Beginning this month, it will be easier for the City of Knoxville to track short-term rental hosts in neighborhoods across the city and ensure that they are operating legally. Beginning next month, it will be easier for short-term rental hosts who use the Airbnb booking service to pay their local occupancy taxes.
Both steps are part of the City’s implementation of its short-term rental ordinance, which was adopted by City Council in December and took effect at the start of 2018. The ordinance allows short-term rentals (STRs) as a legal use for owner-occupants in residential districts and for any property owner in commercial districts that allow residential use. STR operators must have a business license and an annual permit from the City.
Since January, the City has issued 36 permits for Type 1 (owner-occupied) properties, and 20 for Type 2 (non-owner-occupied) properties in non-residential districts. There were also 14 permits issued for Type 3 properties, which are non-owner-occupied properties that had been previously operating in residential areas and were granted the option of a non-renewable, one-time one-year permit. (The deadline for applying for a Type 3 permit was Feb. 1, 2018.)
A map showing all permitted STR properties is available below and at
knoxvilletn.gov/strs.
Enforcement: Host Compliance
To make it easier to enforce the STR ordinance, the City has contracted with Host Compliance, a Silicon Valley-based company that specializes in tracking and identifying STR listings. Host Compliance will provide City tax officials with regular reports of STR activity, highlighting any listings that appear to be properties operating without a City permit. That will enable City officials to send notification letters to those property owners, informing them of the ordinance and encouraging them to seek a permit. Property owners who do not comply will be subject to citation.
“Our ordinance strikes a balance between allowing short-term rentals in all residential areas and still protecting the quality of life in our neighborhoods,” said Chief Policy Officer and Deputy to the Mayor Bill Lyons. “This contract with Host Compliance is an important part of our effort to monitor STR activity and make sure it is in compliance with the law.”
Also included with the Host Compliance service is a 24-hour hotline for people to call with any complaints or concerns about STR operations. You can reach the hotline at any time of day or night by calling the City’s 311 service.
Tax Collection Agreement
The City has also signed a tax collection agreement with Airbnb, the largest online short-term rental listing platform, so that occupancy taxes will be collected and remitted directly by Airbnb. That will relieve individual hosts of the need to pay the taxes themselves. (The agreement only covers Airbnb, so hosts will still have to directly pay taxes on any bookings through other platforms.)
Laura Spanjian, Airbnb Tennessee policy director, said, “This tax agreement will deliver new revenue for Knoxville and allow our host community to easily pay their fair share. Along with our longstanding tax partnership with Memphis, we hope this agreement will serve as a model for other Tennessee municipalities looking to take full economic advantage of the sharing economy.”
The tax agreement will take effect for any Airbnb bookings within the City of Knoxville beginning on June 1. Until then, hosts remain liable for directly paying City occupancy taxes of 3 percent on all bookings.