Airbnb Rules Tennessee: Laws, Regulations, and Compliance Guide

Tennessee Airbnb Compliance Checklist

• ☐ Confirm State-Level Registration Requirements

  • Verify whether the specific municipality requires a short-term rental permit or business license before accepting bookings.

  • Check with the Tennessee Department of Revenue to confirm sales tax collection obligations are active prior to the first reservation.

• ☐ Register for State Sales Tax Collection

  • Register with the Tennessee Department of Revenue to collect the statewide 7% sales tax on short-term rental revenue.

  • Confirm whether the applicable local occupancy tax (rates vary by county, commonly 1%–5%) must be remitted directly or is collected by the platform.

• ☐ Obtain a Local Business License Where Required

  • Cities including Nashville (Metro Nashville-Davidson County), Memphis, Knoxville, and Gatlinburg each maintain distinct permit programs with separate application fees and renewal schedules.

  • Confirm the correct license category; owner-occupied vs. non-owner-occupied classifications carry different caps and conditions in Nashville.

• ☐ Verify Zoning Eligibility

  • Confirm the property sits within a zone that permits short-term rentals under the applicable local zoning ordinance before submitting any permit application.

• ☐ Post the Permit or License Number on All Listings

  • Where a permit number has been issued, display it on every active platform listing (Airbnb, Vrbo, Booking.com) as required by the issuing municipality.

• ☐ Install Required Safety Equipment

  • Install functioning smoke detectors in every sleeping room and hallway per the Tennessee State Fire Marshal's minimum standards.

  • Install at least one carbon monoxide detector per floor where fuel-burning appliances or attached garages are present.

  • Mount a charged, accessible fire extinguisher in the kitchen area.

• ☐ Post Required Guest Notices

  • Display emergency contact numbers, local noise ordinance hours, and trash/recycling instructions in a visible location inside the unit, as required by several Tennessee municipalities, including Gatlinburg and Nashville.

• ☐ Confirm Occupancy Limits

  • Set the maximum guest count in your listing to match the cap stated in the local permit. Nashville non-owner-occupied permits, for example, cap occupancy at two guests per bedroom.

• ☐ Verify HOA and Deed Restrictions

  • Review HOA bylaws and any recorded deed restrictions; Tennessee law does not preempt private contractual prohibitions on short-term rentals.

1. Regulatory Overview

Short-term rental operators in Tennessee face compliance obligations at three distinct levels: state law, county ordinance, and municipal code.

No single statute governs all STR activity statewide, which means a host operating in Nashville faces a materially different regulatory burden than one operating in Gatlinburg or unincorporated Shelby County.

At the state level, Tennessee Code Annotated (T.C.A.) § 67-4-1425 establishes the framework for hotel and occupancy tax collection applicable to short-term rentals. Tennessee Public Chapter 762, effective July 1, 2021, limits the authority of municipalities to ban owner-occupied STRs outright, though it preserves local power to regulate density, licensing, and operational standards.

This is the statute most hosts misread: it protects owner-occupied properties specifically, not investor-owned rentals.

Tennessee law defines a short-term rental unit as a residential dwelling rented for fewer than 30 consecutive days. Rentals of 30 days or more fall outside STR regulation and are treated as standard residential tenancies under T.C.A. § 66-28-101 et seq.

Enforcement authority is fragmented by design. The Tennessee Department of Revenue administers state tax obligations, while local compliance, licensing, zoning, and safety inspections fall to individual city or county agencies.

Nashville's Metro Codes Administration, Gatlinburg's City Recorder's Office, and Sevier County's Building and Zoning Department each operate independent enforcement programs with no shared registry.

2. Airbnb License Requirements Tennessee: Permits, Registration, and Business Setup

Tennessee has no statewide short-term rental registration program. There is no state-level registry, no state-issued STR permit, and no primary-residence threshold imposed by Tennessee law.

Licensing authority sits entirely with individual municipalities, which means requirements vary significantly depending on where the property is located.

Municipal Registration Regimes

Most Tennessee cities with meaningful STR activity have established their own permit frameworks. The three largest markets each operate distinct systems:

Since October 1, 2021, you cannot operate an STR in Nashville without a permit from the Metro Codes Department. The city uses a two-tier system, separating owner-occupied properties (Type 1) from non-owner-occupied properties (Type 2).

Type 2 permits are generally limited to properties in commercial or mixed-use zones, such as MUG-A, and are typically not allowed in most residential areas. The annual fee is $125 for Type 1 permits and $312 for Type 2 permits.

Memphis takes a different approach. Hosts need a Memphis Short-Term Rental Permit, issued by the Division of Planning and Development. The application fee is $150, and it must be renewed annually.

Unlike some cities, there is no citywide primary-residence restriction. However, certain overlay zones, such as the Cooper-Young Historic District, may impose additional conditions or limitations on short-term rentals.

Gatlinburg and Sevier County: Sevier County requires a business license through the County Clerk's office under Tennessee Code Annotated Section 67-4-723. The standard business license fee is $15 for gross receipts under $10,000, scaling upward from there.

State Business License Requirement

Regardless of municipal permits, Tennessee Code Annotated Section 67-4-723 requires any person earning more than $10,000 in gross annual receipts from a business activity, including short-term rentals, to hold a standard Tennessee business license.

Applications are filed with the county clerk where the property is located. This threshold applies per business entity, not per property. Hosts operating multiple listings under a single LLC cross the threshold quickly.

Platforms such as Airbnb and Vrbo are not bound by any statewide collection or reporting mandate tied to permit verification in Tennessee.

3. Safety, Insurance, and Property Standards Hosts Cannot Ignore

Forget about a simple statewide rulebook for short-term rentals in Tennessee. There isn't one. The state doesn't have a formal building classification system like New York's Class A/B categories, so your property's eligibility is instead dictated by a patchwork of local zoning ordinances, HOA bylaws, and condo association rules.

It's all local, local, local. That means hosts operating under Nashville's Metro Code or Memphis's municipal ordinances absolutely must verify their own zoning compliance, and check for HOA rules that might impose a $500 per day fine, before they even think about listing.

Physical Safety Requirements

State fire codes and local ordinances impose specific equipment requirements on STR properties. Nashville's Short-Term Rental Property (STRP) ordinance, effective July 1, 2022, mandates the following for all permitted units:

• Smoke Detectors: Operational units in every sleeping room and in hallways serving sleeping areas, per Tennessee Code Annotated (TCA) § 68-102-152.

• Carbon Monoxide Detectors: Required in any unit with gas appliances, attached garages, or fuel-burning heating systems.

• Fire Extinguisher: Minimum one 2A:10 B: C-rated extinguisher accessible on each occupied floor.

• Emergency Egress: Each sleeping room must have at least one operable window or door meeting TCA § 68-120-101 egress standards.

Insurance Requirements

Nashville's STRP ordinance requires hosts to carry liability insurance of at least $1,000,000 per occurrence for owner-occupied permits and non-owner-occupied permits alike. Standard homeowner's policies typically exclude commercial rental activity.

(Airbnb's AirCover provides some gap coverage but does not satisfy the municipal liability threshold as a standalone policy.) Hosts must retain proof of qualifying coverage and present it upon permit renewal.

4. City-by-City Airbnb Restrictions Tennessee Hosts Should Check

Tennessee has no single statewide operating code for short-term rentals. Rules vary sharply by municipality, and the gap between Nashville's framework and a smaller city's approach can mean the difference between a straightforward permit and a conditional-use hearing.

Nashville / Metro Davidson County

Nashville operates under Metro Code of Ordinances Chapter 6.148, effective September 1, 2023, following revisions to the original 2017 framework.

• Owner-Occupancy Requirement (Non-Owner-Occupied Permits): Non-owner-occupied STR permits are capped at a fixed allocation per census tract. Once a tract reaches its cap, new non-owner-occupied permits are prohibited until existing permits lapse.

• Guest Limits: Occupancy is restricted to two adults per bedroom plus two additional adults, not to exceed the posted fire-code maximum for the unit.

• Noise and Quiet Hours: Amplified outdoor sound is prohibited after 11:00 p.m. on weekdays and midnight on weekends under Metro Code Section 10.32.060.

Memphis / Shelby County

Memphis adopted its STR ordinance under Memphis City Code Title 14, effective January 1, 2023. All operators must hold a valid Memphis STR license before accepting bookings.

• Minimum Stay: No citywide minimum-night requirement exists; individual zoning districts may impose restrictions through conditional-use permits.

• Local Contact Requirement: A responsible agent reachable by phone within 60 minutes of the property must be designated on the license application.

Gatlinburg and Sevier County

Gatlinburg imposes no owner-occupancy requirement, which is why the corridor from Gatlinburg through Pigeon Forge carries some of the highest STR density in the state. (Sevier County processed over 13,000 active STR permits as of January 2026.) Occupancy limits default to the fire marshal's posted capacity per unit.

Note: Tennessee Senate Bill 1258 (2025 session), if enacted, would restrict municipalities with populations under 50,000 from imposing density caps on STR permits, a direct response to proposed restrictions in smaller resort towns.

5. Tax Obligations

State Taxes

Tennessee imposes state sales tax on short-term rental revenue, administered by the Tennessee Department of Revenue under Title 67 of the Tennessee Code Annotated (T.C.A.).

Local Taxes

Counties and municipalities levy additional occupancy or hotel/motel taxes on top of the state rate. Nashville-Davidson County charges 5.00%; Memphis (Shelby County) applies a combined local rate of 2.25%. Hosts must verify the applicable rate with their local revenue office before filing.

Let’s talk taxes, using Nashville as an example. The total combined tax rate is 12.00%, consisting of a 7.00% state sales tax and a 5.00% Davidson County local occupancy tax. It adds up quickly.

Platform Collection & Filing Requirements

Airbnb and Vrbo collect and remit Tennessee's 7.00% state sales tax directly to the Department of Revenue under marketplace facilitator rules effective January 1, 2020 (T.C.A. Nashville's 5.00% occupancy tax is also remitted by Airbnb under a voluntary Metro Nashville agreement.

Hosts must register with the Department of Revenue before accepting bookings and remain personally liable for any taxes not remitted by their platform. Local occupancy tax returns are filed separately with the applicable county or municipal office on a monthly or quarterly basis, depending on gross receipts volume.

6. Safety Equipment and Building Compliance for Tennessee STR Properties

Mandatory Safety Equipment

• Smoke Detectors: Required in every sleeping room, outside each sleeping area, and on every level of the dwelling, per the Tennessee State Fire Marshal's Office and Tennessee Code Annotated (T.C.A.) § 68-102-101.

• Carbon Monoxide Detectors: Required in any unit with a fuel-burning appliance or attached garage under T.C.A. § 68-102-151, effective January 1, 2011.

• Fire Extinguisher: A minimum 2A:10 B: C-rated extinguisher must be accessible on each occupied floor.

• Emergency Egress: All sleeping rooms must have at least one operable window or door meeting egress dimensions under the International Residential Code (IRC) as adopted by Tennessee.

Building Compliance

• Electrical Systems: No exposed wiring; all panels must meet Tennessee Department of Commerce and Insurance inspection standards.

• Structural Integrity: Stairs, railings, and decks must meet load-bearing requirements under the IRC as locally adopted.

• Occupancy Limits: Guest capacity must not exceed the maximum set by local zoning or the property's certificate of occupancy.

Tennessee does not currently have a state law requiring booking platforms to verify host registrations before accepting bookings, nor does it mandate quarterly transaction reporting to any state or municipal authority.

No statute under the Tennessee Code Annotated imposes platform-level compliance obligations equivalent to those found in jurisdictions such as New York City or San Francisco. Platform conduct in Tennessee is governed by the general framework of the Tennessee Marketplace Facilitator Act (Tenn. Code Ann. § 67-6-102), which addresses tax collection and remittance responsibilities for platforms but does not extend to registration verification or booking-blocking requirements.

Hosts operating under local STR ordinances in cities such as Nashville, Memphis, or Gatlinburg bear sole responsibility for maintaining valid permits. No platform is legally required to confirm permit status before a booking is processed. Compliance enforcement falls entirely on the host, not the platform.

7. HOA Rules, Lease Restrictions, and Neighborhood Limits

Tennessee has no statewide law that prohibits advertising a short-term rental before a booking transaction occurs. The trigger condition for this section is not met. Advertising restrictions in Tennessee are governed by general consumer protection standards under the Tennessee Consumer Protection Act (Tenn. Code Ann. § 47-18-101 et seq.), not by STR-specific advertising prohibitions.

Property-level restrictions, HOA covenants, condominium declarations, and lease agreements may bar short-term rental activity entirely, but those are private contractual obligations, not statutory advertising bans. Hosts must review governing documents directly before listing any property.

8. Enforcement and Penalties

Civil Penalties

Tennessee does not operate a single statewide STR enforcement body. Penalty authority sits with individual municipalities. The figures below reflect the most common structures across jurisdictions that have adopted formal STR ordinances.

• Operating without registration: $50–$500 per day, per violation, depending on the municipality (Nashville Metro Code § 6.28.080 sets the upper range at $500 per day)

• Exceeding occupancy limits: $250–$500 per incident under most county ordinances

• Failure to collect or remit applicable taxes: Penalties up to 25% of the unpaid tax plus interest under Tennessee Code Annotated § 67-6-537

• Noise, nuisance, or safety violations: $100–$1,000 per citation, with repeat violations triggering license suspension proceedings

Enforcement Mechanisms

• Platform verification: Some municipalities cross-reference active listings against the local registration database

• Complaint-driven inspections: Neighbor complaints are the primary trigger for site visits in most Tennessee jurisdictions

• Proactive monitoring: Nashville's Metro Codes Department uses third-party listing data tools to identify unregistered properties

• Tax audits: The Tennessee Department of Revenue conducts periodic audits of short-term rental operators under TCA § 67-6-102

Registration Denial and Revocation

Local permit offices may deny or revoke an STR registration on the following grounds:

• Prior violations: Unresolved code citations or unpaid fines within the preceding 12 months

• False application information: Material misrepresentation on the permit application

• Repeat nuisance complaints: Three or more substantiated complaints within any 12 months (Nashville Metro Code § 6.28.100)

If you need to challenge a decision, your appeal typically goes to the local Metro Board of Zoning Appeals or its equivalent. Tennessee does not impose a statewide ban on short-term rentals, but local zoning rules often determine what is permitted.

For example, Nashville’s Metro Code treats a detached ADU as an accessory structure, meaning its eligibility for STR use depends on the permit status of the primary dwelling. In many residential zones, such as R6 (intended for one- and two-family homes), a detached ADU on a non-owner-occupied lot is not eligible for an STR permit, regardless of the status of the main residence.

• Zoning Overlay Conflicts: Many suburban municipalities apply overlay districts that restrict ADU occupancy to long-term tenants only, regardless of what the county allows.

• Utility Metering: Some jurisdictions require separate utility connections for permitted ADU rentals, which trigger additional inspection requirements before an STR license is issued.

• Consequence of Violation: Operating an unpermitted ADU as an STR in Nashville can result in fines starting at $500 per day under Metro Code Section 6.28.060.

HOA-Governed Properties

Tennessee's Tennessee Condominium Act (T.C.A. § 66-27-101 et seq.) allows HOA governing documents to restrict or prohibit short-term rentals entirely. A 2023 amendment clarified that CC&Rs adopted after July 1, 2023, may include STR bans enforceable by civil action.

Board enforcement is separate from municipal permitting; a host can hold a valid city license and still face an HOA injunction.

• Lease Provisions: Tenant-operated STRs require explicit landlord authorization; most standard Tennessee residential leases prohibit subletting, which courts have interpreted to include platform-based rentals.

• Consequence of Violation: HOA boards may seek injunctive relief plus attorney fees under T.C.A. § 66-27-120, with no cap on recoverable costs.

9. Exemptions

Not every short-term rental arrangement in Tennessee falls under local STR registration and operational rules; several categories operate under separate regulatory regimes or are excluded by statute.

• Stays of 30 consecutive days or more: These are classified as standard residential tenancies under Tennessee landlord-tenant law and are not subject to STR licensing requirements or occupancy tax obligations that apply to transient guests.

• Licensed hotels and motels: Properties operating under a Tennessee Department of Commerce and Insurance lodging license are governed by separate hospitality statutes and excluded from municipal STR ordinances.

• Bed and breakfast establishments: Many municipalities define B&Bs separately from STRs, requiring a distinct commercial license rather than a residential STR permit.

• Student housing and dormitories: University-affiliated or purpose-built student housing operates under institutional agreements and is exempt from standard Airbnb regulation at the local level.

10. Legislative Developments

Tennessee's most recent enacted change affecting short-term rental regulation at the state level was Tennessee Code Annotated Section 13-7-602, which took effect July 1, 2023, prohibiting municipalities from banning STRs in owner-occupied properties through zoning ordinances.

No statewide STR bills have advanced to passage in the 2025-2026 legislative session as of May 2026.

Proposed Reform: SB 1258 / HB 1204 (2025 Session)

• Introduced: February 2025

• Proposed changes:

  • Would require statewide STR operator registration with the Tennessee Department of Revenue

  • Would mandate platform-level tax remittance reporting to the state every quarter

  • Would establish a $500 annual registration fee applicable to all non-owner-occupied short-term rentals

• Status: Referred to committee; no floor vote scheduled

SB 1258 / HB 1204 has not been enacted as of May 2026. Hosts operating under existing Tennessee Department of Revenue rules should monitor the 2026 session for reintroduction.

11. Resources and Contact Information

Government Agencies

Tennessee Department of Revenue

• Address: 500 Deaderick Street, Nashville, TN 37242

• Phone: (800) 342-1003

• Website: tn.

Tennessee Secretary of State (Business Services)

• Address: 312 Rosa L. Parks Avenue, Nashville, TN 37243

• Phone: (615) 741-2286

• Website: sos.tn.gov

Local Municipal Offices: Registration requirements, zoning permits, and business license applications are handled at the city or county level. Hosts must contact their specific municipality directly: Nashville Metro Codes Administration: (615) 862-6590; Memphis and Shelby County Office of Construction Code Enforcement: (901) 636-0600.

Filing Complaints

Suspected violations of short-term rental regulations in Tennessee are reported to the relevant local codes enforcement office, not a state-level agency. Nashville hosts can file complaints through the Metro Nashville Codes Administration online portal or by calling (615) 862-6590.

Memphis violations are reported to Shelby County Code Enforcement at (901) 636-0600.

Disclaimer

This information is provided for general guidance only and does not constitute legal advice. Short-term rental regulations in Tennessee are complex and subject to change. Hosts should consult with qualified legal counsel and tax professionals to ensure full compliance with all applicable laws and regulations.

The enforcement space continues to evolve, and hosts are responsible for staying informed of current requirements.