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From mandatory permits to safety postings and a 2% tax, a new ordinance passed in October brings new rules to operating a short-term rental within city limits.
The city in 2022 started requiring property owners looking to operate a short-term rental, like an Airbnb or VRBO, to receive approval from the Planning Commission.
But that policy provided little regulation, Building Official Nathan Katona told The Dispatch. The new short-term rental ordinance, approved by the city council Oct. 7, aims to create guidance and structure around operating short-term rentals, he said.
“We’re not trying to make life difficult,” Katona said. “We want people to have short-term rentals, and we want the neighborhood to feel comfortable with it.”
What new rules come with the ordinance? How will owners know about the changes? Are short-term rentals subject to paying the city’s 2% hotel tax now?
What new rules come with the new ordinance?
The new ordinance defines short-term rentals as any residential dwelling, or portion of the dwelling, that is offered for rent for fewer than 30 consecutive days. That excludes hotels, bed-and-breakfasts, hospitals, group homes and mobile lodgings, like tents, campers and recreational vehicles.
Under the ordinance, short-term rental owners must apply for a permit, which must be renewed annually for $50. They must also designate a local property manager, who lives in Lowndes County and must be available at all times to respond to guest complaints, concerns or compliance issues while also acting as the property’s liaison with the city.
Once the application is approved and a permit is granted, the owner is required to post the permit number clearly within the unit, along with information like approved parking locations, noise policies and emergency contact information, among other things.
Likewise, a sign must be posted outside the property that is clearly legible from the street displaying the rental’s license number, a contact for the local property manager and the phone number for the city’s permitting office to reach about complaints or violations.
The idea, Katona said, is to legitimize property owners while protecting guests with clear safety information and giving neighbors a contact for any concerns or complaints.
“There’s a lot of people that are concerned about Airbnbs being a thing, and they may feel better about it if it’s regulated, if they know which homes are operating as an Airbnb versus just having a party on the weekends,” Katona said. “Now that sign will say this is the person responsible. This is the number you can call. If not, call the permit office, and then we can remove the permit.”
What about the 2% hotel tax?
The state of Mississippi collects a 7% sales tax on hotel and motel rooms, and some cities, including Columbus, also impose a 2% local tax on hotels and motels. In 2017, the Mississippi Department of Revenue announced short-term rental lodgings would also be considered taxable entities, according to reporting from the Associated Press.
Then in 2025, state lawmakers amended the tax law to explicitly include rentals brokered through third-party entities, like Airbnb and VRBO.
But the 2% tax doesn’t apply to short-term rentals unless the governing authority formally votes to include them and notifies the state department at least 30 days before it takes effect. Until the ordinance was passed, Katona said the city hadn’t included short-term rentals among the taxable entities, which he said put hotels and motels already paying the tax at a disadvantage.
“We want (owners to receive revenue from short-term rentals), but they’re taking that revenue away from a hotel,” Katona said. “So that’s money coming from the city, and it’s not fair to the hotel. … You’re already more advantageous just because you get your own home, you get your own place, but now on top of that, you’re not having to pay that 2% tax that the hotel down the road is.”
When a guest books a short-term rental through the owner or through a platform like Airbnb, the total price includes the applicable sales and local taxes. The platform or owner then remits the payment to MDOR, which distributes the city’s share – including the 2% tax – in a monthly disbursement.
Are short-term rental owners applying for permits?
Since the council passed the new ordinance on Oct. 7, Katona said there have only been a few short-term rental owners applying for a permit.
He hopes to see that number increase over the next six months as the city works with Airbnb to identify short-term rentals within city limits and notify owners of the changes coming with the ordinance. Airbnb currently has roughly 200 listings in Columbus, Katona said.
“We are also working to send (Airbnb information) that basically would define which rentals are specifically in the city limits, and then Airbnb would be able to notify them, ‘Hey here’s the new ordinance,’ and just kind of make a page where those owners would … be told about the new ordinance,” Katona said.
Until word gets out, Katona said the city is holding off on strict enforcement while waiting for owners to be notified of the new requirements and finalizing registration with MDOR to begin charging the 2% tax.
“I would definitely say six months from now, 100% (it will be enforced),” he said. “Everyone would have known the word and things like that. There’s not a specific date just because we’re waiting on other agencies.”
McRae is a general assignment and education reporter for The Dispatch.
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Quality, in-depth journalism is essential to a healthy community. The Dispatch brings you the most complete reporting and insightful commentary in the Golden Triangle, but we need your help to continue our efforts. In the past week, our reporters have posted 37 articles to cdispatch.com. Please consider subscribing to our website for only $2.30 per week to help support local journalism and our community.
