How Memphis Handles Hotels & Lodging: A Practical Guide

Memphis maintains 200 local ordinances across all categories, and 3 of those deal specifically with hotels & lodging. Here is a breakdown of what the city actually requires, what is prohibited, and where Memphis falls on the strict-to-permissive spectrum compared to other cities.

Transient Occupancy Tax

Hotels and short-term rentals in Memphis collect a combined 13.7% lodging tax: 5% Memphis hotel-motel tax, 1.7% Shelby County tourism tax, plus 7% Tennessee state sales tax. Revenue funds tourism marketing, FedExForum, and convention facilities.

Key details: City rate: 5%. County rate: 1.7%. State rate: 7% sales tax. Combined: ~13.7%. Funds: Tourism, FedExForum, convention.

Failure to collect or remit triggers state and city tax liens, 25% penalty, interest, and possible business-license revocation plus criminal tax-evasion charges.

Hotel Living Wage

Memphis Code Chapter 18-49 requires city contractors and recipients of city economic-development incentives to pay employees a defined living wage indexed annually. Hotel workers benefit only when hotels receive PILOT tax breaks or city contracts; otherwise federal $7.25 minimum applies.

Key details: Code chapter: Memphis Ch. 18-49. Coverage: City contractors + PILOT recipients. Wage range: ~$13-15/hr indexed. State preemption: TCA 50-2-112 limits scope.

Contractors violating the living wage face contract suspension, repayment of incentives, debarment from future city work, and EDGE clawback provisions for PILOT recipients.

Hotel Worker Retention

Unlike Los Angeles or Long Beach, Memphis has no hotel worker retention ordinance requiring new owners to retain incumbent staff after sale or rebranding. Tennessee right-to-work and at-will employment doctrines plus state preemption block such local mandates.

Key details: Memphis mandate: None exists. State posture: Right-to-work. Federal floor: WARN Act 60-day notice. Union coverage: Selected properties only.

No local violations exist because no ordinance applies; affected workers may pursue federal WARN Act claims or unfair-labor-practice charges through the NLRB.

If you are coming from a city with tighter rules, you will find Memphis gives residents more flexibility on hotel worker retention.

The Bottom Line

Memphis's hotels & lodging rules are a mixed bag. Some areas are strict, others are relaxed, and the details matter. The best approach is to check the specific rule that applies to your situation rather than assuming Memphis is broadly strict or permissive.

These rules come from Memphis's publicly available municipal code. For complete penalty schedules, exemption details, and answers to common questions, see the individual ordinance pages throughout this guide.