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

Under Sec. 16-614 of the short-term rental article, every operating-permit application must come with a fee: seventy dollars for a Type 1 permit (an owner-occupied unit in a residential district) and one hundred twenty dollars for Type 2 permits (non-owner-occupied units in nonresidential districts) or Type 3 permits (units grandfathered in from before March 1, 2017). The business license & tax office collects the fee, will not prorate it, and will not refund it once a permit issues. Type 1 and Type 2 permits can be renewed annually for a separate fifty-dollar renewal fee paid at least fourteen business days before expiration; Type 3 permits cannot be renewed at all.

Separately, Sec. 16-651 makes every operator responsible for the taxes tied to renting rooms, naming three specifically: the city's hotel occupancy privilege tax, state sales tax, and state gross receipts tax. Because gross receipts tax can trigger a business-license requirement, the section warns that an operator may need both a city and a Knox County business license, not just the city STR permit. None of this is discretionary: Sec. 16-612 requires every applicant to acknowledge in writing that they have read the city's occupancy privilege tax requirements before a permit will issue.

§ 13-7-602, grandfathers ordinances like this one that predate the statute but limits how far the city can go in adding new restrictions, so the fee and tax structure set out here is the operative local rule rather than a moving target.