Yes. Most Clarksville and Montgomery County short-term rental owners owe Tennessee sales tax on taxable stays, although Airbnb, Vrbo, or another qualifying marketplace facilitator may collect and remit some taxes for platform bookings. Your responsibilities can still include registration, local occupancy taxes, business licensing, records, and taxes on direct bookings.
If you operate a furnished rental near Fort Campbell, understanding short-term rental taxes in Tennessee is essential before accepting reservations. Tennessee uses different definitions for sales tax, local occupancy tax, and business tax, so a 30-day booking is not automatically treated the same way as a 90-day booking.
This article provides general educational information, not tax or legal advice. Route tax questions to a qualified CPA or tax attorney.
What taxes apply to a short-term rental in Tennessee?
The Tennessee Department of Revenue’s June 2026 Taxation of Short-Term Rental Units manual identifies several potential tax obligations:
- Tennessee state sales tax
- Local option sales tax
- Local hotel, motel, or occupancy tax
- Tennessee business tax
- Potential franchise and excise tax for certain business entities
The tax that applies depends on the property’s location, the length of the stay, the booking method, and whether you operate personally or through a property management company.
Tennessee sales tax on short-term rental stays
Tennessee generally applies a 7% state sales tax to taxable lodging rented for fewer than 90 continuous days to the same person. An applicable local option sales tax is added based on the property’s location.
The taxable sales price may include more than the nightly rate. Required charges such as the following may also be included:
- Cleaning fees
- Nonrefundable pet fees
- Guest booking fees
- Property damage protection fees
- Other mandatory charges connected with renting the accommodation
For an exact Clarksville or Montgomery County rate, verify the property address using the Tennessee Department of Revenue’s current rate resources. Tax rates and local rules can change.
The Tennessee Department of Revenue’s June 2026 short-term rental tax manual is the most authoritative starting point for Tennessee sales tax treatment.
Do Airbnb and Vrbo collect Tennessee taxes for hosts?
Often, yes. A qualifying marketplace facilitator may be responsible for collecting and remitting Tennessee sales tax on bookings processed through its platform. In that situation, the owner is generally not responsible for paying the same sales tax again on those platform transactions.
However, you should not assume that every booking or every tax is covered.
You may remain responsible for:
- Direct bookings made by phone, email, or your own website
- Bookings through a platform that does not qualify as a marketplace facilitator
- Taxes on separately sold goods or services
- Local taxes or reports not covered by the platform’s collection agreement
- Maintaining records showing that platform tax was collected
The Tennessee Department of Revenue explains that marketplace facilitators are treated as the seller for sales and use tax purposes when they meet the applicable requirements. The current manual also identifies a $100,000 Tennessee sales threshold for marketplace facilitators.
Keep platform statements, reservation records, payout reports, and tax summaries. Those documents can help demonstrate which transactions were facilitated and which were booked directly.
What happens with direct bookings?
If you accept a reservation directly, you may be responsible for registering, collecting, and remitting the applicable Tennessee state and local sales tax.
The Department of Revenue’s June 2026 guidance states that property owners, marketplace facilitators, and property management companies with more than $100 per month in taxable service sales must register with the Department and remit sales and use tax, subject to the specific rules that apply to their structure.
Sales tax returns and payments are generally due monthly through Tennessee Taxpayer Access Point, or TNTAP. The Department’s manual states that returns are due by the 20th day of the following month. Even when no taxable direct sales occurred during a reporting period, a required return may still need to be filed.
Before collecting tax, confirm:
- Whether you need a Tennessee sales tax registration.
- Which local option rate applies to the property.
- Whether your booking software calculates tax correctly.
- Whether cleaning and other required fees are included.
- Whether your management agreement assigns collection responsibilities.
Is local hotel or motel tax separate from sales tax?
Yes. Local hotel, motel, tourist accommodation, or occupancy taxes can be separate from Tennessee sales tax.
These local taxes may apply to short-term rental stays and are generally based on the property’s location. A city or county may administer its own tax, while marketplace bookings may be subject to collection and remittance through the Tennessee Department of Revenue under the state’s marketplace rules.
For short-term rental units booked through a qualifying marketplace, the marketplace generally collects and remits applicable local occupancy tax to the Department of Revenue. For direct bookings, the owner or manager may need to collect and remit the tax directly to the appropriate local authority.
The Department’s guidance also distinguishes property management companies from short-term rental marketplaces. A property management company providing vacation lodging services is not automatically treated as a marketplace facilitator for local occupancy tax purposes.
For a Clarksville property, contact the City of Clarksville Business License and Tax Office and confirm the current requirements for the exact address. If the property is outside the city limits, verify requirements with Montgomery County and any applicable local authority.
Do Clarksville STR owners need a permit or business license?
Tax registration and operating permission are separate issues.
Inside Clarksville city limits, an owner may need a Short-Term Rental Unit Operating Permit before operating or advertising a covered property. Permit requirements can involve:
- Proof of ownership
- Proof of insurance
- Current property tax status
- Safety or inspection documentation
- Applicable city and county business licenses
- Permit fees
- Compliance with local hotel or motel tax rules
Some small-scale operations may qualify for an exemption under the city’s current ordinance, depending on facts such as the number of units, owner occupancy, and how many months the property operates. Do not assume that an exemption from a city permit eliminates your tax, insurance, safety, or business obligations.
Tennessee business tax is another separate question. The June 2026 Department of Revenue manual generally identifies a $100,000 gross-sales threshold per jurisdiction for business tax registration and liability. The calculation can differ depending on whether you are an individual owner, an LLC, or a property management company.
A qualified CPA can help determine how your ownership structure affects registration and filing.
What changes for stays longer than 30 days?
This is one of the most important distinctions for owners near Fort Campbell.
Local occupancy tax
For Tennessee local occupancy tax purposes, a short-term rental unit is generally rented for fewer than 30 continuous days. Local occupancy tax generally stops applying beginning on rental day 31.
However, the Department of Revenue notes that for rental agreements entered into, renewed, or amended on or after July 1, 2025, local occupancy tax collected for days 1 through 30 may not be refunded or credited simply because the guest ultimately stays longer.
Tennessee sales tax
Sales tax uses a different threshold. Lodging furnished to the same person for 90 or more continuous days is generally not subject to Tennessee sales tax.
That means:
- A 7-night stay may be subject to sales tax and local occupancy tax.
- A 35-night stay may no longer be subject to local occupancy tax after day 30, but sales tax may still apply because it is under 90 days.
- A 90-day or longer continuous stay may qualify for the sales tax exemption if the same person continuously pays for the lodging.
A reservation’s original length, extensions, cancellations, payment continuity, and guest identity can all matter. Keep clear records and ask a tax professional before treating a booking as exempt.
What records should short-term rental owners keep?
A well-organized compliance file should include:
- Platform reservation statements
- Direct-booking agreements
- Guest names and stay dates
- Nightly rental charges
- Cleaning, pet, and other required fees
- Sales tax collected
- Local occupancy tax collected
- Monthly tax returns and payment confirmations
- Permit applications and approvals
- Business license records
- Insurance documents
- Cleaning and maintenance records
- Owner-management agreements
- Guest communications regarding extensions or cancellations
Separate platform bookings from direct bookings in your accounting system. This makes it easier to identify tax collected by Airbnb or Vrbo and amounts you may need to report yourself.
Haus expert perspective for Clarksville property owners
From the property-management side, Randy Whetsell of Haus emphasizes that short-term rental performance should be evaluated on net income and compliance, not only on the highest possible nightly rate.
For a Clarksville property serving Fort Campbell families, demand may come from PCS moves, temporary lodging, military ceremonies, visiting relatives, Austin Peay events, and relocating professionals. Each guest profile can involve a different booking length and operating cost.
A professional management review should account for:
- Platform fees
- Cleaning and turnover costs
- Furnishings and replacement reserves
- Insurance
- Utilities and internet
- Permits and licenses
- Sales and occupancy taxes
- Maintenance
- Vacancy between reservations
- Management fees
- The potential value of a mid-term or long-term rental strategy
Haus’s short-term rental management guide for Clarksville explains how pricing, guest communication, turnover coordination, records, and compliance fit into a professional operating plan.
Affiliate brokers and brokers acting as designated agents for vacation lodging service firms operate under the direct supervision of the firm’s principal broker, in compliance with Tennessee Senate Bill 1786.
If you use an active residential lease or other covered lease documentation, include the true name and address of the property owner or authorized management agent in all active lease agreement documentation to comply with TCA § 66-28-302. Review the Tennessee lease disclosure requirements for additional context.
Clarksville short-term rental tax checklist
Before accepting your next reservation:
- Confirm whether the property is inside Clarksville city limits.
- Verify current STR permit requirements.
- Confirm applicable city and county business licenses.
- Register for Tennessee sales tax when required.
- Determine whether Airbnb, Vrbo, or another platform is collecting tax.
- Separate platform and direct bookings.
- Confirm local hotel, motel, or occupancy tax obligations.
- Track whether each stay is under 30 days, under 90 days, or 90 days or longer.
- Maintain tax, booking, permit, and owner records.
- Ask a qualified CPA or tax attorney to review your filing responsibilities.
Frequently asked questions
Do Clarksville Airbnb hosts owe Tennessee sales tax?
Usually, taxable lodging stays are subject to Tennessee’s 7% state sales tax plus the applicable local option tax. Airbnb may collect and remit taxes on qualifying platform bookings, but hosts remain responsible for direct bookings and recordkeeping.
Does Vrbo collect Tennessee sales tax?
A qualifying marketplace facilitator may collect and remit Tennessee sales tax. Confirm the platform’s current Tennessee tax treatment and keep statements showing what was collected.
Is local occupancy tax the same as Tennessee sales tax?
No. Local occupancy tax is separate from state and local option sales tax. Rates, filing procedures, and responsible parties can vary by location and booking method.
Is a 31-day stay tax-free in Tennessee?
Not necessarily. Local occupancy tax generally applies to the first 30 days, while Tennessee sales tax may continue to apply until the same person occupies the lodging for 90 or more continuous days.
Do I need an STR permit in Montgomery County?
Inside Clarksville city limits, a city permit may be required unless a specific exemption applies. Properties outside the city may follow different county requirements. Verify the rules for the exact property address.
Who should answer my tax questions?
Ask a qualified CPA or tax attorney. A property manager can help organize booking, revenue, and operating records, but your tax professional should advise you on registration, filing, entity structure, and exemptions.
Get a rental-rate and management evaluation
Short-term rental taxes in Tennessee can affect your actual cash flow, guest pricing, bookkeeping, and operating decisions. If you own a Clarksville or Montgomery County property near Fort Campbell, Haus can help you compare short-term, mid-term, and long-term rental strategies.
Contact Haus for a rental-rate and management evaluation and discuss a property-specific plan with an experienced local team.
This article is for general educational purposes only and is not tax, legal, accounting, insurance, or investment advice. Tennessee Department of Revenue guidance, Clarksville ordinances, Montgomery County requirements, and marketplace collection policies may change. Confirm current obligations with the appropriate government offices and a qualified CPA or tax attorney.
