out to a motorist, transient or traveler for a short period of time.”

Exceptions

The lodgings tax does not apply to organizations, nonprofit or privately operated, that are supplying lodging “primarily for the benefit of, and in connection with, recreational or educational programs for children, students, or members or guests or other nonprofit organizations during any calendar year.”

Lodgings tax does not apply to continuous stays of 180 days or more, so long as the stay is indeed continuous for 180 days. Checking out and then checking back in at any point during the 180 days nullifies the exemption. Lodging tax should therefore be collected at check in and it can be refunded at a later date if the lodging is rented continuously for at least 180 days.

Government employees qualify for an exemption from lodgings tax when their employer (a government agency) pays for the lodging directly. When employees pay for their lodging themselves they must pay the tax, even if they are later reimbursed by a government agency.

Airbnb

There has been a lot of press recently about Airbnb and similar organizations, which are changing the nature of the lodging industry and making it easy for people to rent one room in their house for any period of time. States are responding by adapting their lodging tax regulations.

In some states, lodgings taxes apply to charges when lodging is supplied for more than a certain number of days. For example, in Vermont, Meals and Rooms Tax applies to charges for sleeping accommodations “if those rentals total fifteen (15) or more days in any one calendar year.” You don’t need to collect if you rent lodging for less than 15 days.

The Alabama notice lists no minimum rental period. If you charge a guest for lodging one night a year, you could be held liable for the lodgings tax.

Read the lodgings tax notice in full for additional information.

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Sales 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.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.