TN HB0627

Municipal hotel occupancy tax revenue must be designated for tourism promotion and tourism development, including debt service, and cannot fund general government expenditures without approval through a memorandum of understanding with the designated destination marketing entity

Defines "tourist" as an individual traveling more than 50 miles to a destination for business or leisure, and establishes formal definitions for "tourism development" and "tourism promotion"

Municipalities must submit annual written reports to the Department of Tourist Development within 90 days of fiscal year end detailing how occupancy tax revenue was spent on tourism purposes

Hotel occupancy tax levied by municipalities is capped at 4% of the consideration charged, with cumulative taxes in incorporated county areas not to exceed 8%; taxes exceeding these limits that were levied before May 1, 2025 remain in effect

Starting July 1, 2025, occupancy taxes on short-term rentals booked through online marketplaces must be collected and remitted through the state's short-term rental marketplace tax framework