Is Rental Arbitrage Legal in Alabama?
Alabama has no statewide short-term rental licence, and cities and counties set their own rules. The state charges a lodgings tax on stays of less than 180 continuous days. Birmingham had no short-term rental regulation as of December 2025, with a proposal in front of its council.
Requirements
- Check the rules of the city or town the property is in
- Register for a state lodgings tax account if you take bookings directly
- Check whether the county or city runs its own lodgings tax account
Taxes and Fees
- Alabama charges a lodgings tax on rentals of rooms or other accommodations for fewer than 180 continuous days, and it covers all charges for the accommodation
- Owners who rent directly need a state and local lodgings tax account; booking platforms that remit all state and local lodgings taxes can operate without one for those bookings
- Returns are due on or before the 20th of the month for the previous month's rentals, with quarterly, biannual or annual filing available based on liability
- The Department of Revenue does not administer every local lodgings tax, so contact the county or city for local rates and filing
Cities in Alabama
Next Step
Legal is one half of the decision. The other half is whether the deal earns enough to be worth the risk.
Sources
Frequently Asked Questions
- Does Alabama Regulate Short-Term Rentals?
- Not at the state level. As of December 2025 neither Alabama nor Birmingham had short-term rental regulations, though nearby cities such as Homewood, Hoover, Trussville and Mountain Brook do.
- Is Birmingham Changing Its Rules?
- A proposal has been in committee since mid-2024, and a council vote was expected in 2026. See the Birmingham page.