Alabama does not license short-term rentals at the state level. There is no statewide registration, no permit, no central database of operators. What the state does require is tax, and what your city requires is entirely up to your city.
That single fact shapes almost everything about hosting here. A property in Fort Morgan and a property twelve miles up the road in Gulf Shores operate under completely different rules, carry different costs, and answer to different inspectors. Multiply that across the Gulf Coast, the lakes, the Tennessee Valley, and the college towns, and you get a regulatory map that almost nobody sees in full.
Here is where things stand as of August. For the current version of any of this, along with direct links to city ordinances and tax authorities, ALSTRA maintains a regulations page at https://alabamastra.org/regulations/ — worth a bookmark, because these rules move.
What the state asks of every host
The state lodging tax applies to any accommodation rented for fewer than 180 continuous days. The rate is 4% across most of Alabama and 5% in the sixteen-county Alabama Mountain Lakes region of North Alabama, which includes Madison, Marshall, and DeKalb counties. It applies to the full amount you charge the guest, cleaning and pet fees included.
Hosts register through the My Alabama Taxes portal and file by the 20th of each month, with quarterly, semi-annual, or annual filing available at lower liability levels. Many state-administered county and city lodging taxes ride along on the same return, and there is a discount for paying on time.
Since January 1, 2025, the Alabama Tourism Tax Protection Act has required booking platforms to collect and remit state lodging tax on the transactions they process, along with annual property reporting from both platforms and owners. Airbnb has been collecting Alabama state lodging tax since 2016.
The trap is what the platforms do not collect. Self-administered and Avenu-administered local taxes are still your responsibility. If you take direct bookings, or you operate in Gulf Shores, Orange Beach, Foley, Alexander City, Guntersville, or Mentone, you need to be registered and remitting those local taxes yourself. Assuming the platform has it handled is one of the more expensive mistakes a new host in Alabama can make.
One more state-level item: short-term rentals held in an LLC or corporation are subject to Alabama’s Business Privilege Tax, but as of the 2024 tax year, entities owing $100 or less are fully exempt and do not need to file. That covers most single-property LLCs.
Our regulations page has the full state tax breakdown with links to the Department of Revenue, the MAT portal, a rate lookup tool, and the platform collection policies for Airbnb and Vrbo: alabamastra.org/regulations
The coast
Gulf Shores requires an annual city Rental License at $45 per unit plus a gross-receipts business license fee. Licenses expire December 31 and go delinquent after January 31. You need a designated 24-hour local emergency contact, lodging tax registration, and a Fire Marshal life-safety inspection every three years covering detectors, extinguishers, and egress. In single-family and duplex areas, short-term rentals are confined to a tourist-rental overlay district, and the city has temporarily paused new licenses in R-3 and R-4 multi-family districts while it rewrites the zoning ordinance. Total lodging tax inside city limits is 16%.
Orange Beach requires an annual city business license, with renewals due January 31. The 2018 vacation rental ordinances prohibit rentals of 14 days or less in the RS-1, RS-2, RS-3, and Mobile Home Subdivision districts, with an exception for the Beach Overlay District along the Gulf front. Condos, multi-family, and commercial districts are generally unaffected. The city publishes a zoning map, and checking it before you buy or list is worth the ten minutes. Total lodging tax is 16%.
Fort Morgan and unincorporated Baldwin County remain the least-regulated stretch of the Alabama coast. No county permit, no rental license, no short-term rental zoning restrictions. Operators owe 6% total lodging tax, registered and remitted through My Alabama Taxes. Watch for parcels that fall inside the Gulf Shores police jurisdiction, where city PJ taxes can apply. Beach programs like Leave Only Footprints and the Share the Beach sea turtle guidelines apply to your guests.
Dauphin Island requires an annual town rental license with tiered fees running roughly $135 to $235 depending on gross receipts. The Short-Term Rental Overlay Districts set minimum stays of three consecutive nights in STROD1 and STROD2 and two nights in STROD3. Safety inspections are required every three years, and as of 2026 those must come from certified inspectors. Units must post the local emergency contact, occupancy and vehicle limits, the Good Neighbor Policy, trash schedules, and rip current safety information. Total lodging tax is 13%.
Foley wants two things: a city business license for the operator and a separate Short-Term Rental Permit for each property, both handled through the Citizenserve portal. Each unit needs a designated responsible party, shared with police and fire, and a fire inspection before the permit issues. Renewals run annually through the Revenue Department. Total lodging tax is 11%, and the city portion is self-administered.
The cities
Birmingham is the one to watch. There is no short-term rental permit program right now. Operators need a standard city business license and city lodging tax registration at 6.5% plus $3.00 per room per night, on top of 4% state and 7% Jefferson County. But the City Council has been working on a comprehensive short-term rental ordinance throughout 2025 and 2026. Draft provisions have included single-family zone restrictions, density caps, and spacing requirements. It was tabled in committee in March 2026 and has not been resolved. Birmingham hosts should be paying close attention, and this is a priority advocacy front for ALSTRA.
Huntsville treats short-term rentals of 179 days or less as hotels under its zoning ordinance, which means they are not permitted in most residential districts. Getting legal takes three steps: zoning verification with Zoning Administration, then a city business license through Finance, renewed annually. The city actively enforces against unlicensed operators. City lodging tax is 9% plus $2.00 per room per night, filed through ONE SPOT, on top of the 5% Mountain Lakes state rate and 1% county.
Mobile has required an annual city business license for rentals under 30 days since Ordinance 34-2020 took effect in January 2021. The application includes a notarized safety affidavit, proof of insurance at $1 million minimum liability or a homeowner’s rider that expressly covers short-term rentals, and a floor plan showing safety equipment. Ongoing requirements include smoke and CO detectors, operable bedroom egress windows, a fire extinguisher on each floor, a visible 911 address, a posted 24/7 local responsible party, and the license number on every listing. City lodging tax runs about 10% in city limits and 5% in the police jurisdiction, plus 4% state and 2% county.
Tuscaloosa runs one of the most structured programs in the state. Zoning approval comes first, permitted by right in the Downtown-Campus Tourist Overlay District and by special exception from the Zoning Board of Adjustment for single-family homes outside it or in historic districts. Then an annual short-term rental business license from the Revenue Division, with renewals postmarked by February 15. License caps are real: 150 active multi-family licenses in the Downtown-Campus District and 100 elsewhere. You also need a home inspection, $1 million liability insurance naming the city, a 24/7 emergency contact, a 24-hour minimum stay, and no commercial events. City lodging tax is 11% inside city limits and 5.5% in the police jurisdiction, plus 4% state.
Auburn created two categories under Ordinance 3288, which the Alabama Supreme Court upheld in Dixon v. City of Auburn in 2023: owner-occupied Homestays, and Short-Term Non-Primary Rentals of under 30 days. Both need zoning approval from Planning Services, with non-primary rentals requiring an annual zoning certificate, plus a business license from the Revenue Office. Non-primary rentals are prohibited in Neighborhood Conservation districts, capped at 240 rental days per year, restricted to lodging only with no events, and required to provide off-street parking. Two substantiated complaints in a year can cost you the certificate. The city runs an interactive eligibility map. City lodging tax is 7%, due by the 20th monthly, plus 4% state and 2% Lee County.
Direct links to the Auburn, Mobile, Dauphin Island, Huntsville, Gulf Shores, and Orange Beach ordinance pages are collected on our regulations page: alabamastra.org/regulations
The lakes
Lake Martin has no short-term rental permit requirement in any jurisdiction. Inside city limits you need a standard municipal business license, and Alexander City renewals are due February 15. The real restriction layer on Lake Martin is private. Many established neighborhoods have covenants or HOA rules limiting rentals, so read the deed restrictions before you close on anything. Taxes swing hard depending on where you sit: unincorporated Tallapoosa County is 14% total, remitted to Avenu; Alexander City is 14%, self-administered; unincorporated Elmore County shoreline runs around 15.5% including a room fee, remitted to Avenu. None of the Avenu-administered or self-administered portions are covered by platform collection.
Guntersville requires a short-term rental permit under Ordinance 1097 for rentals under 30 days in residential districts. It runs $20 per year alongside a city business license, plus a building inspection, $1 million liability insurance, a 24/7 emergency contact who can be on site within an hour, neighbor notification, and the permit number posted on all listings. Occupancy is capped at two persons plus two per bedroom, parking must be off-street, and events are prohibited. Total lodging tax is 12%, remitted to Avenu, and the city portion is not collected by the platforms.
Smith Lake spans Cullman, Winston, and Walker counties, and none of them requires a short-term rental permit. There is no county zoning in any of the three, so the practical limits on lake rentals come from HOA and POA covenants and Alabama Power shoreline permitting rather than land use law. Cullman regulates short-term rentals as a lodging use in its zoning code, but almost no lake waterfront falls inside city limits.
The story at Smith Lake is tax, and it changes by county. Unincorporated Cullman County shoreline, meaning Crane Hill, Logan, and Bremen, totals 10%, with the county portion self-administered through the Cullman County Sales Tax Office and remitted by the host. Walker County totals 13%, state-administered as of January 2026. Winston County, covering Arley and Houston, is currently 5% state only, but voters approved a new 8% county lodging tax plus a $5 per night fire protection fee in June 2026, aimed directly at Smith Lake rentals. It is expected to take effect soon and to be collected by the county directly. Winston County hosts should watch for the effective date and plan to register.
Lookout Mountain
Fort Payne adopted short-term rental rules in November 2024 under Ordinance 2024-08. Rentals are permitted uses in R-2 through R-5 and Rural Farm districts and require conditional use approval in R-1. Operators need a $20 per unit annual permit renewed each January, fire marshal and building inspections, a rental business license, proof of vacation rental insurance, and a 24/7 emergency contact. Occupancy is capped at two plus two per bedroom, with no events.
Mentone has no short-term rental ordinance on the books, but a town business license applies. Confirm current requirements with Town Hall at 256-634-4444. Total lodging taxes come to 13% in Fort Payne, 12% in Mentone with the town’s 5% going to Avenu, and 7% in unincorporated DeKalb County.
Seeing something move in your city?
Our regulations page is a living resource, and hosts on the ground usually spot changes before we do. If your city or town is drafting an ordinance, revising one, or enforcing something new, email us and we will add it. The faster that information reaches the page, the faster every host in that market can act on it.
What this adds up to
Fifteen jurisdictions, fifteen sets of answers. Some require inspections, some require insurance naming the city, some cap the number of licenses, some cap the number of nights. Two of them have active proceedings that could change the rules for hundreds of operators, and one county just voted in a new tax specifically targeting lake rentals.
None of it is coordinated, and none of it is announced to hosts in any organized way. A council agenda item in Birmingham or an effective date in Winston County is public information, but only if you know to look for it.
That is the gap ALSTRA exists to close. We track what is moving, we tell members what it means for their properties, and we show up in the rooms where these decisions get made. A host operating alone finds out about an ordinance change when the enforcement letter arrives. A host in a statewide network finds out while there is still time to weigh in.
Start with the regulations page at alabamastra.org/regulations. Then join us, and get the guidance, the member forums, and the advance notice that come with it.
Rules change frequently. Always verify current requirements directly with your city or county before listing or renewing. This article is general information, not legal or tax advice.