PANAMA CITY, Fla. (WMBB) — Panama City commissioners approved a new tax on Tuesday for short-term rentals. But it will only impact visitors staying at motels, hotels and vacation rentals like Airbnb’s. 

“This business tax is only for the person who is spending the money to stay at the Air BnB,” Panama City Commissioner Jenna Haligas said.

But some Airbnb owners said the tax could disrupt their business.

“I think it’s going to impact how many people we can get to book in our properties,” Airbnb owner Tracy Smith said.

Smith said she already pays her fair share of taxes.

“I was disappointed that they were adding yet another tax,” Smith said. “Especially for the short-term rentals. We have two small little shipbuilder cottages in St. Andrews and we really have really contributed to the community in my opinion.”

But commissioner Josh Street said the new tax closes a loophole in the business license tax that didn’t initially apply to short-term rentals. 

Commissioners expect the tax to generate $500,000 annually. 

“Our goal is to take what we can build into consumption-based taxes and try to reduce our millage rates,” Panama City Commissioner Josh Street said.

Smith said the new tax will reduce her profit margin. She said she may leave the industry.

But commissioners said the new tax will be in line with taxes implemented in Panama City Beach. The new tax goes into effect immediately.