Educational information only, not tax advice. Rules and figures change — confirm your situation with a qualified Alabama tax professional before filing.
Alabama · USA · Short-term rental taxes
Short-Term Rental Taxes in Alabama
Short term rental taxes in Alabama combine a 4% or 5% state lodgings tax, county and city lodgings taxes, and state income tax of up to 5% on your net rental profit — here is who collects what.
The 30-Second Answer
- Short term rental taxes in Alabama start with the state lodgings tax: 4% of the rent in most counties and 5% in the 16 north Alabama Mountain Lakes counties, on stays of less than 180 days.
- Counties and cities add their own lodgings taxes — Airbnb lists county rates of 1–9% and municipal rates of 2–13%, such as 10% in Gulf Shores, Orange Beach and Mobile. Some local taxes are not administered by the state, so check each county and city.
- Airbnb and Vrbo collect and remit the state lodgings tax and state-administered local taxes. If a platform remits all state and local taxes for you, ALDOR says you need no lodgings tax account; any direct booking puts you back on the monthly return, due by the 20th.
- Net rental profit is taxed federally and by Alabama at 2%, 4% and 5% — 5% on taxable income above $3,000 (single) or $6,000 (joint). Residents file Form 40, nonresident owners Form 40NR, due April 15, 2027 for 2026, and Alabama lets you deduct federal income tax paid.
Deductions
What Alabama STR Hosts Can Deduct
Ordinary and necessary rental costs reduce your federal taxable income, and the same net figure is what Alabama taxes at up to 5%.
Lodgings taxes you collect from guests and remit are pass-through amounts, not income or expenses. If you stay in the property yourself, split costs between rental and personal days under IRC §280A.
Filing Calendar
Key Dates & Filing Calendar
Direct-booking hosts run on the monthly lodgings tax clock; income tax follows the federal calendar, with Alabama due the same day as the IRS.
File and pay the state lodgings tax on time and ALDOR lets you keep a discount of 5% of the first $100 of tax due and 2% of the tax above $100.
Alabama Department of Revenue — Lodgings Tax FAQs; Individual Income Tax filing information
Income Tax Treatment
Schedule E or Schedule C for an Alabama STR?
Alabama has no separate rental regime: the federal classification sets your net profit, and Alabama taxes it at up to 5% after its federal-tax deduction.
Passive rental — Schedule E
Where most beach condos and lake houses land
- Report rents and costs on Schedule E; the net result carries into Form 40 (residents) or Form 40NR (nonresidents).
- No self-employment tax on net rental income.
- Depreciate the building over 27.5 years; furniture and appliances over 5 years.
- Losses are generally passive; the $25,000 special allowance phases out between $100,000 and $150,000 of AGI.
No income ceiling; passive loss limits apply
Active business — Schedule C
For hotel-style operations
- Applies when the average stay is 7 days or less and you provide substantial services.
- Net profit carries self-employment tax of 15.3% up to the 2026 wage base of $184,500.
- The federal QBI deduction (Section 199A) may be available.
- Alabama applies the same 2–5% brackets either way — the choice mainly changes your federal bill.
No income ceiling; SE tax on profit up to the $184,500 wage base (2026)
Depreciation
Depreciation for Alabama STR Properties
Depreciation spreads the cost of the building and its contents over their federal recovery periods — often the largest non-cash deduction for a rental.
| Asset | Typical write-off period | Notes |
|---|---|---|
| Residential rental building (condo or house) | 27.5 years (straight-line) | Land and the land share of a condo are not depreciable; split the purchase price using the county appraisal or an appraisal report. |
| Furniture, appliances & beach gear | 5 years (MACRS) | Eligible for 100% bonus depreciation if acquired after January 19, 2025. |
| Docks, fencing, pools & landscaping | 15 years (MACRS) | Land improvements outside the building, common at lake and bay properties. |
| HVAC replacement or new roof | 27.5 years | Improvements to the building follow the building's recovery period; routine repairs are deducted in the year paid. |
A cost segregation study can move parts of a building into 5- and 15-year classes, which then qualify for bonus depreciation. Confirm with your tax adviser how Alabama treats any accelerated federal depreciation on your return.
On a sale, federal tax recaptures the depreciation you claimed at up to 25% (unrecaptured Section 1250 gain); Alabama taxes the gain as ordinary income at up to 5%.
Lodgings Tax
Alabama Lodgings Taxes: State + Local Layers
Every vacation rental stay under 180 days carries the state lodgings tax, with county and municipal lodgings taxes stacked on top.
The Alabama Department of Revenue administers the state lodgings tax and some local ones. Many counties and cities run their own occupancy tax, so a single property can owe several returns. The bars show the state rates and the ranges Airbnb reports for local layers.
State 4–5% plus county and city lodgings taxes (e.g. 14% in Gulf Shores or Mobile before any county tax)
Alabama Department of Revenue — Lodgings Tax FAQs; Airbnb Help Center article 2293; Vrbo Help — where Vrbo collects and remits taxes (US A–E)
| Booking type | Who collects & remits | What it means for your books |
|---|---|---|
| Airbnb booking | Airbnb collects state, county and city lodgings taxes on stays of 179 nights or fewer and remits them | Keep Airbnb's tax reports; if you also book direct, report platform stays on your return and deduct them |
| Vrbo or Booking.com booking | Vrbo collects the state lodgings tax and state-administered local tax (since January 1, 2025); check the tax lines for other channels | Any local tax the channel does not cover is yours to file with the county or city |
| Direct booking | You register with ALDOR (My Alabama Taxes) and each local taxing authority, charge the guest and file by the 20th | Show the lodgings tax separately on the invoice and hold it apart from rent |
Some cities also charge flat per-night amounts — Birmingham adds a $3 per room per night fee on top of its 6.5% lodging tax. Rates in a city's police jurisdiction are often half the in-city rate.
Platforms
Airbnb Tax in Alabama: What Platforms Collect
Airbnb has remitted Alabama lodgings taxes for hosts since 2016 and Vrbo since 2025 — income reporting to the IRS is a separate matter.
| Platform | Reports your income | Collects the local lodging tax | Annual earnings summary |
|---|---|---|---|
| Airbnb | Form 1099-K when 2026 payouts exceed $20,000 and 200 transactions | Yes — state lodgings tax plus county and city lodgings taxes on stays of 179 nights or fewer | Earnings and tax reports in the host dashboard; tax forms by January 31 |
| Vrbo | Form 1099-K above the same federal thresholds | Yes — state lodgings tax and state-administered local tax (stays under 180 nights) | Annual payout summary in the owner dashboard |
| Booking.com / other OTAs | Form 1099-K above the federal thresholds | Check the listing's tax settings — if the channel does not remit, you do | Partner-portal statements |
| Direct bookings | No platform reporting | No — collect and remit through My Alabama Taxes and local returns | Your own booking ledger |
Listing on Several Platforms?
Each platform only remits on its own reservations. A repeat family booking your Orange Beach condo direct, or a stay through a smaller booking site, is yours to tax. The 1099-K threshold is tested per platform, so add up payouts from every channel yourself.
US Reporting: Form 1099-K, Not DAC7
DAC7 is an EU directive and does not reach Alabama rentals. US platforms report on Form 1099-K once payouts exceed $20,000 and 200 transactions in a year; Form 1099-MISC/NEC uses a $2,000 threshold for payments after December 31, 2025. All rental income is taxable whether or not a form arrives.
Airbnb Help Center — Alabama (airbnb.com/help/article/2293); Alabama Department of Revenue — Airbnb collection announcement; Vrbo Help
Illustrative P&L — Gulf Shores Beach Condo
Example for a Gulf Shores condo grossing $48,000 a year; lodgings taxes collected by the platforms are excluded. For illustration only — not tax advice.
Record-Keeping
Stay Audit-Ready: What to Keep and How Long
Records back up your Schedule E, your Alabama return and any lodgings tax filings if ALDOR or a local tax office asks.
| Keep | How long | Why |
|---|---|---|
| Booking calendar with dates, nightly rate and channel | At least 3 years after filing | Proves rental vs. personal days and ties to both income and lodgings returns |
| Airbnb and Vrbo tax reports showing lodgings tax remitted | At least 3 years after filing | Supports the facilitator deduction on your lodgings return |
| Lodgings tax returns and payment confirmations (state and local) | At least 3 years after filing | Shows you filed by the 20th and earned the timely-filing discount |
| Receipts for repairs, cleaning, insurance and HOA dues | At least 3 years after filing (6 if income is understated by more than 25%) | Substantiates every deduction on Schedule E or C |
| Closing statement, improvements and depreciation schedule | Until 3 years after you sell | Needed to compute basis, gain and depreciation recapture |
If you mix platform and direct bookings, keep the platform tax reports: ALDOR expects you to report all rentals on the lodgings return and then deduct the platform-handled ones.
Estimator
Short-Term Rental Tax Estimator
Plug in your bookings and costs to see your likely taxable position.
Your Numbers
Total short-term-rental income, before costs.
Allowable running costs, mortgage interest, depreciation and platform fees.
Your top income-tax band, as a percentage.
Estimated tax owed
Income tax on your net rental profit at your marginal rate.
Illustrative estimate. A simplified model to orient you — it is not tax advice. Confirm your situation with a qualified local professional.
Sources & notes
Educational summary only. Local lodgings tax rates change often — confirm the current rate with the Alabama Department of Revenue and each county and city where your property sits.
- Alabama Department of Revenue — Lodgings Tax FAQs — State rates (4%; 5% in the 16 Mountain Lakes counties), 180-day rule, filing frequencies and discount. https://www.revenue.alabama.gov/faqs/lodgings-tax/
- Alabama Department of Revenue — Transient Occupancy (Lodgings) Tax — Third-party platform rules, due date on the 20th, local taxes not administered by ALDOR. https://revenue.alabama.gov/sales-use/taxes-administered/lodgings-tax/
- Alabama Department of Revenue — Individual income tax rate — 2%, 4% and 5% brackets for single and joint filers. https://www.revenue.alabama.gov/faqs/what-is-alabamas-individual-income-tax-rate/
- Alabama Department of Revenue — Individual income tax filing information — Forms 40, 40-A and 40NR; returns due with the federal return, April 15 for most. https://www.revenue.alabama.gov/individual-corporate/individual-income-tax-filing-information/
- Alabama Department of Revenue — Form 40NR booklet — Nonresident return with Schedule E income and the federal income tax deduction. https://www.revenue.alabama.gov/wp-content/uploads/2026/01/25f40nrblk.pdf
- Airbnb Help Center — Occupancy tax collection in Alabama — State 4–5%, county 1–9% and municipal 2–13% lodgings taxes collected by Airbnb, with city examples. https://www.airbnb.com/help/article/2293
- Vrbo Help — Where Vrbo collects and remits taxes (US A–E) — Alabama state lodgings tax and state-administered local tax, effective January 1, 2025. https://help.vrbo.com/articles/vrbo-stay-taxes-lodging-taxes-united-states-a-e
- IRS — Publication 527, Residential Rental Property — Schedule E reporting, depreciation and personal-use rules. https://www.irs.gov/publications/p527
Questions
Frequently Asked Questions — Alabama STR Taxes
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