Getting a Business License and Collecting Lodging Taxes in the Cities of Gulf Shores and Orange Beach

paperworkGetting a Business License and Collecting Lodging Taxes in the Cities of Gulf Shores and Orange Beach can seem pretty intimidating when you are first faced with the task but like most things once you look at it is not as difficult as it originally seemed.

The easiest way to deal with the issue, of course, is to employ a property management company. They will act as your “Agent”. They will file all your paperwork, collect the lodging taxes and make sure they get paid on time.

The services of a property management company will run 20-30% of your gross rentals but for someone who does not have the time or the interest this may be the perfect answer.

Property management companies also handle the issue of maintenance and housekeeping which can be almost as intimidating as Getting a Business License and Registering Your Rental to Collect Lodging Taxes.

For those who want to take more control of their rental business there are three steps you need to take to get your vacation rental legal with the Orange Beach and Gulf Shores and set up to collect Lodging Tax. Fortunately both cities operate exactly the same and this process has to be been done only once. The first step is to complete a business license application for the city you will be renting in.

Gulf Shores Business License

The image to the left is for the city of Gulf Shore and you can view and print this document HERE. If your vacation rental unit is in Orange Beach click HERE. Print out this form, complete it, and get ready to write a check for whatever the license fee is. Fees can change so I recommend that you either walk the application over to the city’s finance department with your check book or If you are going to mail the application in, give the city a call and ask them for the amount and mailing address.

The Gulf Shores Revenue Office Phone number is (251) 968-2426. and The Orange Beach Revenue Office is (251) 981-6783. That is step one. When the city gets your money and application they will assign you a business license number and mail you back your license.

The second step, which is filling out you lodging tax application for the state of Alabama, can only be done online so you have to click on this site for the state of Alabama’s website: https://myalabamataxes.alabama.gov/_/#1 and here what you should see:

alabama tax 1Look under “I Want to” and click on  “Obtain a New Account Number” That will take you to this next screen:

Alabama Taxes 2

This screen looks a little busier but there are only three things you need to do, First, where the page asks for account type choose “All Other Account Types“. Second, where it asks Are you a registered Alabama taxpayer choose “No” and finally click the “Next” button. That’s all there is to this page. There’s only one more step to go.

Alabama Tax 3

This final page is the Alabama State lodging tax application and you need to fill it out. Here’s some advise on filling out this form:

They are going to ask you to set the start date of you rental business. Make sure that date is in the future because there is a fine for not filing your monthly return. If you choose a date in the past the system will think you didn’t file and fine you.

The state doesn’t want you mailing a check so they are going to ask for the routing and checking account number of the account you plan to pay your taxes with. If you don’t know what those are look on the bottom of your check. There are three groups of numbers. The group all the way to the left is you check number, the group in the middle is the routing number and the group on the right is you account number. A routing number just identifies the bank the check is being drawn on.

You will also be asked to create a password. I don’t remember when I filled out my application exactly what the password rules are but chances are they are case-sensitive and may even require some other character like a number or a question mark. Just make sure you read the instructions on how to create a password. One final bit of advise on passwords, try to make it something you will remember because you will have to use it several times each time you pay your monthly lodging tax.

Several Days after you complete this application online you receive a package from the state with you Lodging tax ID number.

All you have to do now is contact your city’s revenue office again and give them your State Lodging Tax ID number and they will help you finish the process. One thing I can tell you about all the people I have met whether at the city level or with the state and that is they have all been wonderful. Their attitude is they want to make this as painless for you as possible and to get it right so do not hesitate to call if you need help. The number for the Alabama Department of Revenue is (866) 576-6531

My next post will be on how to pay your monthly lodging tax. Now that you are set up, it is really easy because you now you can pay all your lodging taxes, local, county and state in the same place.

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