Join Thousands of Hotels Thriving with roommaster
See how roommaster handles rates, taxes, and reporting for your property. Book a walkthrough with our team.
Table of Contents
Hotel And Lodging Tax In Tennessee 2026: TOT Rates By City
Tennessee caps combined city and county hotel tax at 8%, and Nashville's 2023 increase specifically helped fund the new Titans stadium. See 2026 rates by city and where properties get compliance wrong.
August 28, 2026
6
min. read
Summarize with AI
TL;DR
- Tennessee has no single official name for this tax; state and local sources use "hotel occupancy tax," "local occupancy tax," and "hotel/motel tax" interchangeably for the same charge.
- "Hotel tax," "lodging tax," "occupancy tax," and "bed tax" all describe this same local charge, set city by city and county by county.
- A statewide cap bars a municipality from raising its rate once the combined city and county total in an incorporated area reaches 8%.
- The long-stay exemption follows the common 30-consecutive-day rule.
- No voter referendum is required for this tax specifically; a 2021 law shifted most counties from one-off state legislative acts to ordinary commission resolutions.
- No Tennessee-specific fee-transparency law was found; only the federal FTC rule currently applies.
- Even churches and other nonprofit lodging operators must collect and remit the tax, under a state supreme court ruling that it taxes the activity of occupying a room, not the operator's tax status.
How Tennessee's Hotel and Lodging Tax Works
Tennessee has no single official name for its hotel tax; it's commonly called the local occupancy tax, hotel/motel tax, or hotel occupancy tax depending on the source, but they all describe the same local charge. Since a 2021 law, most counties can adopt or change the tax by ordinary commission resolution, and municipalities by council ordinance, a simple majority vote, not a special state legislative act like before.
There's no voter-referendum requirement for this tax specifically, that requirement applies to Tennessee's separate local option sales tax, a different levy entirely. What does constrain rates is a statewide cumulative cap: once the combined city and county total in an incorporated area reaches 8%, neither can raise its rate further.
The tax applies to hotel and short-term rental stays under 30 consecutive days, and it isn't optional for nonprofit operators either. A state supreme court ruling holds that the tax applies to the activity of occupying a room, not the operator's tax-exempt status, so churches and other 501(c)(3) lodging operators still have to collect and remit it.
Tax Rates and Extra Fees
Because each city and county sets its own rate up to the statewide 8% combined cap, the total varies significantly by location. Here's where the major Tennessee markets stand as of 2026.
| City / county | Rate | Notes |
|---|---|---|
| Nashville / Davidson County | 7%, plus a separate flat $2.50/night fee | Raised from 6% in 2023 specifically to help the Sports Authority bond the new enclosed football stadium; $2.00 of the flat fee funds Music City Center convention center debt and operations |
| Chattanooga (city) | 4% | Combined with Hamilton County's own 4%, sits exactly at the statewide 8% cumulative cap |
| Hamilton County | 4% | Combined with Chattanooga's city rate, reaches the state cap |
| Franklin (Williamson County) | 5% | Raised from 4% effective January 2026, the city's first change since 2004 |
| Murfreesboro (Rutherford County) | 5% | Raised from 2.5% effective 2019 |
| Rutherford County | 5% | Earmarked for fire service in unincorporated areas |
| Shelby County | 5% | Levied under an amended 1969 private act, administered by the County Clerk's office |
| Knoxville | 4% | Raised from 3% effective January 2025, with revenue broadened from convention-center debt alone to general tourism promotion |
| Memphis | 3.5% | The city's own site confirms 3.5%, not the 4% some secondary sources cite |
| Sevierville | 3% | Part of a broader hospitality tax ordinance; two-thirds of revenue is earmarked for tourism advertising and infrastructure |
| Sevier County (unincorporated areas) | 3% | Revenue splits roughly half to tourism and infrastructure, half to education |
| Pigeon Forge | 2.5% | A distinctive three-way split: one third each to tourism promotion, tourism activity, and the general fund |
Rates change after a council or commission vote, so treat this table as a starting point and confirm the current published rate with the specific city before filing.
Tennessee doesn't use a guest-facing tourism district assessment the way California does. Its actual analogous mechanism, a Tourism Development Zone, is a tax-increment financing tool rather than an added line on the guest folio: it captures growth in existing state and local sales tax, and in Nashville's case a dedicated slice of the hotel tax itself, within a defined zone to bond public facilities like a convention center. Eight of these zones currently operate around the state, but since it isn't an added percentage charge, there's no separate district rate to add to a guest's bill the way a California TBID would show up.
Collection and Remittance
The guest pays the tax, and the property remits it, generally monthly. Murfreesboro and Memphis both confirm monthly filing due the 20th of the following month, and no jurisdiction was found using quarterly filing for this tax. Separately, any local government operating a Tourism Development Zone has to file an annual usage report with the state Comptroller within 90 days of fiscal year-end, a distinct state-facing accountability report, not the tax remittance itself.
Exemptions From Tennessee's Hotel Tax
Tennessee follows the common rule: stays of 30 consecutive days or more are exempt from the local occupancy tax, confirmed across both state guidance and individual city ordinances.
Common Mistakes Hotels Make With TOT Compliance
- Assuming a nonprofit lodging operator is exempt. State supreme court precedent holds the tax applies to the activity of occupying a room, not the operator's tax status, even a church-run lodging facility has to collect and remit it.
- Missing Nashville's flat per-night fee. It's a separate charge from the 7% percentage tax, not part of it, and needs its own line on the folio.
- Assuming a city can keep raising its rate. Once the combined city and county total in an incorporated area hits the statewide 8% cap, as Chattanooga and Hamilton County already have, neither can raise its rate further.
- Confusing the occupancy tax referendum rule with sales tax. Tennessee requires a voter referendum for local option sales tax changes, but not for this hotel tax specifically.
- Using a stale rate after a recent increase. Franklin, Knoxville, and Nashville have all raised their rates in the past few years, a property should confirm the current figure rather than assume an older one still applies.
- Not retraining front desk staff after a rate change. When a city ordinance changes the rate, as Franklin's did in 2026, staff quoting the old number to walk-in guests creates disputes at checkout.
Where A PMS Fits Into TOT Compliance
None of the above is about software. It's about a Tennessee property tracking its specific city and county rate against the statewide 8% combined cap, and, for a Nashville property, keeping the percentage tax and the flat per-night fee as genuinely separate charges. Where a PMS actually helps is in configuring each component as its own tax code and pulling revenue reports by date range for monthly filing. roommaster lets properties configure tax codes per rate, so a city or county rate change is a configuration update once, not a manual recalculation on every folio.
See how roommaster simplifies multi-property tax reporting.
Frequently Asked Questions
1. Does Tennessee have a statewide hotel tax rate?
No. Tennessee's hotel tax is set city by city and county by county, though a statewide rule caps the combined city and county total in an incorporated area at 8%.
2. What is Tennessee's hotel tax?
Tennessee's hotel tax, commonly called the local occupancy tax or hotel/motel tax, is set locally by each city and county, layered together up to the statewide 8% combined cap.
3. What is Tennessee's lodging tax?
Lodging tax is the same charge as Tennessee's local occupancy tax, just a different common name for it, set locally rather than as one statewide figure.
4. Do Tennessee voters have to approve hotel tax increases?
No, not for this specific tax. Since a 2021 law, most counties and cities can adopt or change the rate by ordinary commission resolution or council ordinance.
5. How long can a guest stay in Tennessee before the hotel tax stops applying?
30 consecutive days, matching the common rule used in most other states.
6. Does Tennessee require hotels to disclose the total price before booking?
No Tennessee-specific law requires this. Only the federal FTC rule, which applies nationwide, currently requires total-price disclosure.
7. Who is responsible for collecting and remitting Tennessee's hotel tax?
The property collects the tax from the guest and remits it monthly to the city or county, even if the property itself is operated by a nonprofit organization.
