STARKVILLE – All short-term rentals in Starkville will be subject to the 2% hotel tax starting Aug. 20 and will need to pay $35 to register with the city.
Alderman on Tuesday unanimously approved changes to the rental housing section of the Unified Development Code to include and set requirements for short-term rentals. The originally proposed registration fee was $15, but the board decided to raise the registration fee to $35 and leave the annual renewal fee at $15.
“I would have certainly liked to have charged $150 … for the application fee and at least $50 for the annual fee,” Vice Mayor Roy A. Perkins told The Dispatch after the meeting. “… I actually wanted it to be the same amount (set by) the city of Columbus and the Lowndes County Board of Supervisors, and the reason I wanted a higher amount for the application and the renewal fee is so that we can utilize those funds to help cover and defray administrative costs.”
Lowndes County and Columbus have similar ordinances that were enacted last year after the state legislature passed a new law that allows short-term rentals to be subject to the existing local hotel taxes. Columbus and Lowndes registration fees of $125 and $150, respectively.
Mayor Lynn Spruill told The Dispatch she believes the $35 registration fee will be high enough to cover administrative costs, but because the city does not know how many short-term rentals there are, she cannot guarantee it will.
“I literally have no idea how many STRs we’ve got in town. No clue.” Spruill told The Dispatch.
“… There are anecdotal comments about our neighborhood being taken over by Airbnbs, so that is the sole use of a neighborhood house that could conceivably be a young family’s starter home, for example. … We don’t know that until we get information that gives us some sort of ability to understand what’s going on.”
Since this ordinance requires short-term rentals to identify themselves as either hosted, unhosted or dedicated vacation rental, Spruill said the city will compile data to confirm if these reports are accurate and then work out where to go from there.
The state of Mississippi collects a 7% sales tax on hotel and motel rooms, and some local governments, including Starkville, impose an additional 2% local tax on the same properties. The city also imposes an additional 1% parks and recreation tax that applies to hotel and motel rooms. This amendment only imposes the 2% tax on local short-term rentals.
While short-term rental providers will be on the hook for the registration and renewal fees, those who stay in the rental will pay the 2% tax just as they would for a hotel room. 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 in a monthly disbursement.
“I want to be really really clear, somehow this seems to get lost in this discussion, this is not imposing a new tax. This is the existing rate that we have on our hotels,” Spruill said at the meeting.
In addition to the tax and registration, short-term rentals will also now be required to include information for renters in their units.
Each unit would then be subject to posting requirements, including displaying basic information inside the unit, like the maximum occupancy, trash disposal information, the current short-term rental license and noise and nuisance policies, among others.
Owners would have to post a small sign outside units displaying the property’s license number, a contact for a local property management and contacts for the Community Development Department and Starkville Police Department.
Short-term rentals are not required to become compliant with all these changes by Aug 20. or they will face the same infraction and fine schedule as long term rental.
Other business
In other business Tuesday, the board:
■ approved $60,000 to go toward subsiding another year of American Airlines service to the Golden Triangle Regional Airport (6-1, Perkins opposed); and
■ accepted the low-bid of $3,457,850 from Double S Inc. to build well No. 9 for a planned water supply expansion.
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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.
