Guide · Cost to run
What it costs to run a Memphis short-term rental.
Memphis charges $300 to apply for a short-term rental permit and $150 a year to renew, with no cap on permits and no owner-occupancy rule. The bigger numbers are the 18.75% in percentage taxes and the $1 million insurance requirement.
The short answer
Four numbers to know
| Permit | $300 application, $150 renewal Non-refundable application fee. Permits expire 365 days after issue, and renewal requests are due at least 30 days before expiration. Each unit needs its own permit. |
|---|---|
| Business licenses | $15 City and $15 Shelby County Required for businesses inside city limits, in addition to the permit. |
| Taxes | 18.75% plus $2 per room per night 7% state sales, 2.75% local sales, 4% city occupancy and 5% county occupancy, plus the $2 assessment. |
| Insurance | $1 million per occurrence Fire, hazard and liability coverage, plus a responsible party within 50 miles who answers calls 24 hours a day during stays. |
Fixed cost
What the permit costs
The columns show how many booked nights, at an example nightly rate before tax, cover each fee (examples, not forecasts).
| Item | Amount | Nights at $100 | Nights at $150 | Nights at $250 |
|---|---|---|---|---|
| Permit application | $300 | 3.0 | 2.0 | 1.2 |
| Permit renewal, each year | $150 | 1.5 | 1.0 | 0.6 |
| City of Memphis business license | $15 | 0.1 | 0.1 | 0.1 |
| Shelby County business license | $15 | 0.1 | 0.1 | 0.1 |
Source: Memphis Code Sec. 5-44-5 (Ordinance 5856), checked in October 2026. Not included: insurance premiums and the cost of meeting safety and posting requirements.
Guest-paid, but it shapes your price
The tax stack on a stay
An illustration: 3 nights at $300 for one room is a $900 rental price. The percentage taxes come to about $168.75, and the assessment adds $6.00, for $174.75 in total.
| Tax | Rate | On the $900 example |
|---|---|---|
| Tennessee state sales tax | 7.0% | $63.00 |
| Memphis local sales tax | 2.75% | $24.75 |
| City of Memphis short-term room occupancy tax | 4.0% | $36.00 |
| Shelby County room occupancy tax | 5.0% | $45.00 |
| Percentage taxes subtotal | 18.75% | $168.75 |
| Room-night assessment | $2 per room per night | $6.00 |
| Total | $174.75 |
This is a simplified illustration on the base rental price. The assessment is filed on the city's short-term room occupancy return by the 20th. Since July 1, 2025, Tennessee law makes the first 30 days of a short-term rental stay subject to local occupancy tax. Platforms with a collection agreement with the city collect and remit the occupancy and sales taxes on their bookings; otherwise you do.
What you need to do
Before your first guest
| Permit number | In every listing Apply through the Short-term Rental Registry. A permit is needed to operate or advertise, and stays over 30 continuous days are not short-term rentals. |
|---|---|
| Limits | Three sleeping rooms, 24-hour minimum The principal renter must be 18 or older. There is no permit cap and no owner-occupancy requirement. |
| If things go wrong | Suspension, then revocation The city can suspend a permit for up to 30 days if the responsible party does not respond to violations, and revokes it after three court-found violations. Chapter 5-44 sets no per-day fine. |
Full sourced rules, with evidence for each line, are on the Memphis market page. For another Tennessee market, see the Nashville cost guide.
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