Short-term rentals in Tuscaloosa, explained properly.

Sec. 7-198 defines a short-term rental manager as a person or entity that arranges the rental, cleaning, listing, advertising or otherwise assists in the operation of a short-term rental for a profit, and says the term does not include listing services or online platforms. Sec. 7-206(b) requires a manager to obtain a business license under Sec. 7-17 and to be professionally licensed in compliance with Ala. Code § 34-27-30.

Sec. 7-203 applies to every person in the city or its police jurisdiction who wishes to obtain a license. The policy must name the city, its officers and employees as an additional interested party and provide that it cannot terminate or be cancelled before the end of the permit period without forty-five days written notice to the city.

Sec. 7-204(a) lists for a whole-dwelling single-family rental under three stories, and any separate guesthouse: smoke and carbon monoxide detectors, operable egress windows in sleeping areas, proper hand and guardrails, GFCI protection where the National Electrical Code requires it, fire extinguishers, a displayed 9-1-1 address and emergency egress lighting. Sec. 7-204(b) adds a fire sprinkler system under the 2015 International Residential Code for a single-family dwelling under three stories that is occupied by the owner during rentals or has individual rooms rented to separate parties with fewer than five guest rooms, and for owner-occupied bed and breakfasts with five or fewer guest rooms. Larger bed and breakfasts, boarding houses and rentals in multi-family buildings must meet applicable building and fire codes (Sec. 7-204(c), (d)). Sec. 7-205: a single-family inspection report must be on file at renewal if made less than twenty-four months earlier, and the owner certifies that nothing affecting it has changed; bed and breakfasts and multi-family buildings are inspected by the city fire department and/or building inspector.

Sec. 7-199(b) makes it unlawful for an entity to list, advertise or hold out any room or building as a short-term rental outside of any approvals provided by the zoning board of adjustment related to the number of occupants or vehicles allowed on site. The article itself sets no occupant or vehicle number; any figure comes from the individual approval.

Sec. 7-200 imposes the short-term rental lodging tax on every person in the city or its police jurisdiction who rents or furnishes a room, lodging or accommodation as a short-term rental, for each rental location. The charge includes the charge for use or rental of personal property or services furnished in the room. State and other local lodging taxes are separate and this page does not total them with the City tax.

Sec. 7-201 makes the business license and lodging tax due in monthly installments by the twentieth day of the following month; a person who fails to pay on time pays an additional ten per cent of the tax due as a penalty, assessed and collected as part of the tax. Sec. 7-202 requires a true and correct statement of the gross proceeds for the preceding month on a form prescribed by the revenue director, and a person who uses a third party for lodging tax collections submits the third party's transaction history detail or a similar document showing dates booked, gross revenue and tax submitted.

Section 40-26-1 of the Code of Alabama levies a privilege or license tax on every person in the business of renting or furnishing rooms, lodging or accommodations to transients in any hotel, motel, inn, tourist camp, tourist cabin or any other place in which rooms, lodgings or accommodations are regularly furnished to transients for a consideration. The rate is 5% of the charge in the 16 counties of the Alabama mountain lakes area (Blount, Cherokee, Colbert, Cullman, DeKalb, Etowah, Franklin, Jackson, Lauderdale, Lawrence, Limestone, Madison, Marion, Marshall, Morgan and Winston) and 4% in every other county, and the charge includes any charge for personal property and services furnished in the room. The tax does not apply to rooms, lodgings or accommodations supplied for 180 continuous days or more. The Alabama Department of Revenue says lodgings tax is collected through an account at My Alabama Taxes, and that counties and cities may add their own lodgings taxes of between 1% and 13%, some collected by the Department, some by third-party administrators and some by the local government itself. Local lodgings taxes are shown on each place's page.

Section 40-26-1.1 of the Code of Alabama (the Alabama Tourism Tax Protection Act of 2024, Act 2024-334) says an accommodations intermediary, meaning a business other than the owner that facilitates a lodging transaction and charges the guest a room or accommodations fee it keeps as compensation, must collect and remit the state lodgings tax and parallel local levies for transactions on or after January 1, 2025. The tax is charged on the room charge, the full retail price the guest pays including any fees. When the intermediary handles the booking for an accommodations provider (an owner with an active lodgings tax account who collects and remits the tax), the tax collected may be remitted to the provider if an executed written agreement says who remits it, and the intermediary is then not liable for tax the provider fails to remit. The intermediary must state the tax separately on the bill. Where the owner has hired a licensed professional property management company, that company is the merchant of record. The Department of Revenue's notice describes the same rules. Which local lodgings taxes a platform collects in a given place is not stated in these sources; check with the platform and the local tax office.

Section 40-26-1.1(g) requires every accommodations intermediary and accommodations provider to submit an annual report, in a form set by the Department of Revenue, listing the physical address of each accommodation rented or furnished for more than 14 days during the previous year; the report is confidential taxpayer information. Exempt are licensed professional property management companies that collect and remit the state lodgings tax (or manage homes leased for a month or more as the tenant's principal residence), hotels that collect and remit the tax, tourism marketing organizations funded by the tax, and marina, tent camping and RV providers that collect and remit it. The Department of Revenue's notice describes the same reporting rule and exemptions.