Revenue Class: Local Taxes

Fund: General

Account No.: 31920

Description: Occupancy tax on hotel or motel room rentals, imposed by private act or ordinance.

Authorization: T.C.A. § 67-4-1401 et seq.; T.C.A. § 6-55-102; and various private acts

Requirements or Restrictions: Tax must be approved by ordinance of the governing body in the same manner all ordinances are approved for the municipality and tax cannot exceed four percent if levied under T.C.A. § 67-4-1402. Revenue received for the tax must be designated and used for the promotion of tourism and tourism development if the tax is levied after July 1, 2021. T.C.A. § 67-4-1403. Any valid levy of hotel/motel tax or any authorization to levy hotel/motel tax that existed prior to July 1, 2021, remains in full force and effect. A municipality with an authorized preexisting hotel/motel tax before July 1, 2021, shall not change the initial use of the revenue except in accordance with T.C.A. § 67-4-1403. 

Pursuant to T.C.A. § 67-4-1403(c), all municipalities that levy a hotel/motel tax, whether authorized by statute, private act, ordinance or resolution are required to submit an annual written report to the Tennessee Department of Tourism Development within ninety (90) days following the end of the municipality's fiscal year. The form, along with FAQs can be found online at https://www.tn.gov/tourism/statewide-partners/hotel-motel-tax-annual-reporting.html.  Questions about submitting the form can be submitted directly at TDTD.Research@tn.gov.

Current Rate: Public Chapter 372 passed in 2025 created a new cap on Hotel/Motel tac at a total of 8% between the city and the county. Cities currently with higher taxes are grandfathered in. Hotel operator is allowed to retain two percent of the amount of the tax due for collecting the tax. T.C.A. § 67-4-1405 (b). Please refer to the following document for new legislation regarding short-term rental units and 30-day occupancy: https://www.tn.gov/content/dam/tn/revenue/documents/notices/local_occupancy/occupancy25-07.pdf

Frequency of Payment: Monthly by the 20^th.

Late Pay Penalty: Interest is charged at 12 percent per annum plus a penalty of one percent for each month taxes are delinquent. T.C.A. § 67-4-1408.

Collection: Monthly. The municipality has the authority to collect delinquent taxes by any means available by law including issuing distress warrants and the seizure of assets. T.C.A. § 67-4-1408(d).