Cookeville council approves first reading of stricter hotel-occupancy tax rules; effective date set for Feb. 1, 2026

The Cookeville City Council approved first reading of ordinance O25-11-21, which updates the municipal hotel/motel occupancy tax code to add collection tools and clearer enforcement provisions.

City staff (speaker identified as the presenter in the transcript) described the key changes: making it unlawful to operate a hotel whose occupancy-tax payments are delinquent 30 days or more; clarifying interest calculations; changing how deductions for 30-plus-day continuous stays are handled to comply with recent changes in the Tennessee Code; allowing the city to audit all hotels owned by a single owner if one hotel is delinquent (with the owner liable for audit costs); and making an owner liable for the city’s collection costs if the city files suit. Staff recommended an effective date of Feb. 1, 2026 to allow time to notify and coordinate with hotels.

One council member emphasized the seriousness of the enforcement goal: "When these hotels and motels collect tax off people staying, they are paying that tax, the city of Koothill, and the hotel's collecting it. So for them not to pay that onto the city of Koothill is akin to theft," (Unidentified Council Member, first reference SEG 807). Council discussion included reminders that the changes do not affect operators who are already complying.

A council member noted the actual overall hotel/motel tax rate in Cookeville is 10%, of which 7 percentage points go to the county and 3 percentage points go to the city; staff said the proposed enforcement tools should help collect the city’s portion more reliably.

Council approved the first reading by voice vote, 5–0. The ordinance will return for second reading and adoption procedures with the Feb. 1, 2026 effective date included in the draft.