How to Start an Airbnb Business in Smoky Mountains – An Introduction

Having a short-term rental business in the Smoky Mountains is an exciting venture. Before you can start renting out your property, you’ll need to make sure to follow the appropriate steps for the necessary business licensing and required permits. In the Smoky Mountains, this process varies depending on where your property is. Gatlinburg, Pigeon Forge, and Sevierville may all be in the same county (Sevier County), but they each have their own requirements for setting up an airbnb business. Sevierville also has an additional requirement if you live within the city limits. This may sound daunting but with the right resources, you will have the confidence to set up your short-term rental and move on to the fun part – cabin set up!

Verify Your Short-Term Rental Location and Zoning

Gatlinburg, Pigeon Forge, and Sevierville all require that you start by verifying your property location and that using your property as a short-term rental is allowed. This is where the additional Sevierville step comes in. If you are located in the Medium Density Residential (MDR) zoning district, the City will send a notification to all properties within 100’ of the proposed short-term rental to determine whether there are any objections to the property being used as a STR. If there are objections, a public hearing is held and a final determination is made by the Planning Commission. Verifying that your property can be used as a STR is a critical first step for anyone purchasing a STR property.

Short-Term Rental Licensing Set-Up

Short-Term Rental Licensing Set-Up

Once you determine that your property can be used as a STR, you can move on to filing for your necessary permits and licenses. Every property must have a City and County Business License as well as a Tennessee Department of Revenue Tax ID. Gatlinburg requires a Tourist Residency Permit and Sevierville requires a Short Term Rental Permit. All properties require an inspection by the Fire Department. In Gatlinburg the Tourist Residency Permit triggers the fire inspection, in Pigeon Forge the City Business License triggers the fire inspection, and in Sevierville, the Certificate of Occupancy triggers the fire inspection. 


Short-Term Rental Taxes

Once you have all of your permits and licenses in place, you will have to determine what taxes you will need to pay and how they will be paid; specifically your Gross Receipts Tax and Hotel/Motel Tax (also known as hospitality or lodging tax). If you are renting your property exclusively through Airbnb and VRBO, you may not have to pay the Hotel/Motel tax as those online marketplaces collect those taxes and pay them on your behalf. Avalara is a popular tax compliance software that helps business owners to manage their tax payment requirements. 

Determining what permits and licenses are needed based on where your property is located is one of the more time consuming parts of the process. Your friends at Black Sheep Realty and The Best BnB Host have created a resource to help you navigate the process and save you time. 



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