AG: renters must collect state, local taxes

The state attorney general has issued an opinion (HERE) declaring that those making short term rentals through websites such as and should be paying state and local sales taxes along with any local hotel-motel taxes.

The opinion was requested by Rep. Dale Carr, R-Sevierville, and the Tennessee Hospitality and Tourism Association (with hotel-motel members already collecting the taxes) is happy with the “ruling.”

The association press release is below.

News release from Tennessee Hospitality and Tourism Association
NASHVILLE, Tenn. – The Tennessee Hospitality and Tourism Association (TnHTA), the statewide association representing all segments of the Hospitality and Tourism industry in Tennessee, praises this week’s ruling issued by the Tennessee Attorney General that short term rentals such as AirBnB and VRBO type lodging entities have to collect and remit both sales and occupancy / lodging taxes.

The ruling solidifies TnHTA’s position to level the play field for the lodging industry as it relates to short-term rentals. This week’s ruling confirms that all short term rentals have to pay Tennessee sales and lodging taxes. In summary, the TN Attorney General (AG), Herbert H. Slatery has just ruled this week that short-term rentals are required to pay both sales and lodging taxes just as all other conventional lodging properties already do in Tennessee.

Ken Maples, the TnHTA Chairman of the Board and Pigeon Forge hotel owner stated “In the past decade, the internet has transformed the way we buy and sell goods and services, resulting in an explosion of new businesses. It is now extremely easy for an individual to advertise and rent a property such as a condo, cabin, house, or even a room for short periods of time. Since these short-term rentals are fundamentally no different than regular lodging properties, it is only fair that those who make a profit from on-line or advertised short term rentals by owner should pay all applicable local and state sales and lodging taxes.”

“We are excited that the AG has opined that short-term rentals are legally subject to both sales and lodging taxes. In some counties, the amount of tax lost is significant – Since Davidson County began to enforce the collection of the tax it is estimated that over $1.2 million in just lodging taxes will be collected in 2016 on short-term rentals” said Greg Adkins, TnHTA President & CEO.

Adkins also stated that “This week’s Attorney General Opinion is very good news for the hospitality and tourism industry as well as the State of Tennessee and local governments. For several years, hoteliers have been working to achieve a level playing field for taxing short term rentals and the AG ruling issued reinforces our position on this issue and demonstrates a growing commitment to providing marketplace tax equality.”