Knoxville Short-Term Rental Regulations

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Permit & Licensing

Type 1 operating permit (owner-occupied, residential districts)

The property must be your primary residence. This means investment properties are not eligible for this permit type.

Type 2 operating permit (non-owner-occupied, nonresidential districts)

This permit type does not require primary residence. Zoning restriction: Allowed in nonresidential districts only.

Application Process

Submit an application to the Business License & Tax Office including a life-safety affidavit, site/floor plan, and local contact person; the office issues or denies within 14 business days. Type 1 applicants must mail neighborhood notice to adjacent property owners within 48 hours of applying.

Note: Document requirements vary by permit type. See individual permit sections above for eligibility details.

Tax Obligations

Combined rate: 13.25% of gross rental income.

Collection: State sales tax is collected and remitted by the property owner, property management company, or marketplace facilitator; the city hotel occupancy privilege tax is remitted by the operator.

Rental Limits

Knoxville does not impose an annual cap on the number of nights you can rent.

Occupancy & Density Limits

2 transients per bedroom plus 2 additional, not to exceed 12 persons total

Zoning & Restrictions

Type 1 (owner-occupied) permitted in residential districts; Type 2 (non-owner-occupied) permitted in nonresidential districts (e.g., TC-1, C-2, Cumberland Avenue Corridor). New non-owner-occupied STRs are not allowed in residential zones.

Insurance & Safety

Insurance

Knoxville does not require short-term rental operators to carry specific insurance. Standard homeowner policies often exclude short-term rental activity, so many hosts obtain dedicated short-term rental or landlord liability coverage.

Safety & Operating Requirements

• Smoke alarm meeting UL 217 standards inside each sleeping room, within 15 feet of sleeping rooms, and on each story including basements
• Carbon monoxide detector within 15 feet of all bedrooms
• Fire extinguisher (operational)

Penalties for Non-Compliance

Operating or advertising without a permit is a public safety hazard subject to a civil citation of $50.00 per day; any violation of the article is a public nuisance subject to a civil citation of $50.00 per day; permits may be revoked and a 6-month wait applies before reapplying.

Platform Requirements

• Advertisements in any forum must clearly display the operating permit number
• Marketplace facilitators (e.g., Airbnb/VRBO) must collect and remit state sales tax.

Compliance Checklist

Follow these steps to legally operate a short-term rental in Knoxville:

1. Determine your permit type. Knoxville has 2 permit types. Identify which applies to your property (Type 1 operating permit (owner-occupied, residential districts), Type 2 operating permit (non-owner-occupied, nonresidential districts)).
2. Meet safety requirements. Smoke alarm meeting UL 217 standards inside each sleeping room, within 15 feet of sleeping rooms, and on each story including basements. Carbon monoxide detector within 15 feet of all bedrooms. Fire extinguisher (operational).
3. Apply for your STR permit. Submit application. Fees vary by type: Type 1 operating permit (owner-occupied, residential districts) $70; Type 2 operating permit (non-owner-occupied, nonresidential districts) $120. See permit types above to determine which applies.
4. Register for tax accounts. Set up lodging tax accounts with Tennessee Department of Revenue.
5. Display your permit number. Include your permit/license number in all listings and advertisements.
6. Collect and remit taxes. 13.25% on all bookings.
7. Renew annually. $50 renewal fee.

Frequently Asked Questions

Do you need a permit to run an Airbnb in Knoxville?

Yes. Knoxville requires a short-term rental permit to operate an Airbnb or Vrbo, and there are 2 permit types — one requires the property to be your primary residence, and another allows non-owner-occupied (investment) use. See the permit types above to find which applies to your property.

Are there major restrictions on short-term rentals in Knoxville?

Yes — New non-owner-occupied STRs are not allowed in residential zones. Review the full rules above before listing.

How much does a short-term rental permit cost in Knoxville?

Permit costs in Knoxville vary by type: owner-occupied $70; non-owner-occupied $120.

Does Knoxville require a short-term rental to be your primary residence?

It depends on the permit type. At least one Knoxville permit requires the property to be your primary residence, while another allows non-owner-occupied (investment) use — see the permit types above.

How many days a year can you short-term rent in Knoxville?

Knoxville does not cap the number of nights per year you can short-term rent, though permitting, zoning, and occupancy rules still apply.

What taxes do you pay on a short-term rental in Knoxville?

Short-term rental stays in Knoxville are subject to a combined 13.25% in lodging taxes. This combines 7% Tennessee State Sales Tax + 2.25% Knox County Local Option Sales Tax + 4% City of Knoxville Hotel Occupancy Tax. The host is responsible for collecting and remitting them.

What happens if you run a short-term rental without a permit in Knoxville?

Operating without a permit can cost up to $50.00 per day.