Tennessee has become a hub for travelers seeking the comfort and convenience of short-term rentals, offering a diverse array of accommodations that cater to a wide range of preferences and budgets. From the vibrant streets of Nashville, known for its country music heritage and bustling nightlife, to the peaceful Smoky Mountains offering serene getaways and outdoor adventures, the state provides a plethora of options for visitors. Short-term rentals in Tennessee, regulated by both state and local ordinances, aim to balance the growth of the tourism industry with community interests, ensuring that these accommodations contribute positively to the local economy while maintaining neighborhood tranquility. Property owners are encouraged to comply with registration, taxation, and safety requirements, providing guests with safe, reliable, and enjoyable lodging experiences. This approach supports the flourishing short-term rental market in Tennessee, making it an attractive destination for both tourists and investors alike.

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 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:

• Nashville prohibits rentals for longer than 30 days.
• Knoxville caps rental periods at 29 days.
• Chattanooga limits rentals to no more than 28 days.

In Tennessee, short-term rentals are subject to specific state and local tax requirements. The state imposes a 7% sales tax on short-term rentals, defined as rentals for periods of less than 90 consecutive days. Additionally, there is a state hotel tax of 1% for whole-house rentals, resulting in a combined total tax rate of 8% for these properties. However, if the rental is a hotel or room, the state hotel tax increases to 6%, making the total tax rate 13% for these types of rentals.

Property owners or managers must collect and remit these taxes on the rental's total sales price, which includes all associated fees such as cleaning and pet fees. Compliance with these tax regulations requires registering with the local jurisdiction where the property is located and ensuring timely tax payments