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Lodgings Tax

Lodgings tax is a privilege tax on persons, firms, and corporations engaged in the renting or furnishing of rooms, lodgings or other accommodations to transients for periods of less than 180 days of continuous occupations and applies to all charges for personal property used or furnished in such rooms or lodgings.

For transactions entered into on or after October 1, 2019, the tax shall not apply to marine slips, places or spaces for tent camping, or places or spaces provided for motor homes, travel trailers, self-propelled campers or house cars, truck campers, or similar recreational vehicles commonly known as R.V. s, which are supplied for a period of 90 continuous days or more in any place.

State lodgings tax rates

See State Tax Rates 

  • Alabama Mountain Lakes Area 40-26-1(a):  5%   Includes the following Counties: Blount, Cherokee, Colbert, Cullman, DeKalb, Etowah, Franklin, Jackson, Lauderdale, Lawrence, Limestone, Madison, Marion, Marshall, Morgan and Winston.
  • All Other Alabama Counties 40-26-1(a):  4%

When is the lodgings tax due?

The lodging tax is due monthly with returns and remittances to be filed on or before the 20th day of the month for the previous month’s lodgings.  However, pursuant to Section 40-23-7, Code of Alabama 1975, you may request quarterly filing status if you have a tax liability of less than $2,400.00 for the preceding calendar year.  You may request bi-annual filing if you have a tax liability of less than $1,200 for the preceding calendar year.  You may also request bi-annual filing if you provided accommodations during no more than two thirty consecutive day periods during the preceding calendar year.  You may request annual filing status if the tax liability for the entire preceding calendar year is less than $600.00.  You may also request annual filing if you provided accommodations during no more than one thirty consecutive day period during the preceding calendar year.  Changes to the filing status can only be requested each year before February 20th in order to file quarterly, bi-annually or annually for that calendar year.  Note: If paying via EFT, the EFT payment information must be transmitted by 4:00 p.m. (Central Standard Time) on or before the due date, to be considered timely paid.

If the 20th falls on a weekend or holiday, when is the due date?

The return must be submitted on or before the next working day to be timely filed.

Is a discount allowed for timely filing and paying the lodgings tax due?

Yes. A discount is allowed if the tax is paid before the 20th day of the month in which the tax is due. The lodgings tax discount consists of 5% on the first $100 of tax due, and 2% of all tax over $100.  However, non-state administered local taxes that may be filed through MAT/ONE SPOT may have a different discount rate and MAT has been programmed accordingly.

Is there a penalty imposed for not timely filing and paying the lodging tax due?

Yes. Penalty and interest is due if the tax is paid after the 20th day of the month in which the tax is due. The Failure to Timely File Penalty is 10% of the tax required to be paid or $50.00, whichever is greater. The Failure to Timely Pay Penalty is 10% of the tax required to be paid. Interest is due at the current rate. Note: If paying via EFT, the EFT payment information must be transmitted by 4:00 p.m. (Central Standard Time) on or before the due date, to be considered timely paid. View interest rates  Learn more 

Do I need to file a lodging tax return for a month in which I had no lodgings to report?

Yes. Once an account has been established for your business, no matter what type of tax account you have, a tax return must be filed for each month even though no tax is due.

How do I report lodging tax if the lodging transactions were made through a third party platform/facilitator?

If the third party platform/facilitator remits all the state and local lodging taxes for the transactions made through the platform/facilitator,  you do not need a state lodging account or a local lodgings account.

If you will be making lodging transactions yourself and also using a third party platform/facilitator, you must obtain a state and local lodging tax account to file and pay taxes on the lodging transactions you made. NOTE:  You should report any third party/facilitator transactions on the state and local lodging tax return and then deduct those transactions to arrive at the net taxable gross proceeds.

I make all my lodging transaction bookings through a third party platform/facilitator, can the department provide me with a listing of all my transactions?

No. Third party platforms/facilitators do not provide a listing of how much lodging taxes is applied to any individual or specific lodging addresses.

Local lodging Tax

Local lodgings tax is levied in the same manner as the state lodgings tax; these rates vary. However, we do not administer all county or city lodgings taxes. Therefore, be advised to contact all counties and municipalities in which you do business in order to determine if you should register with them to collect their local tax. The same filing status and due date applicable to the state lodging tax is applicable to local lodging tax.  Note: If paying via EFT, the EFT payment information must be transmitted by 4:00 p.m. (Central Standard Time) on or before the due date, to be considered timely paid.

 Are there any lodging transactions that are not subject to lodging taxes?

Section 40-26-1 provides the following exemptions from lodging taxes as listed below:

  • The tax shall not apply to rooms, lodgings, or accommodations supplied: (i) For a period of 180 continuous days or more in any place; (ii) by camps, conference centers, or similar facilities operated by nonprofit organizations primarily for the benefit of, and in connection with, recreational or educational programs for children, students, or members or guests of other nonprofit organizations during any calendar year; or (iii) by privately operated camps, conference centers, or similar facilities that provide lodging and recreational or educational programs exclusively for the benefit of children, students, or members or guests of nonprofit organizations during any calendar year.
  • For purposes of subsection (b): “Children” means individuals under age 21; “student” is defined in accordance with 26 U.S.C. §151(c)(4), as in effect from time to time or by any successor law; “nonprofit organization” is an organization exempt from federal income tax under 26 U.S.C. §501(c)(3), as in effect from time to time or any successor law; and “privately operated” refers to any camp, conference center, or similar facility other than those operated by a nonprofit organization as herein defined.
  • For transactions entered into on or after October 1, 2019, the tax shall not apply to marine slips, places or spaces for tent camping, or places or spaces provided for motor homes, travel trailers, self-propelled campers or house cars, truck campers, or similar recreational vehicles commonly known as R.V. s, which are supplied for a period of 90 continuous days or more in any place.
  • Charges made for the rental of a ballroom, dining room, club room, sample room, conference room, wedding chapel, or similar room or space that is not intended nor suitable for overnight sleeping purposes and that is not used for overnight sleeping purposes is not subject to the tax levied pursuant to this chapter if the charges for the rental are separately stated by the facility and the room or space is used exclusively as a room or space for a meeting, conference, seminar, club meeting, private party, or similar activity.