Madison, AL Short-Term Rentals: Taxes & Fees (2026)
Key Facts
- State lodgings tax
- 5% (Madison County)
- Statute
- Ala. Code 40-26-1
- Exemption
- 180+ continuous days
- City lodging tax
- Code Ch. 10, Art. VIII
- Permit fee (proposed)
- $350 nonrefundable
Summary
Alabama levies a state transient occupancy (lodgings) tax of 5% in Madison County, which is part of the Mountain Lakes region, on stays under 180 continuous days. Madison also has a city lodging tax (Code Ch. 10, Art. VIII), and STR operators pay a business-license tax under the city code.
5% in the following counties: Blount, DeKalb, Lauderdale, Marion, Cherokee, Etowah, Lawrence, Marshall, Colbert, Franklin, Limestone, Morgan, Cullman, Jackson, Madison, and Winston. 4% in all other counties.
Full Breakdown
State lodgings tax under Ala. Code 40-26-1 applies to renting accommodations to transients; the Alabama Department of Revenue sets the rate at 5% in the 16 Mountain Lakes counties, which include Madison. Stays of 180 continuous days or more are exempt. The City of Madison separately levies a municipal lodging tax under Chapter 10, Article VIII of its Code of Ordinances (the ordinance defines these as 'Lodging Taxes'). Proposed Ordinance 2026-201 also imposes a $350 nonrefundable permit application fee and requires a business license under the Madison City Code. Confirm current city and county tax rates with the Revenue Department before hosting.
Violations & Fines
The proposed ordinance requires the property to have no outstanding taxes; unpaid lodging taxes or license taxes can block permit issuance and lead to enforcement by the Revenue Department.
Frequently Asked Questions
What lodging tax rate applies to Madison STRs?
Are long stays exempt from the tax?
Sources & Official References
Other rules in Madison
How Madison compares: Cities with the Highest Short-Term Rental Taxes·Compare Madison to another location·View the Alabama short-term rentals overview
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Taxes & Fees in Nearby Cities
How other cities in Madison County handle taxes & fees.