Sevierville Short Term Rental Regulations: A Complete Guide For Airbnb Hosts (2025)

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Disclaimer: This article is for informational purposes only and not legal advice. Regulations may have changed since publication. Always check with local authorities and consult a legal professional before making investment decisions.

Introduction to Short-Term Rentals in Sevierville

Nestled in the foothills of the Great Smoky Mountains National Park, Sevierville, Tennessee, has emerged as one of the hottest markets for short-term rental (STR) investors. With its proximity to Dollywood, countless outdoor adventures, and year-round tourism, it’s no wonder why savvy real estate investors are flocking to this mountain gem.

But before you jump into purchasing that cabin with breathtaking mountain views, you need to understand the local regulations that govern short-term rentals in Sevierville. Unlike some destinations that have cracked down on Airbnb-style rentals, Sevierville has created a framework that allows STRs to thrive while maintaining community standards.

This guide breaks down everything you need to know about operating a legal and profitable short-term rental in Sevierville in 2025, from permit requirements to taxes and beyond.

Current Short-Term Rental Permit Requirements in Sevierville

Sevierville requires a permit for all short-term rental properties operating within city limits. Here’s what you need to know:

Permit Application Process

1. City Business License: All short-term rental operators must obtain a business license from the City of Sevierville. You can apply through the City Recorder’s Office at City Hall or online through the official city website.
2. Short-Term Rental Permit: In addition to the business license, you must apply for and receive a specific STR permit. This permit must be renewed annually.
3. Application Fee: The initial application fee is $150, with an annual renewal fee of $50 (fees subject to change).
4. Property Inspection: Before approval, your property must pass a safety inspection conducted by the city.
5. Owner Information: You must provide proof of ownership and current contact information.
6. Insurance Requirement: Proof of liability insurance with minimum coverage of $1,000,000 is required.

It’s important to note that permits are non-transferable, meaning if you sell your property, the new owner must apply for a new permit.

Zoning Regulations for STRs in Sevierville

Sevierville has specific zoning requirements that determine where short-term rentals can operate:

Permitted Zones

Short-term rentals are generally permitted in:

• Tourist Commercial (TC) zones
• Intermediate Commercial (IC) zones
• Highway Commercial (HC) zones
• Certain Residential zones (with additional restrictions)

Restricted Areas

STRs face more restrictions in:

• R-1 Low Density Residential zones
• Historic districts
• Certain neighborhoods with specific HOA restrictions

Many of the most profitable STR properties in Sevierville are actually located in unincorporated Sevier County areas just outside city limits, where regulations can differ. Always verify the exact zoning of a property before purchasing for STR use.

HOA and Covenant Restrictions

Even if city zoning allows for STRs in your area, private HOA regulations or deed restrictions may prohibit them. Always check both:

• Local government zoning laws
• Private HOA/covenant restrictions
• Deed restrictions

Required Documentation for Sevierville Short-Term Rentals

To legally operate your STR in Sevierville, you’ll need to maintain these documents:

1. City Business License: Must be displayed in your rental property
2. Short-Term Rental Permit: Keep both physical and digital copies
3. Tennessee Sales Tax Certificate: Required for tax collection
4. Sevier County Business License: For properties in county jurisdiction
5. Liability Insurance Policy: Minimum $1,000,000 coverage
6. Property Safety Compliance Records: Documentation of fire safety features, etc.
7. Local Contact Information: A designated local contact who can respond to issues within one hour

Pro investors make sure all documentation is organized and easily accessible in case of inspection or audit.

Sevierville Short-Term Rental Taxes

Understanding and properly collecting/remitting taxes is crucial for STR operators in Sevierville:

Local Taxes

• City of Sevierville Lodging Tax: 2.5% of gross rental receipts
• Sevier County Lodging Tax: 3% of gross rental receipts

State Taxes

• Tennessee Sales Tax: 7% of gross rental receipts
• Local Option Sales Tax: 2.75% of gross rental receipts

Collection Methods

While platforms like Airbnb and VRBO collect and remit some taxes automatically, they don’t collect all required taxes in Sevierville. You are responsible for ensuring all taxes are properly paid. Many investors use specialized STR accounting software or hire local property managers familiar with tax requirements.

Tax Reporting Deadlines

• Monthly filing is typically required
• Reports and payments are due by the 20th of the following month
• Late payments incur penalties and interest

Proper tax compliance is one area where many new STR investors make costly mistakes. Consider consulting with a local tax professional familiar with Sevierville STR regulations.

Safety Requirements and Inspections

Sevierville takes guest safety seriously and requires STR properties to meet these standards:

Required Safety Equipment

• Working smoke detectors in each bedroom and on each level
• Carbon monoxide detectors (if property has gas appliances or fireplace)
• Fire extinguishers on each level
• Clearly marked exits
• Pool safety features (if applicable)

Inspection Process

Initial inspection is required before permit issuance, with potential random compliance checks. Failing an inspection can result in permit suspension until issues are resolved.

Building Code Compliance

All STR properties must comply with current building codes, which may require updates to older properties.

Sevierville vs. Surrounding Areas: Regulation Comparison

How do Sevierville’s regulations compare to neighboring tourist destinations?

Gatlinburg

• Generally stricter regulations
• Higher permit fees
• More limited zones where STRs are allowed

Pigeon Forge

• Similar permit requirements
• Slightly lower tax rates
• Comparable zoning restrictions

Unincorporated Sevier County

• Often fewer restrictions
• Lower fee structure
• Less stringent inspection requirements
• Popular for larger cabin developments

Many investors find the best value in areas just outside Sevierville city limits, where regulations are sometimes more favorable while still offering excellent proximity to attractions.

Enforcement of STR Rules in Sevierville

Understanding enforcement helps you assess risk:

Compliance Monitoring

Sevierville uses both:

• Complaint-based enforcement
• Periodic audits of online listings
• Random property inspections

Common Violations

The most frequent violations include:

• Operating without a permit
• Tax collection failures
• Occupancy limit violations
• Noise/nuisance complaints
• Safety code non-compliance

Penalties

Violations can result in:

• Fines starting at $50 per day of violation
• Permit suspension or revocation
• Business license revocation
• Inability to obtain permits for other properties

Enforcement has become more rigorous in recent years as the STR market has grown, with the city actively monitoring platforms like Airbnb and VRBO for unpermitted rentals.

How to Start a Short-Term Rental Business in Sevierville

Ready to launch your STR in Sevierville? Follow this roadmap:

Step 1: Market Research & Property Selection

• Analyze different neighborhoods/areas
• Consider seasonal demand patterns
• Evaluate potential ROI

Step 2: Zoning & Regulation Check

• Verify property is in a permitted zone
• Check for HOA/covenant restrictions
• Research specific local regulations

Step 3: Acquisition & Setup

• Purchase property or secure owner authorization
• Renovate/furnish with guests in mind
• Install required safety equipment

Step 4: Permitting & Licensing

• Apply for business license
• Obtain STR permit
• Register for tax accounts
• Schedule required inspections

Step 5: Operations Setup

• Create listing on platforms
• Set up tax collection system
• Establish cleaning/maintenance protocols
• Develop house rules and guest communications

Step 6: Ongoing Compliance

• Maintain all required documentation
• File taxes timely
• Renew permits annually
• Stay updated on regulation changes

Advice from Successful Sevierville STR Operators

We reached out to experienced Sevierville STR owners for their insights:

“Understanding the seasonal nature of Sevierville tourism is crucial. We generate 60% of our annual revenue during summer and October leaf season.” – Mark S., 5-year STR operator

“Work with local property managers who understand the regulations. They’re worth their weight in gold for navigating compliance issues.” – Jennifer L., owner of 3 Sevierville cabins

“Don’t skimp on amenities. Hot tubs, game rooms, and mountain views command premium rates and higher occupancy.” – David R., STR investor

The consensus among successful operators is that Sevierville rewards investors who maintain legal compliance and focus on quality guest experiences.

Who to Contact About Sevierville STR Regulations

For official information and assistance:

City of Sevierville Business Licensing

• Phone: (865) 453-5504
• Website: www.seviervilletn.org
• Email: businesslicensing@seviervilletn.org

Sevier County Clerk’s Office (for county properties)

• Phone: (865) 453-5502
• Website: www.seviercountytn.gov

Tennessee Department of Revenue (tax information)

• Phone: (800) 342-1003
• Website: www.tn.gov/revenue

Future Outlook for Sevierville STR Regulations

Based on recent trends and local government discussions:

• Potential Fee Increases: Budget discussions have included proposals for increased permit fees
• Enhanced Enforcement: The city is investing in better monitoring technology
• Occupancy Limit Reviews: Discussions about revising maximum occupancy guidelines
• Tax Structure Changes: Possible adjustments to simplify the tax collection process

The overall outlook remains positive for STR investors, as tourism continues to grow and local government recognizes the economic benefits of a well-regulated STR market.

Ready to Invest in Sevierville Short-Term Rentals?

Sevierville offers incredible potential for STR investors who do their homework and follow the regulations. With its year-round tourism, proximity to the Great Smoky Mountains National Park, and relatively favorable regulatory environment, it remains one of the top markets for vacation rental investments in the Southeast.

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Remember: Always consult with local legal and tax professionals before making investment decisions.