DETROIT (Michigan News Source) – The city of Detroit’s attempts to implement a tax on short-term rentals such as Airbnb have ended as the city discovered it would not be allowed under state law.

The City Council had previously believed it would be allowed and asked city planners to do a feasibility study on taxing short-term rentals. But city officials now say they misread the state statute.

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“Therefore, the City of Detroit does not currently have the authority to impose the 2% excise tax on persons engaged in the business of providing rooms for dwelling, lodging, or sleeping purposes, including short term rentals, as previously indicated in our report,” wrote David Whitaker, director of the city’s Legislative Policy Division in a July 3 memo.

According to a 2024 report on the city of Detroit’s housing market, Detroit had 129,000 owner households and 122,000 renter households.