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Tennessee Revenue clarifies lodging tax: sales tax <90-day rule, and marketplaces must remit occupancy tax in some cases
Summary
The department reminded hotel and short-term rental operators that sales tax applies for stays under 90 continuous days, occupancy tax is usually local but marketplaces that book short-term rentals must remit occupancy tax to the department under recent law changes.
Katie Julian and Billy Trout explained that sales tax applies to lodging furnished for less than 90 continuous days and that the "continuous days" count resets if a guest leaves and returns. Julian noted local occupancy tax is traditionally collected by local governments, but a law change requires short-term rental marketplaces to remit occupancy tax to the department when bookings occur through that marketplace.
Kimberly Collins added audit context: if a business refunds sales tax because a stay exceeds 90 days, the auditor will expect records documenting the refund to the occupant. The presenters pointed to a new short-term rental unit manual and an upcoming webinar (September) dedicated to short-term rental taxation.
