Memphis, TN Rental Regulations Guide 2025

7 Step Guide to Memphis Short-Term Rental Regulations

1. City Overview: Short-Term Rental Landscape

Memphis, Tennessee, regulates short-term rentals (STRs) under a structured permitting process to ensure compliance with zoning, licensing, and tax requirements. STR operators must obtain a Short-Term Rental Permit, adhere to safety regulations, and register for tax collection.

For the most up-to-date short-term rental data, including occupancy rates, average daily rates, and revenue trends, visit the Chalet Market Dashboard.

2. Quick Facts

  • Permit Required? Yes, all STRs must obtain a Short-Term Rental Permit.
  • Zoning Restrictions? STRs must comply with zoning laws and occupancy limits.
  • Maximum Occupancy: Two people per bedroom, plus two additional guests.
  • Tax Requirements: STR operators must collect and remit city, county, and state lodging taxes.
  • Renewal Frequency: Annual renewal required for STR permits.
  • Registration Fees:
    • Short-Term Rental Permit Fee: $300 (one-time application fee)
    • Annual Permit Renewal Fee: $150
  • Insurance Required? Minimum liability coverage of $1,000,000 required.
  • Enforcement Level: Active enforcement, with penalties for non-compliance.

3. Getting Started with STRs in Memphis (Step-by-Step Guide)

Step 1: Verify Zoning Compliance

Before applying for an STR permit, property owners must confirm their rental is in an eligible zoning district.

Step 2: Obtain a Short-Term Rental Permit

All STR operators must obtain a Short-Term Rental Permit before listing their property.

  • Permit Fees:
    • Initial Application Fee: $300
    • Annual Renewal Fee: $150
  • Required Documents:
    • Proof of property ownership
    • Floor plan indicating guest areas
    • Proof of liability insurance ($1,000,000 minimum)
    • Local contact person for complaint resolution
    • Fire safety compliance documents

Where to Apply:

Step 3: Register for Tax Collection & Payment

STR hosts must collect and remit applicable local and state lodging taxes.

  • Tax Registration Required With:
    • Shelby County Trustee’s Office
    • Tennessee Department of Revenue
  • Tax Rates:
    • Tennessee State Sales Tax: 7%
    • Shelby County Lodging Tax: 5%
    • Total Lodging Tax Rate: 12%
  • Filing and Payment Deadlines:
    • Taxes must be reported and paid monthly.
    • Payments are due by the 20th of each month for the previous month’s rentals.

Where to Register and Pay Taxes:

Failure to collect, report, and remit taxes can result in fines and penalties. Hosts are encouraged to maintain accurate records and consult a tax professional if needed.

4. Regulatory Breakdown

Frequently Asked Questions provide detailed answers to the most common regulatory questions.

Example Questions:

  • Do I need a permit to operate an STR in Memphis?
    • Yes, all STR operators must obtain a Short-Term Rental Permit before listing their property.
  • What are the tax obligations for STR operators?
    • STRs are subject to local and state lodging taxes.
  • Are there zoning restrictions for STRs?
    • Yes, STRs must be located in permitted zoning districts and comply with city regulations.

Additional Resources:

5. Key Considerations for Investors

  • Investment Potential: Memphis has a growing STR market with structured permitting requirements.
  • Regulatory Trends: The city enforces zoning laws and licensing requirements to regulate STRs.
  • Community Compliance: STR operators should verify neighborhood-specific rules and remain updated on legislative changes.
  • More Information: Contact Memphis Planning Department at (901) 576-6619 or visit the Chalet Market Dashboard.

6. Taxes and Financial Obligations

STR operators must comply with state and local tax laws by registering, collecting, and remitting lodging taxes to the appropriate agencies. Non-compliance may result in penalties, interest, and potential suspension of the STR permit.

Tax Breakdown:

  • Tennessee State Sales Tax: 7%
  • Shelby County Lodging Tax: 5%
  • Total Lodging Tax Rate: 12%

Who Must Register for Tax Collection?

  • All STR operators must register with both the Shelby County Trustee’s Office and the Tennessee Department of Revenue.
  • STR platforms like Airbnb and VRBO may collect and remit taxes on behalf of hosts, but operators should verify compliance directly with tax authorities.

Filing and Payment Deadlines:

  • Taxes must be reported and paid monthly.
  • Payments are due by the 20th of each month for the previous month’s rentals.
  • Late payments may result in penalties and interest charges.

How to Register and Pay Taxes:

  • Shelby County Trustee’s Office:
  • Tennessee Department of Revenue:
    • Website: Tennessee Tax
    • Phone: (615) 253-0600
    • Filing Portal: STR businesses must register for tax remittance through the Tennessee Taxpayer Access Point (TNTAP).

Penalties for Non-Compliance:

  • STR operators who fail to collect or remit taxes may face:
    • Fines and penalties for underpayment or non-payment.
    • Interest charges on overdue tax amounts.
    • Potential suspension of the STR permit or legal enforcement by local authorities.

To ensure compliance, STR operators should maintain detailed financial records and consult with a tax professional if needed. STR operators must register and remit taxes at both the local and state levels.

  • Local Realtor Partnerships:
    Looking to invest in short-term rental properties? Chalet’s nationwide network of specialized realtors is here to guide you. Our experts understand the nuances of vacation rentals and local markets, helping you identify high-ROI properties and navigate complex regulations with ease. Best of all, their services come at no extra cost to you. Click here to connect for free.
  • Chalet’s Regulation Updates:
    Chalet email subscribers receive updates regarding regulatory changes in cities. Subscribe here!
  • Connect with Local Experts:
    At Chalet, our goal is to enable everyone to create wealth with short-term rentals. We bring the experience and expertise to optimize your rental property. Connect with a STR professional in your area here.

Recommended Tools and Resources

  1. Chalet STR Market Insights Tool
    Chalet offers a free market analytics tool that allows investors to explore detailed data on occupancy rates, average daily rates, revenue estimates, and market trends for specific cities. This tool helps investors make informed decisions based on comprehensive insights. Access the STR Market Insights Tool.
  2. Airbnb Income Guide
    Investors can dive into this guide to better understand how to maximize income from STRs. It covers critical aspects such as dynamic pricing, guest management, and how to boost profitability through effective listing strategies. Read the Comprehensive Guide to Airbnb Income.
  3. Chalet Investor Guides
    These investor guides provide city-specific insights, including tax obligations, regulations, investment potential, and detailed market data. Investors can select from over 200 city guides to find data tailored to their target market. Explore Investor Guides.
  4. AI-Powered Market Comparison Dashboard
    Chalet’s market comparison dashboard offers a powerful tool for comparing different STR markets based on yield, occupancy rates, and other key performance indicators. This tool is particularly useful for investors looking to diversify across different regions. Check out the Market Dashboard.
  5. Chalet STR Calculator
    The free Chalet STR Calculator is a powerful tool designed to help short-term rental investors evaluate potential property performance with ease. It enables users to estimate revenue, analyze expenses, and project profitability for any STR market, streamlining investment decisions. Whether you’re comparing properties or exploring new opportunities, the Chalet STR Calculator simplifies the process with precision. Learn more about the Chalet STR Calculator.

DISCLAIMER: The information provided in these guides is for entertainment and general informational purposes only. It may not reflect the most up-to-date regulations, and Chalet is not responsible for any inaccuracies or changes to the information on third-party sites. These guides are not legal advice. We highly recommend verifying details directly with local authorities and consulting professionals before making any investment decisions. Ultimately, it is your responsibility as an investor to ensure compliance with local laws.

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