The University of Tennessee, Knoxville

Tennessee County Municipal Advisory Service

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Room Occupancy Tax

Reference Number: MTAS-1862
Tennessee Code Annotated
Reviewed Date: November 07, 2017
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Revenue Class: Local Taxes

Fund: General

Account No.: 31920

Description: Occupancy tax on hotel or motel room rentals, imposed by private act. Rates vary from 1.25 percent to 5 percent.

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 by two-thirds vote of the governing body at two consecutive regularly scheduled meetings; or be approved by referendum, and tax cannot exceed five percent. T.C.A. § 67-4-1402. City cannot assess the tax if the county has already levied an occupancy tax. T.C.A. § 67-4-1425 (a)(2). Additional limitations are found in T.C.A. § 67-4-1425.

Current Rate: Cannot exceed 5 percent. Hotel operator is allowed to retain 2 percent of the amount of the tax due for collecting the tax. T.C.A. § 67-4-1405 (b).

Frequency of Payment: Monthly by the 20th.

Late Pay Penalty: Interest is charged at 12 percent per annum plus a penalty of 1 percent for each month taxes are delinquent. T.C.A. § 67-4-1408.

Exemptions: N/A

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).

Use Restrictions: None unless the governing body specifies such in the authorizing ordinance. T.C.A. § 67-4-1403.

Responsible: