Airbnb is poised to start collecting a local lodging tax in Birmingham, Ala. later this year.
The Birmingham City Council unanimously approved an agreement, by a 5-0 vote, without any discussion during its regular Tuesday meeting allowing the short-term rental website to collect the tax on rentals. Under the agreement, an additional 6.5 percent lodging tax will be added to guests’ bills and remitted to the city starting on October 1st, 2018.
“Because of the speed at which tech start up companies grow and expand, it is often difficult for municipalities to regulate their activities, collect regular taxes on their operations like any other business, and make sure they are operating according to their laws,” read the City Council after report highlights explaining why the tax is necessary.
The Magic City is the second largest Airbnb market in Alabama, behind only Gulf Shores. Approximately 14,100 guests used Airbnb in Birmingham in 2017 and hosts earned about $1.5 million during that frame. That means the city lost nearly $100,000 in lodging tax revenue last year.
“Our hosts want to pay their fair share, and we want to help,” said Tom Martinelli, Southeast policy director for Airbnb. “Our Birmingham host community provides a tremendous service to the city by allowing more visitors to stay in Birmingham and spend money with local businesses. This tax agreement will only enhance the economic impact and increase revenue for the city.”
Airbnb also has tax agreements with Auburn, Opelika, Orange Beach, Tuscaloosa.
The City Council next plans to address zoning issues of those who are hosting on the Airbnb platform.