Hotel/Motel Occupancy Tax
The “5% Occupancy Program” was approved by the Metropolitan Council on May 25, 1976 (Bill No. 76-143) and was amended on August 9, 2007. As amended, this ordinance levees a 6% tax upon the privilege of occupancy and also have imposed on additional ($2.00) two dollars tax upon occupancy of each hotel room within the territory of the Metropolitan Government of Nashville. The tax so imposed is a city tax upon each occupied room for each night of occupancy. This ordinance provides the procedures for collections, enforcement, distribution, and administration of the proceeds thereof and establishing a Tourism and Convention Commission. Chapter 704 of the Public Acts of 1976, as passed by the 89th General Assembly of the State of Tennessee, authorized counties having a Metropolitan form of government to levy a privilege tax upon the occupancy in any hotel, motel, or bed and breakfast of each transient in an amount not to exceed six percent (6%) of the consideration charged by the operator.Collection Department
Davidson County Clerk's Office
523 Mainstream Drive in the Riverview Business Center II at Metro Center
Nashville, TN 37228
Hotel / Motel Tax Division
(615) 862-6254 ext. 77131
CRITERIA FOR PARTICIPATION IN THE HOTEL/MOTEL TAX PROGRAM
Any individual, firm, partnership, joint venture, association, social club, fraternal organization, joint stock company, corporation, estate, trust, business trust, receiver, trustee, syndicate, or any other group or combination acting as a unit that charges a consideration for the occupancy in a hotel valued in money whether to be received in money, goods, or labor.
HOW TO REGISTER AS A HOTEL/MOTEL PROPERTY TO PARTICIPATE IN THIS PROGRAM?
A separate license is not required for participation in this program. However, since all businesses operating in Davidson County are required to have a business license, you must register your hotel/motel at the same time that you apply for your business license. The Business Tax and the Hotel/Motel Tax Divisions, are both administered by the Davidson County Clerk's Office.
FORMS TO BE USED IN REPORTING TAX
Forms are forwarded each month to each hotel/motel property. Only the Hotel/Motel Occupancy Tax Form should be used in filing your return. Taxpayers have another option in which to pay their hotel/motel taxes. The following credit card form is to be used in making hotel/motel tax payments. (Visa and Mastercard only). You are also required to send in the hotel/motel forms with your payments. Please do not use any other form.
RECORDS KEEPING REQUIREMENTS
Records should be preserved for a period of three years at your principal place of business or at some other location convenient to the County Clerk or his representative and should be available at any reasonable time for inspection.
TAX TO BE SHOWN ON INVOICE
The tax should always be shown as a separate item on the invoice, or statement of charges rendered to the tenant.
ENFORCEMENT
The tax collection official shall have as additional powers, those powers and duties with respect to collection of taxes provided in Title 67 of the Tennessee Code Annotated or otherwise provided by law. To lend credibility to the process of collecting this tax, audits are scheduled on a random basis or where the need of an audit is clearly indicated.
INTEREST AND PENALTIES (LATE FILINGS)
A return becomes delinquent when not paid by the 20th of the month following the month for which the tax was collected. The imposition of interest and penalties in the case of a delinquent return or in the case of willful failure or refusal to report is mandatory. There is no authority for the remission of interest and penalty. More stringent penalties are also imposed for willful failure to collect and remit the tax.
DISTRIBUTION AND ADMINISTRATION OF PROCEEDS
The proceeds from the tax levied herein shall be retained by the Metropolitan Government and distributed as follows:
- One-third of the proceeds shall be used for direct promotion of tourism;
- One-third of the proceeds shall be used for tourist-related activities;
- One-sixth of the proceeds shall be used for the constructing, financing and operation of a convention center;
- One-sixth of the proceeds shall be deposited in the general fund of the Metropolitan Government.
TOURIST & CONVENTION COMMISSION
For the purpose of promoting tourism, conventions, and recreational activity, Metropolitan Council has established a Tourism & Convention Commission. This commission shall be comprised of persons nominated by the Mayor of the Metropolitan Government and voted upon by the members of the Metropolitan Council.
NEW CONVENTION CENTER TAXES
This new program, effected September 1, 2007 has established four (4) new taxes and was authorized by an Ordinance BL1557 for the purpose of paying costs incurred in modification or construction of a publicly-owned convention center. This ordinance signed into law on August 9, 2007 has authorized a 1% increase to the 5% hotel tax, added a new $2.00 city tax as a surcharge to occupied hotels rooms, imposed a 1% tax of the gross receipt of rental cars, trucks and trailers, and will tax each contractual vehicle exiting the airport with a $2.00 tax per vehicle.
- 1% ADDITIONAL HOTEL TAX
The proceeds from this tax shall be retained by the Metropolitan Government and will be used to for the purpose of paying costs incurred in modification or construction of a publicly-owned convention. - ADDITIONAL HOTEL OCCUPANCY PRIVILEGE TAX ($2.00) FOR CONVENTION CENTER
In addition to any other tax or fee imposed on the occupancy of the hotel room, there is hereby authorized an additional two dollars ($2.00) privilege tax upon the occupancy of each hotel room within the territory of the Metropolitan Government of Nashville, The tax so imposed is a privilege tax upon each occupied room for each night of occupancy and needs to be collected by each operator and remitted in to the Metropolitan Government monthly. - CONTRACTED VEHICLE TAX
A privilege tax has been imposed on all contractual vehicles, (taxi-cabs, limousines, shuttle buses, and etc). Exiting the airport while transporting customers from the airport located within the territory of the Metropolitan Government of Nashville, but shall exclude non-commercial vehicles and equipment operated by the Metropolitan Transit Authority. The privilege tax is due each time a contracted vehicle to which this section applies leaves the airport. The operator of the contracted vehicle shall be responsible for keeping accurate records to determine the amount of tax due and payable. Such information shall be transmitted daily by the operator of the contracted vehicle to a designated individual within the business organization which hired the operator of the contracted vehicle. The privilege tax shall be remitted to the Davidson County Clerk’s office by a designated individual within such business organization not later than the 20th of each month. The person owing such taxes shall be liable for interest on such delinquent taxes from the due date at the rate of 8% per annum, and in addition for a penalty of 1% for each month or fraction of a month that such taxes are delinquent. Such interest and penalty shall become a part of the tax required. Willful refusal of a person to collect or remit the tax or willful refusal of an operator of a contracted vehicle to keep accurate records of the due and payable is a Class C misdemeanor. - 1% RENTAL CAR,TRUCK,AND TRAILER TAX
This new tax has been authorized to set a 1% surcharge on all the proceeds derived from the lease or rental of any passenger motor vehicle, truck or trailer for a period of five (5) days or less; provided, that said surcharge or tax will not apply to any automobile rented as a replacement vehicle, the cost of which is covered by insurance or by a business that rents a truck or trailer for the purpose of transporting goods, or by any individual or business that rents vehicle as a replacement while the renter’s vehicle is being repaired, replaced or serviced; provided further, that the individual presents to the renter upon return of the rented vehicle a copy of the repair or service invoice or signs a statement under penalty of perjury that the lease or rental of the vehicle is used as a replacement for a vehicle that is being repaired, replaced or serviced. The surcharge or tax shall not apply to any vehicle rental transaction in which an entity whose principal business activity is the sale or service of new and used motor vehicles is the renter. This surcharge or tax shall apply to the gross proceeds from the rental agreement, excluding any sales tax imposed by Chapter 6 of the Tennessee Code Annotated. The surcharge of tax shall also be subject to the exemptions provided by T.C.A. 67-4-1906. The surcharge or tax shall not be subject to a credit provided by T.C.A. 67-4-1903 and shall be implemented consistent with existing tax policies and procedures of the Department of Revenue and of the remainder of this Chapter.
ANSWERS TO FREQUENTLY ASKED QUESTIONS
- Are there any exemptions available with this program?
The law provides for only two classes of exemptions. - A tenant who has occupied room space for thirty or more continuous days is not required to pay the tax after the thirtieth (30) day. (Residents who have already been in residency thirty days or more are exempt).
- Local, state or federal governmental agencies, are exempt from this tax when the consideration is paid by those agencies.
The law DOES NOT exempt schools, corporations, fraternal organizations, religious groups, hospitals, athletic teams of schools, universities and colleges, members of the military, ministers or representatives of foreign governments. However, hotel taxes are not collectible from the University of Tennessee or state universities and community colleges if the following criteria are satisfied:
- The room is rented in the name of the state university or college.
- The room is paid for directly by the state university or college.
However, privilege taxes are not collectible from the University of Tennessee or Board of Regents State Universities and community colleges if the room or rooms are rented in the name of the university or college and the room or rooms are paid for directly by the university or college. Both criteria must be satisfied in order for a university or college not to be subject to the tax.
The hotel tax must be collected if the university or college fails to satisfy either or both criteria. For example, if a room is rented in the name of an employee of a university or college, even if the employee is on official business, the tax must be collected. If the room is rented in the name of the university or college but the employee pays for the room or uses a credit card, the tax must be collected. (The university or college must collect the tax even if the employee who pays for the room will be reimbursed for the cost of the room. However, if the room is rented in the name of the university or college and the cost of the room is billed directly to the university or college or paid for with a university or college check or check card, the hotel tax should not be collected.
- What Is Required To Open A Bed & Breakfast?
Any person planning to operate a B&B shall make a written application for a permit on forms provided by the Metro Health Department for a fee of 50.00. You would also need to apply for a Home Occupancy Permit through the Metropolitan Government of Nashville (Codes & Zoning Department). You will also be required to obtain a Sales Tax account with the Tennessee Department of Revenue.
- Who Would I Call To Get More Information To Operate A Bed & Breakfast?
Tennessee Department of Health Division of Food and General Sanitation at 615- 741-7206
If you have questions concerning this webpage, please call the Davidson County Clerk’s Office at (615) 862-6254 ext. 77146