LicensedRental

Etowah County, Alabama

Rainbow City, AL vacation rental requirements

Rainbow City requires a renting and leasing business license and a $50 yearly inspection permit for each short-term rental, a contact who answers within an hour, rental insurance, and notice to adjacent owners. Occupancy is 2 people plus 2 per bedroom, and lodgings tax is 7% plus $1.50 a night.

Checked against official sources November 5, 2026

Download checklist (PDF)Free. A printable version of this guide to tick off, with the official sources.

Only when this town’s rules, fees, or forms change. Unsubscribe anytime.

City permit
$50 per unit a year
Annual inspection permit, plus a renting and leasing business license (Ordinance 564, 2022).Source
Where
All zones except M-1 and MHP
Occupancy
2 people + 2 per bedroom
One party at a time.Source
Lodgings tax
7% + $1.50 a night
5% state + 2% county; we found no city lodging tax in the state’s report.Source

Fines are $500 for a first violation and $1,000 after that, and repeat problems can lead to a council hearing on revoking the permit.

Your licensing checklist

In order: the state, the county, then the town.

State of Alabama

  1. Register for the lodgings tax

    Create an account at My Alabama Taxes (MAT) and register for state lodgings tax, plus any local lodgings taxes the state administers for your county and city. Cities that collect their own tax need a separate account with the city.Source

    My Alabama Taxes →

  2. File by the 20th

    Returns are due by the 20th of the following month. Small filers can ask (before February 20) to file quarterly, twice a year, or yearly. Paying on time earns a small discount (5% of the first $100 of tax, 2% after).Source

  3. Know what the platform collects

    Under Act 2024-334, Airbnb, VRBO, and other booking platforms collect the state and local lodgings taxes on their bookings unless your contract says you remit. You still owe tax on direct bookings, and the law adds a yearly report of every unit rented more than 14 days.Source

  4. Keep filing once you register

    If every booking goes through a platform that collects all your state and local lodgings taxes, you may not need your own account. But if you take direct bookings, or the platform doesn’t collect one of your local taxes (often the ones filed with a city, a county, or Avenu), register and file it yourself. Once registered, file every period, even a $0 return, and report platform-collected sales as a deduction. Some county offices ask owners to keep their own account and file monthly even when the platform pays, so ask yours.Source

  5. Then your county and city

    Local business licenses, rental permits, and zoning rules are where Alabama towns differ most. Pick your area.

Etowah County, Alabama

  1. Register for the county lodging tax

    File the county’s 2% and $1.50 nightly room fee with the state through My Alabama Taxes, along with the 5% state tax.Source

  2. Then your city

    City rules differ a lot here. Pick your area.

City of Rainbow City

  1. Get the business license and inspection permit

    Get a renting and leasing business license, then apply for the $50 short-term rental inspection permit for each unit. The building official sets the number of bedrooms and may inspect.Source

  2. Name an emergency contact and insure the home

    The contact must answer 24/7, respond within an hour, and be on site within 12 hours if the city asks. Send proof of vacation rental insurance within 30 days.Source

  3. Notify adjacent owners and post the rules

    Give written notice to owners of adjacent residential property with your contact numbers, the city’s violation line, and the maximum guests. Post the permit, contact, and house rules, and have each group sign that they received them.Source

  4. Register for lodgings tax

    Total lodgings tax here is 7% plus $1.50 a night (5% state, 2% county). Both are filed with the state through My Alabama Taxes. Airbnb collects the state tax and the local taxes the state administers on its bookings; for taxes filed with a city, county, or Avenu, ask your platform whether it collects them. For direct bookings, file everything yourself by the 20th of each month.Source

House rules for guests

Occupancy
2 people + 2 per bedroom
Source
Parking
On the property, off the street
No RVs, boats, or trailers on the street or in front of the house.Source
Events
Not allowed
Source

Sources

A plain-language summary to help you prepare, not legal advice. Rules and fees change; confirm with the office before you apply. Spot something out of date? Email hello@licensedrental.com.