Aldermen are set to consider making short-term rentals in the city subject to the 2% hotel tax.
The board’s regular meeting on Tuesday will include one of at least two public hearings on proposed changes to the rental housing section of Unified Development Code to include and set requirements for short-term rentals.
Mayor Lynn Spruill said the proposed amendment was sparked by legislative changes making all short-term rentals eligible for state and local lodging taxes.
“We’re just wanting to be able to get the 1%, 2% (tax), make sure the … accommodations are appropriate and have some measure of understanding of how many we’ve got,” Spruill told The Dispatch on Thursday. “That helps us also understand how it’s impacting, for example, our residential neighborhoods.”
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.
During the 2025 session, state lawmakers amended the tax law to explicitly include rentals brokered through third-party entities, like Airbnb and VRBO, so long as the governing authority formally votes to include them.
Both Columbus and Lowndes County enacted ordinances late last year making short-term rentals subject to the 2% hotel/motel tax. Spruill said the city reviewed both similar ordinances in both Columbus and Oxford while drafting the amendment.
The changes in the drafted amendment are designed to identify how many short-term rentals are operating in the city, Spruill said, and ensure those properties meet basic safety, occupancy and posting requirements.
Along with outlining the definition of short-term rentals, the amendment – as it is currently drafted – would require owners to purchase a $15 annual license for their rental property.
Each unit would then be subject to posting requirements, including displaying basic information inside the unit, like the maximum occupancy, approved parking locations, 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.
Noting her support for the amendment, Ward 1 Alderwoman Kim Moreland said the posting requirements in particular could be helpful for visitors who are new to the area.
“It gives (visitors) a chance to have a way to get in touch with somebody if an emergency happens and that kind of thing,” she said.
If the ordinance is approved, short-term rental owners would have 60 days to register their property with the city. The registration would then be updated annually, though renewal could be denied for properties that don’t adhere to requirements.
A second public hearing on the amendment is scheduled for the July 21 board meeting.
“Unless I hear otherwise and get some feedback that we need to do some tweaking,” Spruill said.
It’s not the first time the city has considered regulations for short-term rentals.
Aldermen in 2019 agreed to consider regulations for short-term rentals after receiving citizen complaints of transient tourism in single-family neighborhoods. Those initially included a proposed $300 annual license fee and a 30-night annual rental limit for those properties, along with a requirement property owners live in the homes they offered for short-term lodging.
After months of debate and public hearings, including some that were heated on both sides of the debate, the board delayed acting on regulations for short-term rentals.
Spruill said she hasn’t heard much pushback about the changes so far. The lower cost and lighter regulatory approach may avoid objections that stalled short-term rental regulations in 2019, she said.
“Nobody’s been giving me any kind of feedback, and so at this point, it would appear to me that those who were interested before were more concerned about the types of regulation, and this is now not a problem,” Spruill said. “It’s not onerous in the sense of a cost. It’s $15 a year, and so beyond that, I don’t know what else is going to create some dissension or concern in the community, but we will see.”
McRae is a general assignment and education reporter for The Dispatch.
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