Tennessee Statewide Rule

Tennessee Short-Term Rental Unit Act Preemption

Some RestrictionsApplies statewide across Tennessee (2026)

Key Facts

Statute: TCA Sections 13-7-601 to 603
Grandfather rights: Protected statewide
Local zoning power: Limited but allowed
Tax collection: State and local both

Last verified: September 5, 2026Source: Justia Law

Summary

Tennessee's Short-Term Rental Unit Act limits how local governments can regulate vacation rentals and grandfathers properties operating before local bans took effect.

(a) Except as otherwise provided in subsection (b), an ordinance, resolution, regulation, rule, or other requirement of any type that prohibits, effectively prohibits, or otherwise regulates the use of property as a short-term rental unit shall not apply to property if the property was being used as a short-term rental unit by the owner of the property prior to the enactment of the ordinance, resolution, regulation, rule, or other requirement by the local governing body. The ordinance, resolution, regulation, rule, or other requirement in effect at the time the property began being used as a short-term rental unit is the law that governs the use of the property as a short-term rental unit until the property is sold, transferred, ceases being used as a short-term rental unit for a period of thirty (30) continuous months, or has been in violation of a generally applicable local law three (3) or more separate times as provided by § 13-7-604.

Source: Justia LawView official code

Full Breakdown

The Tennessee Short-Term Rental Unit Act, codified at Tennessee Code Annotated Sections 13-7-601 through 13-7-603, establishes statewide rules governing local regulation of short-term rentals. Local governments may regulate STRs but cannot prohibit a property that was lawfully operating before the local ordinance took effect, preserving vested rights. Cities retain authority over health, safety, occupancy limits, noise, parking, and tax collection. The statute also requires local governments to allow grandfathered owners to continue operating, and platforms must comply with state registration and tax remittance frameworks under sales and occupancy tax law.

Violations & Penalties

Local ordinances banning grandfathered STRs are void; cities may still enforce health, safety, and tax compliance violations.

Frequently Asked Questions

Can a Tennessee city ban short-term rentals outright?

Cities may restrict new STRs in residential zones, but cannot revoke operations of properties lawfully active before the ordinance's effective date under TCA 13-7-602.

Do hosts owe state taxes on Airbnb income?

Yes. Tennessee applies its 7% state sales tax plus local option sales tax to short-term rental charges, and cities or counties may add local hotel/motel occupancy taxes. There is no statewide occupancy tax.

Sources

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