Short-term rentals in Pigeon Forge, explained properly.

Section 511 makes it unlawful to operate or advertise a short-term rental unit in the R-1 District without a Short-term Rental Unit Operating Permit. Applications go to the Community Development Director or designee. The ordinance says the permit is needed within the R-1 District; it does not create a permit for other districts.

To be eligible, an owner in R-1 must have been using the property as a short-term rental (as Tennessee law defines it) on or before August 13, 2018 and must have remitted the taxes due on renting it for filing periods covering at least six months of the twelve months before that date. Section 701.10 repeats that R-1 short-term rentals are permitted only if the residence was being used that way by that date. Section 511.14 lets the City revoke a permit if the property is not used as a short-term rental for 30 months or more.

Section 702.6 lists tourist residences that meet all applicable city ordinances for housing transient residents in the R-2 district, provided the planning commission approves a site plan and sets off-street parking. Section 711.1.4 (C-6 Mixed-Use Commercial) lists hotels, motels and overnight and weekly rentals, and Section 712.1.3 (C-7 Planned Unit/Public Use Development) lists overnight lodging. The ordinance defines a tourist residence as any dwelling unit used for overnight or weekly rental to tourists. We found no wording about short-term rentals in the C-1 to C-5 or M-1 districts and make no claim about them. Check the zoning of the address with the City Planning Department.

There are three permit types. Owner Occupied is for owners who use the property as their principal residence; a person can hold only one in the City and it is only available to natural persons (the owner need not be present during rentals; residency is shown with at least two listed documents). Non-Owner Occupied is for an owner or lessee, who can be a natural person or a business entity. Unoccupied is for a non-occupant owner of premises occupied only when rented, available to natural persons and business entities, and may be held by an owner's agent such as a rental company. Where there is an accessory dwelling structure or a legal duplex, one permit covers one unit, not both.

The application fee is $300 and the renewal fee is $100; fees are not prorated or refundable. Once the application is complete the Community Development Director issues or denies the permit within 14 business days. A permit is valid for one calendar year from issuance, and the renewal fee is due at least 14 business days before expiry. The ordinance sets no separate inspection fee; it says the fee reimburses the City for processing the application and inspecting the unit.

Applications must include: an acknowledgement of the R-1 rules, business license and occupancy privilege tax requirements; an Affidavit of Life Safety Compliance; a 24-hour local contact; the owner's name and contact details (and, for a business entity, proof of good standing with the Tennessee Secretary of State); a site plan and floor plan showing bedrooms, parking spaces and the maximum number of vehicles; written acknowledgement that the applicant and owner assume all risk and indemnify the City; and a valid business license and vacation lodging services license (if applicable) with proof that taxes were remitted. We did not find the City's application form itself.

A permit cannot be transferred, and any transfer of the ownership interest in the property, voluntary or involuntary, voids the permit. A buyer would need to qualify on their own.

Each rental must have a UL 217 smoke alarm inside each sleeping room, outside and within fifteen feet of sleeping rooms and on each story (including basements), a carbon monoxide detector within 15 feet of all bedrooms, and an operational fire extinguisher. The equipment is subject to verification or inspection before the first permit is issued, at other reasonable times on reasonable notice, and after any reported safety incident.

The applicant must name a person (the owner, a lessee or the owner's agent) who is available 24 hours a day, 7 days a week to respond in person within 45 minutes of a complaint about the condition, operation or conduct of occupants and to take remedial action.

Transients may not exceed two per bedroom plus two additional transients, and the total occupancy, including anyone else living in or using the rental, may not exceed 12 persons.

It is unlawful to advertise a short-term rental without the operating permit number clearly displayed on the advertisement, in any online or offline forum.

The City's Building Department says that in areas zoned to permit overnight rentals (R-2 and higher) the drawings for buildings that are or could be used as overnight or short-term rentals must bear the seal of a Tennessee architect or engineer. Residential structures with more than 5 sleeping rooms, sleeping for more than 12 occupants, more than 5,000 square feet gross area or more than 3 stories must meet hotel/motel (R-1 occupancy) requirements for sprinklers, exits and guardrails.

The City is not responsible for deciding whether a permit or rental use is allowed under HOA rules or covenants, and has no duty to enforce them. Check your own HOA or deed restrictions.

A short-term rental unit operating or advertising without a valid permit is deemed a public safety hazard. The City may cite the operator, the owner and the local contact person, with a penalty of $50 per day per unit. Other violations of the section are also $50 a day, and violations can be treated as a public nuisance.

The City may permanently revoke a permit if the application contained knowingly false information, the rental threatens public health or safety, the owner ceases to own the property, the property is not used as a short-term rental for 30 months or more, or there have been three or more violations of generally applicable local law from operating the rental and all appeals are exhausted. A denial or revocation may be appealed by written request to the Community Development Director within 10 days; the Planning Commission hears it.

The ordinance says it does not grant vested rights to continue as a short-term rental indefinitely, and later City measures may change or end short-term rental uses, with or without a phase-out period.

Sevier County's own annual short-term rental permit and inspection program applies to units outside city limits, so it does not replace the City's rules inside Pigeon Forge.

The City levies a hotel-motel privilege tax of 2.5% of the consideration charged by the operator. The Code's definition of hotel includes any place where rooms or lodgings are furnished to transients for a consideration, and Section 511.18 says short-term rental operators are responsible for the Hotel Occupancy Privilege Tax. The operator must add the tax to the invoice and collect it from the guest. The Code defines a transient as someone staying fewer than 90 continuous days; Tennessee law limits local occupancy taxes to stays of 30 days or less (see the state law section).

Operators remit the tax to the City Recorder by the 20th of the month after collection, using the City's monthly lodging tax report. Taxes become delinquent on the 21st. Late payments carry interest of 6% a year and a penalty of one-half of one percent for each month or part of a month.

The City's business page says to get a City business license from the Finance Department ($15 application fee) and a county business license from the Sevier County Clerk ($15 application fee), and a Tennessee Department of Revenue number for the location. It also says the City's 1% gross receipts tax comes from the business owner and is not added to the customer's bill. The permit application requires a valid business license. The page does not say whether it applies to your particular rental, so confirm with the Finance Department (865-429-7309).

Sales tax on a short stay is the 7% state rate plus the local rate for the rental's location. The Tennessee Department of Revenue rate lookup for a Pigeon Forge address shows a 2.75% local rate, for 9.75% in total.

Sevier County's 3% lodging tax is for overnight rentals outside the city limits of Sevierville, Pigeon Forge, Pittman Center and Gatlinburg.

Renting a home, cabin, condominium or room for lodging is subject to Tennessee's 7% state sales tax and the local sales tax rate where the rental is located. The Tennessee Department of Revenue administers both. Sales tax is charged on the full price of the stay, including required fees such as cleaning and booking fees.

Tennessee sales tax does not apply to a room or home rented to the same person for 90 or more continuous days. Local occupancy taxes apply only to short-term rental units rented for 30 days or less and stop applying on day 31; for rental agreements made, renewed or amended on or after July 1, 2025, occupancy tax collected on days 1 to 30 is not refunded.

The Tennessee Department of Revenue says property owners and property management companies with over $100 a month in taxable sales must register with the Department and collect and remit sales tax. If you list only through an online platform that is a marketplace facilitator, the platform collects and remits sales tax on those bookings and you should keep records showing the rentals went through it. Bookings you take directly, outside a platform, are your responsibility.

Online platforms that are marketplace facilitators collect and remit Tennessee sales tax on bookings made through them. Since January 1, 2021, short-term rental platforms have also collected local occupancy taxes on their bookings and paid them to the Department of Revenue, so the owner does not collect local occupancy tax on those bookings.

Many Tennessee cities and counties charge their own occupancy tax on short-term rental stays. For bookings you take yourself (not through a platform), you collect it and pay it directly to the local government where the rental is, not to the state. The Department of Revenue advises every owner, including those who rent only through platforms, to contact the local officials, because there may be local reports or requirements.