In a meeting held on Tuesday by the Birmingham City Council, it was decided that Airbnb would be allowed to collect the city’s lodging tax of 6.5%, as long as the rental is located within Birmingham’s city limits, beginning in thirty days. Afterwards, the tax will be remitted to the city. This will allow the city to acquire profit from Airbnb’s business as well, which would end up being $97,500 for every $1.5 million that is generated by the hosts. For Alabama, Airbnb collects a 4% lodging tax on all rentals including those within Birmingham. There is another regulation in place when it comes to hosting in Birmingham and that is that those who do so often are required to receive a business license.
Many people who use Airbnb are confused as to how taxes affect them but there is one specific type of tax that affects both hosts and renters. This is the “Lodging Tax” which is basically a tax added onto the total cost of the room that someone rents. For example, if you were to rent a room for $100 for only one night you may pay anywhere from $10-$20 extra in lodging tax.
There are also possible changes being investigated throughout Alabama as a whole and that is when it comes to where Airbnb hosting is allowed. Valerie Abbott, President of the City Council in Birmingham, has come to the decision that it is necessary for there to be regulations about what types of areas are allowed to have Airbnb hosts. This is largely due to the fact that numerous complaints have been made, especially in residential areas of the state. So it is important that you check the rules of your city’s zoning office before making the decision to rent your property through Airbnb or any other similar hosting websites.
