Is a short-term rental legal in Gatlinburg, TN?
Short-term rentals ('tourist residencies') are legal and widespread in Gatlinburg but require a permit. Any dwelling rented to tourists for less than 30 days must obtain an annual Tourist Residency Permit from the building official and pass an annual fire/life-safety inspection (Gatlinburg Municipal Code Title 5, Ch. 7, §§ 5-701 to 5-705). The base permit fee is $200 per residence (covers up to two bedrooms) plus $75 for each additional bedroom (§ 5-703). Zoning limits location: tourist residences are permitted in R-1, R-2, R-3 residential and C-1 Tourist Commercial districts but are expressly prohibited in the R-1A and R-2A residential districts (Zoning Ordinance §§ 701.5, 702.1, 704.1, 706.9). No primary-residence requirement and no city-wide cap on the number of permits. Guest lodging is taxed at roughly 12.75% (7% TN state sales tax + 2.75% Sevier County local option sales tax + 3% Gatlinburg hotel/motel tax), and operators also owe a 1.25% city gross-receipts privilege tax. Tennessee's Short-Term Rental Unit Act (T.C.A. §§ 13-7-601 to 13-7-606) grandfathers pre-existing STRs and bars the city from retroactively banning them. Penalty for operating without a permit is a fine up to $50 per rental (§ 5-705).
At a glance
| Unhosted whole-home rental | Conditional |
| Hosted rental (host present) | Yes |
| Primary residence required | No |
| Guest cap | None verified |
| Rules apply to stays under | 30 days |
Whole-home STR ('tourist residency') is allowed but conditional on zoning: permitted in R-1, R-2, R-3 and C-1 Tourist Commercial districts (Zoning Ord. §§ 701.5, 703.1, 705.1, 706.9) and prohibited in R-1A (§ 702.1) and R-2A (§ 704.1). Municipal Code § 5-701 defines a tourist residency as renting a residence 'on an overnight, weekly or other basis of less than thirty days duration' to tourists/visitors, so rentals of 30+ days fall outside the permit requirement (min_stay_exempt_days = 30). Note: some vendor guides cite '89 days'; that figure conflates the hotel/motel tax 'transient' definition (less than 90 continuing days, § 5-601(4)) with the permit definition. Hosted renting of rooms in one's principal dwelling is treated as a home occupation limited to five tourist rooms with one off-street space per room (Zoning Ord. § 409.2). No fixed max-guest number in code; occupancy is set by the building official under Life Safety 101/IBC, and a threshold of >12 occupants (or >3 stories / >5,000 sq ft) reclassifies the dwelling and removes the fire-sprinkler exemption (§ 5-701(1)-(2)).
What you need to operate
| Requirement | Authority | Cost | Official source |
|---|---|---|---|
| Tourist Residency Permit | City of Gatlinburg Building Official / Building & Planning Department Required for every tourist residence (Municipal Code §§ 5-702, 5-703). Owner or the overnight rental agent must obtain it (§ 5-704). Fee set by § 5-703. |
$200 base per residence (includes up to 2 bedrooms) + $75 per additional bedroom renewal: Annual |
source |
| Annual Tourist Residency Inspection (fire/life-safety) | City of Gatlinburg Building Official Municipal Code § 5-702 requires an annual inspection. Structures are reviewed under adopted building codes and NFPA 101 Life Safety Code (§ 5-701). Dwellings >3 stories, >5,000 sq ft, or >12 occupants are classified R-1/R-3 and must have an approved fire sprinkler system (no exemption); smaller units qualify for the T.C.A. § 68-120-101(a)(8)(A) sprinkler exemption. |
Not verified renewal: Annual (concurrent with permit) |
source |
| Zoning verification / permitted-use compliance | City of Gatlinburg Building & Planning Department Property must lie in a district where tourist residences are permitted. Prohibited in R-1A (Zoning Ord. § 702.1) and R-2A (§ 704.1); permitted in R-1 (§ 701.5), R-2 (§ 703.1), R-3 (§ 705.1) and C-1 Tourist Commercial (§ 706.9). R-1 tourist residences must meet off-street parking requirements: minimum 2 on-site spaces (1 for single-bedroom units) per § 701.5.1, plus administrative site-plan review (§ 701.5.3). |
Not verified | source |
| City business / gross-receipts privilege registration | City of Gatlinburg Department of Finance The city levies a 1.25% gross-receipts privilege tax on every business, expressly including renting rooms/accommodations to transients (Municipal Code § 5-201), and has adopted the state Business Tax Act (§ 5-401). Operators must register and remit accordingly. Exact standard business-license fee (commonly $15 city + $15 county under TN law) was not confirmed against an official source in this pass. |
Not verified | source |
Taxes on guests & hosts
| Tax | Rate | Applies to | Platform collects | Official source |
|---|---|---|---|---|
| Tennessee state sales tax (on lodging) | 7% | Gross consideration for accommodations/short-term lodging | Yes | source |
| Sevier County local option sales tax | 2.75% | Gross consideration for accommodations/short-term lodging within Sevier County (incl. Gatlinburg) | Yes | source |
| Gatlinburg Hotel/Motel (occupancy) Tax | 3% | Privilege of transient occupancy (less than 90 continuing days) of any hotel/tourist residence in the city | Not verified | source |
| Gatlinburg city gross-receipts privilege tax | 1.25% | Gross receipts of every business in the city, including renting accommodations to transients (paid by the operator) | No | source |
Enforcement
| Penalties | Renting a tourist residence without first obtaining a Tourist Residency Permit is a violation, with each rental a separate offense; upon conviction the fine is not to exceed $50.00 per violation (Municipal Code § 5-705). |
| Platform liability | Under Tennessee law (effective Jan. 1, 2021), short-term rental unit marketplaces (Airbnb, Vrbo) must collect and remit the state and local sales tax and the local occupancy tax directly to the TN Department of Revenue for stays under 30 continuous days (see tn.gov local occupancy tax page). Whether platforms remit Gatlinburg's separate city 3% hotel/motel tax and the city gross-receipts tax is not established by the sources reviewed. |
| Notes | Sevier County's separate 3% county lodging tax does NOT apply inside Gatlinburg city limits (Sevier County Trustee). Tennessee's Short-Term Rental Unit Act (T.C.A. §§ 13-7-601 to 13-7-606) grandfathers STRs in use before a prohibiting ordinance and limits the city's ability to ban existing units; grandfather status ends on sale/transfer, 30 months of non-use, or three violations of local law (T.C.A. § 13-7-603). As of mid-2026 no reported enforcement crackdown. |
What we could not verify (5)
- Exact standard business-license fee for STR operators (city and county, commonly $15 each under TN Business Tax Act) not confirmed against an official City of Gatlinburg source; § 5-401 adopts the state Business Tax Act but does not state a dollar fee.
- Whether Gatlinburg's city 3% hotel/motel tax and 1.25% gross-receipts privilege tax are collected/remitted by platforms (Airbnb/Vrbo) versus remitted directly by the operator to the city Department of Finance - state law only clearly covers state/local sales and local occupancy tax marketplace collection.
- City of Gatlinburg official permit page (gatlinburgtn.gov) is behind a JavaScript/Cloudflare challenge and could not be machine-fetched; permit fee ($200 + $75/bedroom), annual renewal, and inspection requirements were instead verified against the MTAS-hosted Gatlinburg Municipal Code, which is the authoritative codified source.
- Sevier County local option rate of 2.75% is derived from the official TACIR combined rate of 9.75% for Sevier minus the 7% state rate; not read off a per-jurisdiction line item.
- Application-specific requirements sometimes cited by vendors (proof of insurance, 24/7 local contact, posted occupancy/parking plan) appear on the city's online application but were not verifiable in the codified ordinance or a fetchable official page.
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Sources
- Gatlinburg Municipal Code (Title 5 Ch. 7 Tourist Residency Permits; Ch. 6 Hotel/Motel Tax; Ch. 2 Privilege Tax) - MTAS (official, accessed 2026-07-16)
- City of Gatlinburg Municipal Zoning Ordinance (updated through 2022) (official, accessed 2026-07-16)
- Apply For A Tourist Residency Permit - City of Gatlinburg (official page; behind JS challenge, not machine-fetchable this pass) (official, accessed 2026-07-16)
- Summary of the Short-Term Rental Unit Act - MTAS (T.C.A. 13-7-601 et seq.) (official, accessed 2026-07-16)
- Section 13-7-603 - Effect of ordinance regulating STR use (Justia — unofficial mirror of TN Code; statute substance also covered by the official MTAS summary above) (news, accessed 2026-07-16)
- Tennessee Department of Revenue - Sales and Use Tax (7% state rate) (official, accessed 2026-07-16)
- Tennessee Department of Revenue - Local Sales Tax (2.75% local option cap) (official, accessed 2026-07-16)
- TACIR - Combined State and Local Option Sales Tax Rates (Sevier County 9.75%) (official, accessed 2026-07-16)
- Tennessee Department of Revenue - Local Occupancy Tax (marketplace collection since 2021) (official, accessed 2026-07-16)
- Sevier County Trustee - Lodging Tax (county 3% does not apply in Gatlinburg) (official, accessed 2026-07-16)
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STRWatch publishes educational information about short-term rental regulation, verified against the official sources linked above as of the date shown. It is not legal advice, and rules change — a city can move between our verification passes. For decisions with money at stake, confirm with the authority linked above or a local attorney.