Franklin, TN Short-Term Rentals: Taxes & Fees (2026)

Franklin's transient lodging tax framework layers four distinct taxes on each short-term rental stay (defined as residential occupancy for less than 30 continuous days). The state-level layer comprises two pieces administered by the Tennessee Department of Revenue: the 7% statewide sales tax on accommodations under Tennessee Code Annotated Section 67-6-202, and the 1.5% state hotel/motel privilege tax (the 'occupancy tax') that applies to stays of less than 90 days in any place defined as a 'hotel,' which under TCA 67-4-1402 includes short-term rental units. The local layer comprises two pieces. Williamson County administers a 4% hotel/motel occupancy tax (originally authorized by a private act of the General Assembly and updated under the 2021 general-law framework codified at TCA 67-4-1425) administered by the Williamson County Business Tax Department at 615-790-5732. The City of Franklin separately imposes a 4% city hotel-motel tax under Title 5 of the Franklin Municipal Code (Municipal Finance and Taxation), administered by the Franklin Finance Department; monthly filing reports are required of all operators. The combined approximate burden is 16.5% (7% + 1.5% + 4% + 4%) on each STVR stay. Franklin's $15 business license registration fee (the standard Tennessee minimal-activity business license, classification 3 for accommodations) applies per property; properties with under $10,000 in annual taxable gross receipts file the minimal-activity license rather than the full business tax. Tennessee's marketplace facilitator law (Public Chapter 759 of 2020, effective January 1, 2021, codified at TCA 67-4-708 and 67-6-501) requires short-term rental marketplaces (Airbnb, VRBO, Booking.com, Tripadvisor, others meeting the definition) to collect and remit both the state sales tax and the state and local occupancy taxes on platform-booked stays directly to the Tennessee Department of Revenue. The Department then distributes the local-tax portions to Franklin and Williamson County. Operators booking only through Airbnb or VRBO therefore typically have all four tax layers collected for them on platform bookings; however, the operator remains liable for any direct-booked stays (personal website, email bookings, repeat-guest direct arrangements) and must register with the Tennessee Department of Revenue, Williamson County Business Tax Department, and the City of Franklin to remit the full stack on those stays. Stays of 30 or more continuous days are exempt from both the state and local hotel/motel taxes (state sales tax may still apply to certain components).