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Hotel And Lodging Tax In Nashville 2026: TOT Rate And Rules
Nashville's 2023 hotel tax hike to 7% came with a built-in expiration date: the increase would have automatically sunset if the Sports Authority hadn't issued bonds for the new enclosed Titans stadium by January 1, 2024.
August 28, 2026
6
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TL;DR
- Nashville hotel stays carry a combined 16.75% tax: 9.75% Tennessee and Davidson County sales tax plus Metro's 7% Hotel Occupancy Privilege Tax, on top of a flat $2.50 per-room, per-night fee.
- Hotel tax, lodging tax, occupancy tax, and bed tax all describe the same Metro charge that shows up on a Nashville hotel folio.
- The occupancy tax rose from 6% to 7% on July 1, 2023, and the increase carried a built-in sunset clause tied to stadium bond financing.
- Stays of 30 consecutive days or more are exempt from the tax, matching Tennessee's statewide threshold.
- Of the flat $2.50 nightly fee, $2.00 funds Music City Center convention center debt and operations, and $0.50 is earmarked by state law for a dedicated tourism event and marketing fund.
- Metro Nashville restricts non-owner-occupied short-term rental permits to commercial and mixed-use zoning districts, a tighter rule than the owner-occupied home-sharing allowed citywide.
- Monthly hotel occupancy tax returns are due to Metro's Finance Collections Office by the 20th of the month following collection.
How Nashville's Hotel and Lodging Tax Works
Nashville's hotel tax is Metro Nashville-Davidson County's Hotel Occupancy Privilege Tax, a 7% local charge layered on top of Tennessee's 7% state sales tax and Davidson County's 2.75% local option sales tax, plus a flat $2.50 per-room, per-night fee that applies regardless of the room rate.
The Metro Council raised the occupancy tax rate from 6% to 7% through BL2022-1529, adopted December 20, 2022 and effective July 1, 2023. The ordinance built in a contingency: if the Sports Authority of the Metropolitan Government of Nashville and Davidson County had not issued revenue bonds for a new, enclosed football stadium by January 1, 2024, the additional 1% would have automatically expired on that date. The Sports Authority issued roughly $760 million in bonds toward the project, alongside $500 million in bonds from the State of Tennessee, so the increase stayed in effect.
The tax applies to hotels, motels, and short-term rentals for stays of fewer than 30 consecutive days, the same threshold used statewide in Tennessee. Because Nashville and Davidson County are a consolidated Metro government, there is no separate city rate layered on top of a county rate the way a reader might expect in a non-consolidated market.
Tax Rates and Extra Fees
A Nashville hotel bill stacks general sales tax, Metro's occupancy tax, and a flat nightly surtax that funds specific, named projects rather than the general fund.
| Tax component | Rate | Notes |
|---|---|---|
| Tennessee state sales tax | 7% | Applies statewide to the room rate |
| Davidson County local option sales tax | 2.75% | Combines with the state rate for 9.75% total sales tax |
| Metro Hotel Occupancy Privilege Tax | 7% | Raised from 6% on July 1, 2023 under ordinance BL2022-1529 to help fund the new enclosed Titans stadium |
| Flat nightly surtax | $2.50 per room, per night | $2.00 funds Music City Center convention center debt and operations; $0.50 is earmarked by state law for a tourism event and marketing fund |
| Combined guest-facing tax | 16.75% plus $2.50 per night | 9.75% sales tax plus 7% occupancy tax, stacked with the flat fee |
The 1% increase and the flat fee are tracked as separate revenue streams in Metro's own hotel tax fund reporting, not blended into one number, because each piece is legally restricted to a different use: stadium bond debt service for the 2023 increase, convention center operations for $2.00 of the flat fee, and tourism marketing for the remaining $0.50.
Collection and Remittance
The guest pays the tax at checkout, and the operator remits it to Metro's Department of Finance Collections Office. Returns are due monthly, by the 20th of the month following collection from the guest, and a postmark by that date satisfies the deadline.
Metro maintains a separate reporting form and process for short-term rental operators, distinct from the standard hotel occupancy tax form used by traditional hotels and motels, reflecting that Metro tracks STR compliance somewhat separately from hotel compliance even though both owe the same combined rate.
Exemptions From Nashville's Hotel Tax
A stay of 30 consecutive days or more is exempt from the occupancy tax, matching the threshold Tennessee uses statewide. Tennessee courts have held that the tax attaches to the act of occupying a room rather than to the operator's own tax status, so a nonprofit or religious organization operating lodging in Nashville still has to collect and remit the tax even though the organization itself may be tax-exempt for other purposes.
Common Mistakes Hotels Make With TOT Compliance
- Using the pre-2023 6% rate. Properties that haven't updated their tax configuration since the July 2023 increase are under-collecting the occupancy tax by a full percentage point.
- Forgetting the flat nightly fee applies regardless of room rate. The $2.50 charge doesn't scale with the price of the room, so a percentage-only tax calculation misses it entirely.
- Assuming a nonprofit operator is exempt. Tennessee's courts have confirmed the tax applies to the occupancy itself, not the operator's tax-exempt status, so a church-run guesthouse or similar lodging still owes the tax.
- Applying owner-occupied short-term rental rules to a non-owner-occupied unit. Metro restricts non-owner-occupied permits to commercial and mixed-use zoning districts, a much narrower rule than owner-occupied home-sharing, and using the wrong permit type risks fines of up to $500 a day.
- Missing the 20th-of-the-month filing deadline. Metro's Finance Collections Office treats a return as late if it isn't postmarked by the 20th of the month following collection.
- Blending the stadium-bond increase with the convention center surtax when budgeting. Metro tracks the 2023 rate increase, the $2.00 convention center fee, and the $0.50 marketing fee as separate, legally restricted revenue streams, and a property that lumps them into one number can misreport which fund its tax dollars support.
Where A PMS Fits Into TOT Compliance
None of this is about software fixing a legal obligation. But a property management system that configures Davidson County's combined sales tax, Metro's 7% occupancy tax, and the flat $2.50 nightly fee as three distinct tax codes, rather than one blended rate, makes it much easier to catch a stale rate left over from before the July 2023 increase. A booking engine that shows the full tax and fee total before checkout, and revenue reports that break totals down by date range, also make the monthly filing to Metro's Finance Collections Office a matter of pulling a report rather than reconstructing it by hand.
See how roommaster simplifies multi-property tax reporting.
Frequently Asked Questions
1. Does Nashville have its own hotel tax rate?
Yes. Metro Nashville-Davidson County charges a 7% Hotel Occupancy Privilege Tax plus a flat $2.50 per-room, per-night fee, on top of the combined 9.75% Tennessee and Davidson County sales tax.
2. What is Nashville's hotel tax?
It is Metro's Hotel Occupancy Privilege Tax, 7% since July 1, 2023, plus a flat $2.50 nightly fee, for a combined guest-facing charge of 16.75% plus $2.50 per night once general sales tax is included.
3. What is Nashville's lodging tax?
Lodging tax is another name for the same charge as the hotel tax and occupancy tax: Metro's 7% Hotel Occupancy Privilege Tax plus the flat $2.50 nightly fee, layered on top of the 9.75% combined sales tax rate.
4. How long does a guest have to stay in Nashville to be exempt from the hotel tax?
A stay of 30 consecutive days or more is exempt from the occupancy tax, matching the threshold used statewide in Tennessee.
5. Does Nashville require hotels to disclose all fees upfront?
Neither Metro Nashville nor the State of Tennessee has a dedicated hotel fee-transparency ordinance specific to lodging. Mandatory charges like resort fees still fall under Tennessee's general consumer protection laws against deceptive pricing.
6. Who is responsible for filing and remitting Nashville's hotel tax?
The operator that leases or rents the room collects the tax from the guest and remits it to Metro's Department of Finance Collections Office by the 20th of the month following collection.
7. Why did Nashville's hotel tax increase in 2023?
The Metro Council raised the occupancy tax from 6% to 7% under ordinance BL2022-1529 to help repay roughly $760 million in Sports Authority bonds and $500 million in state bonds issued for a new, enclosed stadium for the Tennessee Titans. The increase carried a sunset clause that would have expired it automatically if those bonds hadn't been issued by January 1, 2024.
