Gatlinburg Short-Term Rental Laws (2026)
Permits, taxes, caps, and penalties for Airbnb & vacation rentals in Gatlinburg, Tennessee — from official sources, with citations. Reviewed 2026-07-02.
STRs Permitted
The Gatlinburg/Sevier County cabin market remains one of the most STR-friendly in the country â but since 2024 every cabin outside city limits needs a $250/year county permit and annual fire inspection, and city cabins need a Tourist Residency Permit.
Can you operate a short-term rental in Gatlinburg?
Short-term rentals are broadly permitted throughout Sevier County, with no license caps or primary-residence requirements. Inside Gatlinburg city limits you need the city's Tourist Residency Permit; outside city limits, Sevier County's permit-and-inspection program (effective January 1, 2024) applies. The obligations are about safety and taxes, not restricting supply.
Sevier County STR permit (outside city limits)
All short-term rental units in unincorporated Sevier County must obtain an annual permit and pass a yearly inspection, effective January 1, 2024.
§ Sevier County Resolutions 2023-06-09 and 2023-06-10 (adopted June 26, 2023)
Gatlinburg Tourist Residency Permit (inside city limits)
The City of Gatlinburg requires a Tourist Residency Permit for short-term rentals within city limits; zoning determines eligibility, so verify your parcel's zone with the city before listing.
Business tax registration
Renting property for less than 180 days (vacation lodging) is subject to Tennessee business tax; individual owners owe it once annual gross sales reach $100,000 or more in a jurisdiction, and if you use a property management company, the company owes the business tax on its overnight rental sales instead.
§ TN Dept. of Revenue â Taxation of Short-Term Rentals manual
No caps or residency rules
Neither the county program nor state law imposes a cap on the number of STR permits or requires the property to be your primary residence â this is an investor-open market.
Permits & licenses in Gatlinburg
County permits run $250/year per unit with an annual fire-safety inspection, applied for online. City of Gatlinburg properties go through the Tourist Residency Permit process instead.
- 1
Apply online (county)
Apply through communityconnect.io under "Business Owners" â one application per property address, even if you own several cabins.
- 2
Pay the permit fee
$250/year for units sleeping 12 or fewer; units sleeping 13+ pay $250 plus $25 per additional occupant. Payments are non-refundable.
- 3
Pass the fire-safety inspection
Annual inspections cover smoke alarms, CO detectors, escape routes, electrical safety, and fire safety generally. A third or subsequent inspection visit costs $25 each.
- 4
City properties: Tourist Residency Permit
Inside Gatlinburg city limits, apply for the city's Tourist Residency Permit and city/county business licenses; the city runs its own inspections (fees per city â see source).
- 5
Register for taxes
Register with the TN Department of Revenue for sales tax (and business tax if over the threshold), and set up local occupancy tax remittance with the local jurisdiction.
Fees: Sevier County: $250/year (+$25 per occupant above 12 for larger cabins; $25 for 3rd+ re-inspection). Gatlinburg city permit and business license fees apply (see city).
Short-term rental taxes in Gatlinburg
Tennessee taxes STR stays with a 7% state sales tax plus a local sales tax (1.50%-2.75% depending on jurisdiction), plus local occupancy (lodging) taxes paid to the county/city. When you book through Airbnb or Vrbo, the marketplace collects and remits the sales tax; direct bookings are on you.
| Level | Tax | Rate | Collected by | Filing |
|---|---|---|---|---|
| State | Tennessee state sales tax | 7% | Platform for marketplace bookings; Host for direct bookings | Per TN DOR schedule |
| County | Local option sales tax | 1.50%-2.75% (varies by jurisdiction) | Platform for marketplace bookings; Host for direct bookings | With sales tax return |
| County | Sevier County hotel/motel (occupancy) tax | see source | Varies | Paid directly to the local jurisdiction (via TN DOR only for marketplace bookings) |
| City | Gatlinburg city lodging tax (if in city limits) | see source | Varies | Paid to the city |
These rules change — Gatlinburg can amend them any month.
Compliance Watch monitors Gatlinburg's official sources and emails you the day permits, caps, or taxes change: what changed, old vs. new, and what to do. $49/yr per property, 100% credited toward Tenby.
Watch my TN property →Operating rules
Annual fire-safety inspection
County inspections check smoke alarms, carbon monoxide detectors, escape routes, and electrical safety every year â keep detectors current between visits.
§ Sevier County STR permit program (Fire Marshal's Office)
Sales tax on the full price
Tennessee sales tax applies to the full sales price of the rental including all charges to the guest, not just the base nightly rate.
§ TN DOR Taxation of Short-Term Rentals manual
Direct bookings shift tax duty to you
If a guest books off-platform (word of mouth, your own site), you â not the marketplace â must charge, collect, and remit sales tax and occupancy tax.
§ TN DOR Taxation of Short-Term Rentals manual
One application per cabin
Sevier County requires a separate permit application for each property address, so multi-cabin owners should batch renewals on a calendar.
§ Sevier County STR permit program
Penalties for illegal short-term rentals in Gatlinburg
Enforcement is routine rather than punitive â the county's leverage is the annual permit and inspection cycle, plus standard state tax penalties.
- ⚠Operating without the required Sevier County permit puts the unit out of compliance with the county's STR resolutions (permits are annual and inspections mandatory)
- ⚠Re-inspection fees ($25 per visit from the 3rd inspection on) apply when units repeatedly fail
- ⚠Permit payments are non-refundable
- ⚠Unregistered/unremitted sales, business, and occupancy taxes accrue state and local penalties (see TN DOR)
Official sources
- [1]Sevier County â Short-Term Rental Permit Program
- [2]City of Gatlinburg â Apply for a Tourist Residency Permit
- [3]TN Dept. of Revenue â Taxation of Short-Term Rentals (tax manual)
- [4]Sevier County permit portal (CommunityConnect)
Summarized from the official sources above as of 2026-07-02. Informational, not legal advice — always confirm requirements with the jurisdiction before acting.
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