Memphis, TN Hotels & Lodging: Transient Occupancy Tax (2026)

Chapter 5-20 of the Memphis Code levies a privilege tax on hotel occupancy. Section 5-20-2 states the city 'levies a privilege tax upon the privilege of occupancy in a hotel of each transient' and, 'except as provided below, such tax shall be in the amount of four percent of the consideration charged by the operator for such occupancy' (as last amended by Ord. No. 5937, § 1, eff. 4-8-2025). A lower 1.7% rate applies only inside the tourism development zone and tourism surcharge district described in Ordinance No. 5583.

'Hotel' is defined broadly in Section 5-20-1 to include 'any hotel, inn, tourist camp, tourist court, tourist cabin, motel, or any place in which rooms, lodgings or accommodations are furnished to transients for a consideration', but the definition carves out small properties: hotels that 'meet, at all times, both (i) 45 and fewer rooms and (ii) a maximum charge of $35.00 or less per paid occupied room night' fall outside the tax entirely. 'Transient' means anyone occupying a room for fewer than 90 continuous days; guests who stay 30 continuous days or more get a refund of tax already collected, per Section 5-20-3(B).

Collection runs through the operator, who must add the tax to every invoice and remit it to the city treasurer 'not later than the twentieth day of each month for the preceding month' under Section 5-20-4(A). Operators keep a 2% collection allowance if payment isn't delinquent. Revenue funds sports-authority bond debt service, the NBA arena, and tourism promotion under Section 5-20-9.