LicensedRental

Blount County, Tennessee

Townsend, TN vacation rental requirements

Townsend adopted short-term rental permits in May 2026: $250 a year with an annual inspection, a local contact who responds within 45 minutes, up to 12 guests, and one parking space per bedroom. Short-term rentals are prohibited in the R-1E zone. A 3% city occupancy tax took effect May 1, 2026, so tax is 17.75%.

Checked against official sources November 5, 2026

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City permit
$250 a year
Annual renewal and inspection. Owners had 60 days from the May 2026 adoption to apply.Source
Zoning
Not allowed in R-1E
Allowed in B-1 Tourist Business; the city was considering banning new rentals in all residential zones.Source
Maximum guests
12
Larger rentals are treated as commercial lodging.Source
Taxes
17.75%
9.75% sales + 3% city (from May 1, 2026) + 5% county occupancy tax.Source

We built this page from news coverage of the May 2026 ordinances; the city’s short-term rental page didn’t load for us. Confirm the rules with City Hall.

Rentals operating legally before the ordinance are protected by the state’s 2018 Short-Term Rental Unit Act, but the city still requires the permit.

Your licensing checklist

In order: the state, the county, then the town.

State of Tennessee

  1. Register for sales tax

    Register through the Tennessee Taxpayer Access Point (TNTAP). One registration covers all your rentals in the same city or county. If you take direct bookings, collect 7% plus the local rate and file by the 20th of each month. Once registered, file every month, even a $0 return.Source

    TNTAP →

  2. Get a business tax license

    Rentals under 180 days owe business tax. With $3,000 to $100,000 a year in gross receipts in a city or county you need a minimal activity license; at $100,000 or more, a standard license. Booking platforms don’t handle this for you.Source

  3. Know what the platform collects

    Airbnb, VRBO, and other marketplaces collect and remit sales tax and local occupancy tax on their bookings. Keep records showing they did. For direct bookings, you pay sales tax to the state and occupancy tax to the city or county.Source

  4. Then your county and city

    Permits, zoning, and occupancy tax rates are where Tennessee towns differ most. Pick your area.

Blount County, Tennessee

  1. Then your city or area

    Pick your area.

City of Townsend

  1. Apply for the short-term rental permit

    Contact City Hall for the application. You need smoke and carbon monoxide detectors, fire extinguishers, evacuation plan signs, and safe chimneys and fireboxes, and a contact available 24/7 who can respond within 45 minutes.Source

  2. Register for sales and occupancy tax

    Tax on stays here is 9.75% sales tax plus 3% city and 5% county occupancy tax. Airbnb and VRBO collect both on their bookings. For direct bookings, file sales tax with the state through TNTAP by the 20th of each month. Ask City Hall where to file the new city tax on direct bookings, and the Blount County Clerk about the county tax.Source

House rules for guests

Parking
1 off-street space per bedroom
Source

Sources

A plain-language summary to help you prepare, not legal advice. Rules and fees change; confirm with the office before you apply. Spot something out of date? Email hello@licensedrental.com.