PANAMA CITY, Fla. (WMBB) — Panama City could soon expand the business license tax. Panama City Commissioners held a first reading to approve a 1% tourism tax on Airbnb’s, hotels and short term rentals.

The potential would not lead to an increase in taxes for residents.

“The merchant fee that we have as a city was one of the ways that we could extend a one percent tax on those specific short term rentals,” Panama City Commissioner Josh Street said. “Which is mostly people outside of our area.”

Street and other commissioners moved forward to amend the business license tax to include hotels, motels and tourist camps on Tuesday.

“It includes hotel stays, short-term rentals,” Street said. “And this is a way of us trying to capture a lot of those tourism visits that are happening to the city. Whether it be short-term, hotels you name it. And be able to put it back into our tax-base.”

Panama City officials said Airbnb and other vacation rental websites do not pay the full tax they owe.

“Panama City has about 200 Airbnb’s and multiple hotels so they’ll all be participating and ensuring that we collect the tax fairly,” Street said. “And it happens across the city.”

Street said the 1% tax on lodging would lead to $420,000 in Panama City tax base annually.

“Well it does go into the general fund but I’m hopeful that seeing us capture more and more tourism dollars is going to help us offset and make Panama City a more affordable place to live,” Street said.