Shown verbatim: the complete text as captured from the official PDF posted by the Tennessee General Assembly, fetched 2026-09-25. Page and line markers are part of the official record; nothing is edited or removed. This is the chaptered version. The official bill page.
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PUBLIC CHAPTER NO. 372
SENATE BILL NO. 629
By Briggs, Bowling
Substituted for: House Bill No. 627
By Crawford
AN ACT to amend Tennessee Code Annotated, Title 7 and Title 67, relative to occupancy tax.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Section 67-4-1401(11), is amended by deleting the
subdivision and substituting:
(11) "Tourism development" means the creation or expansion of physical attractions,
facilities, or events that are available and open to the public, improving the appeal of
destinations to tourists, and enhancing tourist experiences that are primarily promoted to or
used by tourists;
SECTION 2. Tennessee Code Annotated, Section 67-4-1401, is amended by adding the
following new subdivisions:
( ) "Tourism promotion" means planning, conducting, or participating in programs of
information, publicity, and advertising that are designed to attract tourists and foster economic
activity through tourism;
( ) "Tourist" means an individual who travels more than fifty (50) miles to a destination
for business or leisure;
SECTION 3. Tennessee Code Annotated, Section 67-4-1403, is amended by deleting the
section and substituting:
(a) Except as otherwise provided in subsection (b):
(1) The revenue received by a municipality from the tax must be designated and
used for tourism promotion and tourism development, including debt service and
contractual obligations incurred in furtherance of such purposes; and
(2) Tourism development investments authorized under this part must not be
used to fund general government expenditures or activity unless designated and
approved through a memorandum of understanding between a municipality's
governing body and the designated destination marketing entity.
(b) Subject to§ 67-4-1414, a municip-ality levying a tax upon the privilege of occupancy
before May 1, 2025, may continue to use the revenue in the manner prescribed in the private
act, resolution, or ordinance levying the tax.
(c)(1) Not later than ninety (90) days after the end ofa municipality's fiscal year, each
municipality that levies a tax upon the privilege of occupancy, whether pursuant to this
part or by private act, ordinance, or resolution, shall provide an annual written report to
the commissioner of the department of tourist development.
(2) The annual written report must detail the amount of revenue spent by the
municipality, and its subordinate contractors, and how those expenditures have been
designated and used for tourism promotion and tourism development pursuant to this
part.
SB629
(d) If an audit by the comptroller of the treasury or by contractors employed by a
municipality with the approval of the comptroller, finds that a municipality has spent funds
derived from a tax levied pursuant to this part for purposes not related to tourism promotion
and tourism development as required by subsection (a), the municipality shall, using general
funds, appropriate an amount equal to the amount spent improperly to be used to support
tourism promotion and tourism development for the next subsequent fiscal year.
SECTION 4. Tennessee Code Annotated, Section 67-4-1413, is amended by deleting the
section and substituting:
Notwithstanding § 67-4-1414 or another law to the contrary:
(1) Except as provided in subdivision (2), on or after July 1, 2025, tax levied
upon the privilege of occupancy of a short-term rental unit secured through a short-
term rental unit marketplace, pursuant to any private act, must be collected and
remitted in accordance with title 67, chapter 4, part 15; and
(2) A municipality may adopt an ordinance or resolution requiring funds
received from the department of revenue under § 67-4-1506 that were collected from
the tax levied upon the privilege of occupancy of a short-term rental unit secured
through a short-term rental unit marketplace to be used in accordance with § 67-4-
1403(a).
SECTION 5. Tennessee Code Annotated, Section 67-4-1402(a), is amended by deleting
subdivisions (2) and (3) and substituting:
(2) Except as otherwise provided in subdivision (a)(3), the tax levied by a municipality
upon the privilege of occupancy in a hotel must not exceed four percent (4%) of the
consideration charged to a transient by the hotel operator; provided, that, on or after the
effective date of this act, a municipality shall not increase the tax in an amount such that the
cumulative tax in an incorporated area of a county exceeds eight percent (8%).
(3) Subject to§ 67-4-1414, a tax upon the privilege of occupancy in a hotel levied or
authorized before May 1, 2025, by a municipality that exceeds the tax limit established in
subdivision (a)(2) remains in full force and effect.
SECTION 6. This act takes effect upon becoming a law, the public welfare requiring it.
2
SENATE BILL NO. 629
PASSED: April 16, 2025
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\ RAND\- McNALLY
SPEAKER OF THE SENATE
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CAMERONSe,rfON,SPEAKER
HOUSE OF REPRESENTATIVES
~ APPROVED this £2-tQ.. day of 2025
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