Alabama Short-Term Rental Laws by City (2026)
Short-term rental rules in Alabama are set city by city — a property that is legal to rent nightly in one town can be prohibited a few miles away. The table below covers 1 Alabama city (1 human-verified against official sources), with each city's legal status, permit cost, and last-verified date.
Statewide short-term rental rules in Alabama
Alabama has no statewide short-term rental license, permit, or operating restrictions, and no law preempting local governments — cities and counties are free to regulate or even ban STRs, and the Alabama Supreme Court upheld that authority in Dixon v. City of Auburn (2023). The state's role is tax collection: stays under 180 continuous days owe state lodgings tax of 4% (5% in the 16-county Mountain Lakes region in north Alabama), plus any local lodging taxes. Under the Alabama Tourism Tax Protection Act (Act 2024-334), booking platforms like Airbnb and Vrbo must collect and remit these taxes on transactions from January 1, 2025, and platforms and hosts must file an annual report listing addresses of properties rented more than 14 days a year. Hosts who only book through a tax-collecting platform do not need their own state lodging tax account; those with direct bookings must register with the Department of Revenue. City and county rules apply on top of state law — check your local market's page.
Full statewide rules: permits, taxes & enforcement
Alabama has no statewide short-term rental license, permit, or operating restrictions, and no law preempting local governments — cities and counties are free to regulate or even ban STRs, and the Alabama Supreme Court upheld that authority in Dixon v. City of Auburn (2023). The state's role is tax collection: stays under 180 continuous days owe state lodgings tax of 4% (5% in the 16-county Mountain Lakes region in north Alabama), plus any local lodging taxes. Under the Alabama Tourism Tax Protection Act (Act 2024-334), booking platforms like Airbnb and Vrbo must collect and remit these taxes on transactions from January 1, 2025, and platforms and hosts must file an annual report listing addresses of properties rented more than 14 days a year. Hosts who only book through a tax-collecting platform do not need their own state lodging tax account; those with direct bookings must register with the Department of Revenue. City and county rules apply on top of state law — check your local market's page.
Reviewed by the STR Rule Watch research team against 9 official sources. How we verify data
Alabama statewide STR rules at a glance
| Legal status | Allowed, no permit required |
|---|---|
| Permit required | No |
| Renewal | No renewal required |
| Total occupancy taxes | ~9% of gross revenue |
| Insurance | None. Alabama imposes no statewide insurance or liability-coverage mandate on short-term rental operators. |
| Enforcement | State enforcement is tax-focused and handled by the Alabama Department of Revenue (Sales & Use Division). |
| Current rules effective | 2025-01-01 |
State law & local authority
No preemption: Alabama has no statute limiting local STR regulation (no Arizona SB1350-style law, no grandfathering act). Cities and counties may license, zone, restrict, or prohibit short-term rentals, and many do (Gulf Shores, Orange Beach, Auburn, Hoover, Huntsville, Athens, Decatur, etc.). The Alabama Supreme Court confirmed this local authority in Dixon v. City of Auburn (SC-2022-0741, Oct. 27, 2023), rejecting vested-rights and constitutional challenges to a city zoning ordinance that banned STRs in certain residential districts.
State-level taxes
| Tax | Rate | Who collects |
|---|---|---|
| Alabama State Lodgings Tax (general rate)Ala. Code § 40-26-1 privilege tax on accommodations furnished to transients for under 180 continuous days; applies in all counties outside the Mountain Lakes region. Since Jan 1, 2025, accommodations intermediaries (Airbnb, Vrbo, etc.) must collect and remit on platform bookings under Act 2024-334; hosts collect and remit on direct bookings (returns due by the 20th of the following month via My Alabama Taxes). | 4% | varies |
| Alabama State Lodgings Tax (Mountain Lakes rate)5% rate applies in the 16 Alabama Mountain Lakes counties: Blount, Cherokee, Colbert, Cullman, DeKalb, Etowah, Franklin, Jackson, Lauderdale, Lawrence, Limestone, Madison, Marion, Marshall, Morgan, and Winston. Same platform/host collection split as the general rate. | 5% | varies |
Enforcement & penalties
State enforcement is tax-focused and handled by the Alabama Department of Revenue (Sales & Use Division). Under Act 2024-334 and ADOR Rule 810-6-5-.22.01 (effective Feb 14, 2025), every accommodations intermediary and accommodations provider must file an annual report with ADOR listing the physical address of each accommodation rented more than 14 days in the prior year (first report due April 20, 2026) — a data-sharing mechanism that lets the state and localities identify STR properties. Operational enforcement (permits, zoning, occupancy) happens at the city/county level.
No STR-specific state penalties. Unregistered or unremitted lodgings tax is subject to ADOR's standard tax penalties and interest for failure to file or pay.
Statewide sources
- Alabama Department of Revenue — Transient Occupancy (Lodgings) Taxretrieved July 10, 2026
- Alabama Department of Revenue — Lodgings Tax FAQsretrieved July 10, 2026
- Alabama Department of Revenue — NOTICE: Alabama Tourism Tax Protection Act (Act 2024-334)retrieved July 10, 2026
- Alabama Department of Revenue FAQ — Reporting lodging tax for third-party platform/facilitator transactionsretrieved July 10, 2026
- Ala. Admin. Code r. 810-6-5-.22.01 — Collection and Reporting Requirements for Accommodations Intermediaries and Accommodations Providers (Cornell LII)retrieved July 10, 2026
- Code of Alabama § 40-26-1.1 — Duties of Accommodations Intermediary; Annual Report; Exemptions (Justia)retrieved July 10, 2026
- Dixon v. City of Auburn, SC-2022-0741, 391 So. 3d 877 (Ala. Oct. 27, 2023) (Justia; note Justia's URL slug mislabels the docket as SC-2022-1013)retrieved July 10, 2026
- Dixon v. City of Auburn, No. SC-2022-0741 (Ala. Oct. 27, 2023) (FindLaw — caption confirms docket number)retrieved July 11, 2026
- Avalara MyLodgeTax — State of the state: Alabama short-term rental rules (Dec 2025)retrieved July 10, 2026
| City | Status | Permit fee | Last verified |
|---|---|---|---|
| Gulf Shores | Permit required | — | July 10, 2026 |
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This page is informational only and is not legal, tax, or financial advice. Regulations change frequently — verify current requirements with each jurisdiction before operating. HOA and condo rules may prohibit short-term rentals regardless of city law.