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HB 405

Taxes, Hotel Motel - As enacted, requires a hotel operator to remit the hotel tax to the municipality when a person has maintained occupancy for 30 continuous days and to cease collecting the tax from the person for the remainder of their stay in the operator's hotel. - Amends TCA Title 67, Chapter 4, Part 14.

114th Regular Session (2025-2026) Introduced by Tom Leatherwood

Tennessee law exempts hotel guests from paying taxes after 30 continuous days of occupancy, reducing municipal tax revenue from long-term stays.

Comp. became Pub. Ch. 364
#hotelmotel #taxes
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WeVote Research Nonpartisan
Bill Summary · HB 405

Legislative bill overview

HB 405 modifies Tennessee's hotel tax collection rules by exempting guests from paying hotel taxes after they have maintained continuous occupancy for 30 days or more. Hotel operators are required to remit taxes to municipalities only for the first 30 days of a guest's stay, then cease tax collection for that guest's remainder of their stay.

Why is this important

This law effectively creates a tax break for long-term hotel occupants, potentially reducing revenue for municipalities that depend on hotel taxes for tourism infrastructure and services. It also creates a distinction between short-term and long-term hotel stays, which may impact how cities classify and regulate residential versus transient lodging.

Potential points of contention

  • Municipal revenue impact: Cities lose significant hotel tax revenue from extended-stay guests, who may represent a meaningful portion of occupancy in some markets
  • Definitional ambiguity: "Continuous occupancy" may be difficult to enforce—unclear whether brief absences reset the 30-day counter or how operators verify continuous stays
  • Equity concerns: The exemption may disproportionately benefit corporate travelers and those on extended assignments while reducing public funding for services benefiting all visitors

Compiled from official sources — confirm details with the bill’s official record.

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