Tennessee House Bill HB0405

Tennessee 2025-2026 Regular Session

• Introduced: 1/28/25
• Refer: 2/5/25
• Refer: 3/19/25
• Refer: 4/9/25
• Chaptered: 6/4/25
• Passed: 6/4/25

Caption

AN ACT to amend Tennessee Code Annotated, Title 67, Chapter 4, Part 14, relative to taxation.

Summary

HB0405 amends Tennessee’s hotel occupancy tax law to change how the tax is handled when a guest stays in a hotel for an extended period. Under current law, the bill provides that once a person has maintained occupancy for 30 continuous days, the hotel operator must remit the tax already collected for that period to the municipality and then stop collecting the tax from that person for the rest of the stay. The measure applies to rental agreements entered into, renewed, or amended on or after July 1, 2025. The bill is a targeted taxation and local-government measure affecting hotel operators, long-term guests, and municipalities that receive local hotel occupancy tax revenue. It amends Tennessee Code Annotated, Title 67, Chapter 4, Part 14, which governs local privilege taxes on hotel occupancy, by clarifying the tax treatment of extended stays and reducing ongoing tax collection after the 30-day threshold is reached.

Impact

The bill changes the administration of Tennessee’s local hotel occupancy tax by requiring operators to remit tax for the first 30 continuous days of occupancy and then discontinue collecting the tax from that guest for the remainder of the stay. This affects hotel and motel operators’ billing practices, long-term lodging arrangements, and municipal tax receipts tied to transient occupancy. The amendment applies prospectively to agreements entered into, renewed, or amended on or after July 1, 2025.

Sentiment

The available voting history suggests generally favorable support for the bill, with strong committee majorities advancing it at each stage. The House Cities & Counties Subcommittee recommended passage with amendment by a 6-1 vote, and the House State & Local Government Committee recommended passage with amendment by an 18-1 vote. No committee transcript is available, but the lopsided votes indicate broad agreement on the bill’s approach, with only limited opposition.

Contention

The main point of contention appears to be the policy choice of when a hotel stay should stop being treated as taxable transient occupancy and how that affects municipal revenue. Supporters likely viewed the bill as a clarification or fairness measure for extended-stay guests and operators, while the lone dissenting votes suggest concern about reduced tax collections or the administrative implications for local governments. Because no transcripts are available, the specific objections are not stated, but the issue centers on taxation of long-term hotel stays and the balance between local revenue and tax relief.