AL - Gulf Shores to discuss hike in lodging tax for vacation rentals

Gulf Shores, AL – (OBA) – The city council will consider raising the lodging tax on vacation rentals in the city by 3 percent taking the total condo, beach house, camping, hotels and individually houses renting short term to 16 percent. Gulf Shores’ will discuss making the city’s portion of the tax 10 percent at a council work session.

“Gulf Shores has experienced exponential growth in tourism and full-time resident population over the last 10 years which has placed significant strain on the existing transportation network, public safety resources and quality of life for residents,” city documents state. “The city council has identified a number of capital improvement projects during the next 10 years to expand transportation capacity/connectivity, bolster public safety, and enhance the overall quality of life for residents and visitors.”

The request also says new money would pay for critical transportation needs and improvements to park and recreation and city schools. Gulf Shores raised the tax 2 percent in 2018 citing similar traffic concerns and plans to earmark the extra money for transportation improvements. Orange Beach added the 2 percent in 2018 as well also pledging to use it for transportation improvements and possibly the Wolf Bay Bridge. The bridge effort has stalled. Orange Beach officials said they are not considering raising the lodging tax.

Currently both Gulf Shores and Orange Beach charge 7 percent each, the state collects 4 percent and the Baldwin County Lodging Tax District (CVB) 2 percent for the 13 percent total. The extra 3 percent for Gulf Shores is projected to generate $6.9-7million in 2022.

According the Escambia County, Florida, Tourism Development Tax office, the tax over there is “7.5% for the State Sales Tax and 5% for Escambia County's Tourist Development Tax.” Okaloosa County where Destin and Fort Walton are located and Bay County, home to Panama City both charge 5 percent TDT tax as well as a 7 percent sales tax

Florida issued new rules on the TDT in April stating:

Individual Florida counties and certain cities may impose a local option tax on the rental or lease of living, sleeping or housekeeping accommodations for a term of six months or less. These taxes, often called local option transient rental taxes, include the tourist development tax, convention development tax, tourist impact tax, and municipal resort tax. The local tax imposed is in addition to the 6 percent state sales tax and any applicable discretionary sales surtax.

Gulf Shores plans to use its increase to fund 10 years of projects throughout the city.

“These new revenues along with revenues from existing sources are projected to fully fund the estimated $12.7 million debt service needed to implement the identified 10-year capital improvement plan,” Gulf Shores’ documents state.

During that time, the city expects to spend about $76.74 million on projects with $38.74 million coming from federal and state grants and $38 million from the city’s general fund. The city said the extra lodging tax will go toward the following projects:

  • City matching funds for the RESTORE grant funded Waterway East Boulevard expansion to create a new connection from Highway 59 south of airport to Cotton Creek Drive
  • City matching funds for the RESTORE grant funded Canal Road reroute south of the Gulf Pines/Meyer Park neighborhood
  • City matching funds for the BUILD/ATRIP grant funded Highway 59 capacity improvements including a new third southbound lane from Coastal Gateway Boulevard south to Fort Morgan Road
  • City matching funds for the BUILD grant funded new pedestrian bridge spanning the Intracoastal Waterway with a land on the north near LuLu’s and landing on the south near Tacky Jacks
  • Additional County Road 6 improvements from its intersection with Highway 59 past the Gulf Shores Sportsplex entrance
  • A new two lane north-south road connecting Coastal Gateway Boulevard to County Road 6 east

  • Waterway West Boulevard improvements from Highway 59 to its intersection with County Road 6 west near the Plash Island bridge
  • Beach Walking District improvements that will provide new sidewalks, lighting, drainage, street trees and parking in the beach shopping and restaurant areas
  • New Justice Center to replace the 38-year-old police department building and city jail to address severe space deficiencies and provide a secure, modernized facility to support police, municipal court and emergency management operations
  • New fire training tower and teaching facility
  • Remodeling and fortification of the former Oyster Bay volunteer fire station on County Road 6.
  • New Fire Station to enhance fire and emergency response for residents in the northeast quadrant of the community and Jack Edwards Airport
  • New Coastal Gateway Community Park to enhance quality of life amenities available for residents north of the Intracoastal Waterway
  • New open space, parkland and beach access land acquisitions
  • New school facilities to support continued student enrollment growth and provide collaborative learning environments at existing and future school campuses as identified in Gulf Shores City School’s “The Next Wave” master plan


Among the projects the city said were funding by the 2 percent raise from 2018 include:

  • Beach Boulevard capacity improvements which included median installation, access management, signal improvements, pedestrian lighting and 8’ sidewalks
  • County Road 6 intersection improvements at Highway 59 which included an extended left turn lane, additional right turn lanes and upgraded traffic signal
  • Coastal Gateway Boulevard (formally County Road 8 east) capacity improvement which included widening from two lanes to four lanes, sidewalks, bike lanes, and a signalized intersection at the Foley Beach Express
  • New Medical Village Road and signalization improvements to support the South Baldwin Regional Medical Center freestanding emergency department.

City documents say $25.7 million was spent on the above projects even though only $11.2 million was generated by the new tax since 2018.

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