Tennessee § 7-4-102 - Authorization, nature and levy of tax — Convention centers.

§ 7-4-102. Authorization, nature and levy of tax — Convention centers.

There is hereby authorized a privilege tax upon the privilege of occupancy in any hotel of each transient in an amount not to exceed three percent (3%) of the consideration charged by the operator, except as provided in subsection (b). The tax so imposed is a privilege tax upon the transient occupying the room and is to be collected and distributed as provided in this chapter, and the tax shall be approved by ordinance of the metropolitan council. In addition to the tax authorized in subdivision (a)(1) and subsection (b), there is hereby authorized an additional privilege tax upon the privilege of occupancy in any hotel of each transient in an amount not to exceed one percent (1%) of the consideration charged by the operator in metropolitan counties having a population in excess of one hundred thousand (100,000), according to the 1990 federal census or any subsequent federal census. The tax so imposed is a privilege tax upon the transient occupying the room and is to be collected and distributed as provided in this chapter, and the tax shall be approved by ordinance of the metropolitan council. There is hereby authorized an additional one-percent increase to the privilege tax authorized pursuant to subsection (a) when the metropolitan government enters into a binding contract with a general contractor for the construction of a convention center, the additional one-percent increase to be used exclusively for the purpose of constructing, financing and operating a convention center. Such tax so imposed is a privilege tax upon the transient occupying the room of any hotel and shall be approved by ordinance of the metropolitan council. Such ordinance shall include provisions to reflect the intent and effect of this subsection (b). This subsection (b) only applies in counties having a metropolitan form of government that have a population of not less than four hundred thousand (400,000) and not more than five hundred thousand (500,000), according to the 1970 federal census or any subsequent federal census. The metropolitan council in a county having a metropolitan form of government which has a population in excess of five hundred thousand (500,000), according to the 2000 federal census or any subsequent federal census, is authorized to impose an additional one-percent increase to the privilege tax authorized pursuant to subdivision (b)(1). The additional one-percent increase to the privilege tax may be imposed throughout the county or only within a tourist development zone created within the county. Except as otherwise provided in subdivision (b)(3), the proceeds from the tax shall be retained by the metropolitan government and distributed in accordance with § 7-4-110(b). The tax so imposed is a privilege tax upon the transient occupying the room of a hotel located within the territory of the metropolitan government or a tourist development zone. The ordinance shall include provisions to reflect the intent and effect of this subdivision (b)(2). If there has been designated within a county described in subdivision (b)(2) a secondary tourist development zone, then all of the proceeds of the additional one-percent increase to the privilege tax authorized pursuant to subdivision (b)(2) which are derived from the secondary tourist development zone shall be deposited in the general fund of the county in which the secondary tourist development zone is located. A municipality with a population of five thousand (5,000) or more, according to the 1980 federal census or any subsequent federal census, lying partly within a county with a metropolitan form of government and partly within an adjacent county may levy a privilege tax on the privilege of occupancy in any hotel of each transient in an amount, set by the governing body of such municipality, in an amount not exceeding that set in subsection (a). The tax shall be collected and distributed as provided in this chapter. Acts 1976, ch. 704, § 2; T.C.A., § 6-3727; Acts 1982, ch. 559, §§ 1, 2, 4; 1990, ch. 636, § 3; 1999, ch. 320, § 1; 2002, ch. 571, § 1; 2007, ch. 422, §§ 1, 2; 2007, ch. 461, §§ 2, 3. Compiler's Notes. Acts 1999, ch. 320, § 3 provided that subdivision (a)(2) be repealed on June 30, 2002; however, Acts 2002, ch. 571, § 1 deleted the repeal provision in Acts 1999, ch. 320, § 3, effective April 7, 2002. For tables of population of Tennessee municipalities, and for U.S. decennial populations of Tennessee counties, see Volume 13 and its supplement. Attorney General Opinions. Sales tax is due on short-term rentals of homes, apartments, and rooms in Tennessee that are arranged through websites. These rentals qualify as “hotels” subject to a hotel occupancy privilege tax. The property owner is ultimately responsible for collecting and paying the taxes. OAG 15-78, 2015 Tenn. AG LEXIS 79 (12/1/2015). The use of proceeds of the tourist accommodation tax imposed by Moore County under T.C.A. § 7-4-102(a)(1) is limited only by Article II, Section 29, of the Tennessee Constitution, which requires that the proceeds be used for purposes of the county. OAG 16-02, 2016 Tenn. AG LEXIS 2 (1/12/2016).