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

Hendersonville'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') under TCA 67-4-1402 that applies to stays of less than 90 days at any place defined as a 'hotel,' which under TCA 67-4-1402 includes short-term rental units. The local layer comprises two pieces. Sumner County imposes a 5% hotel/motel occupancy tax, established under Tennessee's local occupancy tax framework. The City of Hendersonville separately imposes a 4% hotel/motel tax under Ordinance 2023-13 (which raised the city's prior rate from 2.75% to 4%). The combined approximate burden is 17.5% (7% + 1.5% + 5% + 4%) on each STR stay. The Hendersonville city tax is administered by the City Finance Department at 615-264-5317; the city explicitly applies the tax to short-term rental units secured through a short-term rental unit marketplace, with platform-booked stays collected and remitted through the Tennessee Department of Revenue under the state marketplace facilitator regime. Monthly tax returns are due by 4:30 PM on the 20th day of the month following the reporting period (Ordinance 2023-13); operators must retain records for three years to substantiate the tax owed. Late payments accrue interest under the ordinance's delinquency provisions. The Tennessee 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, and others meeting the statutory 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, which then distributes the local-tax portions to Hendersonville and Sumner 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, the Sumner County Trustee, and the City of Hendersonville Finance Department to remit the full stack on those stays. Stays of 30 or more continuous days are exempt from the state and local hotel/motel taxes (state sales tax may still apply to certain components). Note that legal STR operation in Hendersonville also requires a city business license through the Finance Department, separately from the tax registration.