The Hotels Want Your Airbnb Taxed at Twice Their Rate. Airbnb Is Lobbying for 3%. Either Way, the Quiet Years Are Over.

On May 21, a Democrat from St. Joseph and a Republican from Vassar stood up in Lansing and introduced a bill that would tax your short-term rental at twice the rate of the hotel down the road. The hotel industry loves it. Airbnb hates it — because Airbnb is backing a completely different tax.

If you own a short-term rental in Northern Michigan, or you’re eyeing one this summer, you now have two competing bill packages fighting over your booking revenue. Neither has passed. Both tell you exactly where this is heading.

The Hotel-Backed Plan: 6% Excise, a Statewide Registry, and No More Flying Under the Radar

House Bill 6026 would create a statewide Short-Term Rental Act with three big pieces: a mandatory registry of every STR in Michigan, a database to back it up, and a new 6% excise tax on short-term rental stays. The revenue would split evenly between the municipality where the rental sits and Pure Michigan’s tourism marketing fund.

Here’s the part that matters for your spreadsheet. STRs already pay Michigan’s 6% use tax, same as hotels. Stack the new excise on top and a short-term rental stay gets taxed at roughly 12% at the state level — double what a hotel guest pays. The Michigan Restaurant & Lodging Association and the American Hotel & Lodging Association both endorsed the package publicly, which tells you whose fingerprints are on the framing.

Its companion, House Bill 6027, is the trade: local governments get clear authority to regulate STRs however they want, as long as the rules don’t amount to a total ban. Townships that have been improvising ordinances for a decade would finally have state law behind them.

The Airbnb-Backed Plan: A 3% Local Tax That Hits Hotels Too

The competing package — House Bills 5138 through 5140, introduced last fall with co-sponsorship from our own Rep. John Roth of Interlochen — takes the opposite approach. It would let counties and local governments put a 3% excise tax on all short-term accommodations to a public vote: hotels, motels, and STRs alike, with the money going to local infrastructure and essential services.

Airbnb endorsed it within days, projecting it could send more than $20 million a year to Michigan local governments. Traverse City’s mayor voiced support. Traverse City Tourism, which collects a 5% assessment from larger lodging operators to fund its marketing budget, pushed back hard — arguing Airbnb has spent years benefiting from that promotion without paying into it.

So the fight, stripped of the press-release language: hotels want STRs taxed more than hotels, and Airbnb wants everyone taxed a little, locally, with voter approval. Roth himself called the fall bills “vehicle bills” — unlikely to pass as written, but useful for forcing the conversation. We’d read the May package the same way. Something passes eventually; it may not be either of these.

Why This Lands Harder Here Than Almost Anywhere in Michigan

Northern Michigan is ground zero for this fight. Reporting from The Ticker has put the region’s STR count in the thousands — on the order of nine thousand across the northern Lower Peninsula. Whole stretches of the M-22 corridor, downtown Frankfort, and the cottage streets of Glen Arbor run on short-term rental income for a meaningful slice of the year.

Working in this market, we see the underwriting side of it constantly: buyers penciling out a purchase where projected rental income is the difference between “we can swing this” and “we can’t.” A 6% haircut on gross bookings is not a rounding error in that math. On a cottage grossing $45,000 a season, the hotel-backed plan skims about $2,700 a year; the Airbnb-backed plan, about $1,350.

And no — you don’t just pass it to guests. Nightly rates up here already sit at what the market will bear in July and August. A new tax either dampens bookings at the margin or comes out of your margin. Usually some of both.

The Registry Is the Bigger Story Than the Tax

Here’s the piece most owners are skipping past. HB 6026 doesn’t just tax — it creates a statewide registry and database of every short-term rental and its owner. Critics have flagged the privacy side of that. But for enforcement, it’s transformative.

Right now, most townships enforce STR rules on complaints and detective work. Traverse City pays about $23,000 a year for software that scrapes listing sites to find unlicensed rentals, and it still only pursued a few dozen violations in a recent year. A statewide registry turns that whole cat-and-mouse game into a lookup table.

If any version of this passes, the era of the quietly unlisted, un-permitted, un-inspected cottage rental ends. If your operation depends on nobody official knowing it exists, that’s not a strategy anymore. It’s a countdown.

What We’d Do Right Now — Owner or Buyer

If you already own: underwrite your own property at the 12% state-level scenario and see if it still works. If it does, nothing that passes will sink you. Get your local license current — Traverse City’s vacation home rental license runs $200 with a $200 annual renewal, and township requirements vary wildly across Leelanau, Antrim, and Benzie counties.

If you’re buying this summer: price the deal assuming the hotel-backed version becomes law, then treat anything softer as upside. Verify the township ordinance yourself — not the listing agent’s summary of it — because HB 6027 would hand townships even more explicit regulatory power than they have today. Our full breakdown of local rules, zones, and permit regimes is in the 2026 Guide to Northern Michigan Short-Term Rentals, and it pairs well with this post.

And a question worth sitting with before you write an offer: if the rental income disappeared entirely, would you still want this place? Up here, that answer separates the buyers who ride out regulatory noise from the ones who panic-sell into it.

The Honest Read

Janel has watched Lansing take runs at short-term rental law for the better part of a decade, and the pattern is consistent: bills get introduced, industries line up, committees sit on them, and the map stays a township-by-township patchwork. That could happen again here. Neither package has moved out of committee as of this writing.

But the direction of travel is one-way. Hotels, the tourism bureaus, Airbnb, and both parties in Lansing now agree on the premise that STRs should be registered and taxed — they’re only arguing about how much and who collects. Plan for the strictest version on the table, and you’ll never be the owner scrambling when the gavel finally drops.

Thinking about buying a rental up here, or wondering what the rule changes mean for the one you own? Reach out anytime — this is the stuff we like talking about.

Taylor Brown, Realtor

Taylor@taylorbrownrealtor.com