Tax Burden Increased for Small Businesses in Sevier County 'Sharing' Industry

Date: January 05, 2016 Last Edit: January 07, 2016

Vacation rentals—such as those offered through AirBNB or Vacation Rental by Owner—are subject to state sales and hospitality taxes, according to an opinion issued last month by Tennessee Attorney General Herbert Slatery.

Vacation rentals—such as those offered through AirBNB or Vacation Rental by Owner—are subject to state sales and hospitality taxes, according to an opinion issued last month by Tennessee Attorney General Herbert Slatery.

The opinion was asked for by Representative Dale Carr at the behest of the Tennessee Hospitality and Tourism Association. Hoteliers have been in favor of a level playing field, and some counties—such as Davidson County—have already been collecting taxes on these types of “sharing” rentals for a year.

In Sevier County, there are thousands of rental properties, many of which are part of commercial complexes, and Slatery’s opinion stated all overnight rentals are essentially commercial properties.

Commercial property is taxed at 40 percent of the assessed value (while cabins are taxed at 25 percent of assessed value and treated as second homes).


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