.png)
Tennessee has no statewide short-term rental license; cities set the rules, and Nashville restricts rentals the host doesn't live in. Stays owe 7% state sales tax plus local occupancy taxes.
Yes, short-term rentals are legal in Tennessee. The state has a supportive regulatory environment for short-term rentals, but there are specific regulations that hosts must follow.
In Tennessee, a statewide definition of a short-term rental (STR) is established under the Tennessee Short-Term Rental Unit Act. According to this legislation, a short-term rental unit is defined as a residential dwelling that is rented wholly or partially for a fee for a period of less than 30 continuous days. This includes a variety of residential structures such as cabins, houses, condominiums, apartments, and timeshares. Importantly, this definition excludes hotels, motels, bed and breakfast establishments, and bed and breakfast homestays.
In Tennessee, the statewide registration requirement for short-term rentals (STRs) mandates that hosts must register with the Tennessee Department of Revenue and obtain a sales tax certificate to collect and remit taxes. While no state license is required, hosts must also secure county and city business licenses, each typically involving a fee of around $15 per property. The registration process at the state level generally takes about 10 business days to complete.
For specific cities like Nashville, Knoxville, and Chattanooga, additional local regulations apply. For instance, Nashville differentiates between "owner-occupied" and "non-owner-occupied" STRs, each with distinct operational rules and permit requirements. Knoxville and other cities may impose their own limitations on rental periods and require safety inspections and adherence to local zoning laws.
In Nashville and Davidson County, the Metro Codes Department is responsible for issuing permits for short-term rental properties. They offer two types of permits: owner-occupied and non-owner occupied, with specific rules and zoning requirements for each. Website: Nashville.gov.
For nearby cities and counties, the following departments handle short-term rental licensing:
In Tennessee, the definition of a short-term rental is a residential dwelling rented out for less than 30 consecutive days. This standard is part of the Tennessee Short-Term Rental Unit Act. However, different cities within the state may have more restrictive rules:
Stays of fewer than 90 days owe 7% state sales tax plus local sales tax, and the city or county charges a local occupancy tax. Since July 1, 2025, the first 30 days of any stay are taxable. Airbnb and Vrbo collect state and local sales tax and local occupancy taxes on bookings made through them; for direct bookings, you remit sales tax to the state and occupancy tax to your city or county.
There is a statewide safety requirement for short-term rental hosts. The Tennessee Code § 68-120-112 outlines safety requirements for short-term rental hosts, including:
For more details, visit the Tennessee Code § 68-120-112.
Lodge Compliance is not a licensed tax or financial advisor. Therefore nothing in the above article should be construed as tax, legal, or financial advice. Contact your local tax office for information regarding your personal circumstance.
.png){kind=logo}
