Who is actually filing your occupancy tax?
Most Gatlinburg cabin owners cannot answer that, and there are three different right answers depending on how the booking came in. We do monthly bookkeeping and the business tax return for cabin owners in Gatlinburg and across Sevier County, plus a $497 Diagnostic Review to see where your books actually stand.
The question almost nobody gets right
Who remits the occupancy tax on a Gatlinburg cabin?
It depends entirely on how the guest booked, and Tennessee treats the three routes differently. Owners who run bookings through more than one channel are often in two of these at once without knowing it.
Booked through Airbnb or Vrbo
The platform is a short-term rental unit marketplace. Since 1 January 2021 it must collect the local occupancy tax and remit it to the Tennessee Department of Revenue, not to the city. You are not filing that one.
Booked direct
Your own site, repeat guests, the phone. No marketplace is involved, so nothing routes through the Department. You remit local occupancy tax directly to the local jurisdiction where the cabin sits.
Booked through a property manager
This is the one that catches people. A property management company is a vacation lodging service, and the state specifically excludes it from the definition of a marketplace. Your manager does not remit to the Department. Whether they file locally on your behalf depends on your agreement and the local code. Ask them, in writing.
Source: Tennessee Department of Revenue, Short-Term Rental Units tax manual. Rates and filing points differ inside Gatlinburg city limits from unincorporated Sevier County, so confirm your current rate with the jurisdiction that applies to your cabin before you remit.
The one that arrives as a surprise
Do you owe Tennessee business tax on your cabin?
Tennessee business tax applies once gross sales reach $100,000 or more in a tax year. In a market where the average active Gatlinburg listing grosses in the mid forties, two cabins can cross that line without the owner ever thinking of themselves as a business.
Here is the part that catches Airbnb hosts specifically. The platform being treated as the seller applies for sales and use tax purposes only. For business tax, the state is explicit that short-term rental providers remain responsible on rentals made through a marketplace. Airbnb handling your sales tax does not hand off this one.
The exception runs the other way: if a property management company provides the overnight rentals, the management company pays the business tax on those gross sales rather than you. Which is another reason the answer starts with reading your management agreement.
Nobody sets out to skip a filing. They just assumed the platform handled it, and the platform assumed the same about them.The Smoky Mountain way.
A detail worth real money
What counts as taxable rent?
More than the nightly rate. Tennessee includes in the taxable sales price all fees a guest must pay to rent the place, naming non-refundable pet deposits, guest booking fees, required cleaning fees, and property damage protection fees.
Cleaning is the one that matters most in this market. A Gatlinburg cabin can carry a cleaning fee well into three figures on every stay. Left out of the taxable base across a full season, that is not a rounding error.
What we actually do
Books built for how cabins here actually run.
Books kept per cabin
Gross bookings, platform fees, management fees, cleaning, supplies, repairs and the note, tracked against the specific cabin that produced them. A full calendar and a profitable cabin are not the same thing.
Statements reconciled, not trusted
Manager statements and platform payouts both arrive net. We rebuild gross revenue, the fees taken out, and the taxes already collected, so the return starts from the real number rather than the deposit.
Honest about scope
We keep the books and file the returns. We do not perform cost segregation studies, appraisals or audited statements. For a cabin recently placed in service a study is often worth doing, and we will work alongside whoever performs it.
Based in East Tennessee
We are not doing this from another state.
We are two licensed CPAs based in Knoxville, about an hour from downtown Gatlinburg. Sevier County is our own back yard, not a market we added to a list. AirDNA counts roughly 7,000 active short-term rental listings in Gatlinburg and more than 13,000 in Sevierville, and a good share of those cabins are owned by people who have never filed anything in Tennessee before.
You do not need us local to keep your books, and we will not come walk the property. What being here buys you is that we already know which questions to ask about your cabin, and we are not learning your market from a blog post.
Answers before you ask.
If Airbnb collects my taxes, do I still have to do anything?
Yes. Airbnb collecting and remitting local occupancy tax to the Tennessee Department of Revenue handles that one filing. It does not cover direct bookings, it does not cover Tennessee business tax, and Sevier County still expects a lodging account on file for cabins outside the city limits. The platform closes one door, not all of them.
My property manager handles everything. Am I covered?
Ask them in writing which filings they make in your name. A property management company is a vacation lodging service under Tennessee law, not a short-term rental unit marketplace, so it does not remit local occupancy tax to the Department the way Airbnb does. For business tax the treatment flips and the manager may owe it instead of you. Both answers turn on your agreement, and assuming is how gaps happen.
At what point do I owe Tennessee business tax?
$100,000 or more in gross sales in a tax year. Gross sales means the full amount including the fees collected, not what landed in your bank after platform and management cuts. Owners with two or three cabins in this market cross it more often than they expect.
Are cleaning fees taxable?
Yes. Tennessee includes required cleaning fees in the taxable sales price, along with non-refundable pet deposits, guest booking fees and property damage protection fees. If your books treat cleaning as a pass-through, that is worth a look.
Can my cabin losses offset my W-2 income?
They can, if the average guest stay is seven days or less and you materially participate. Meet both and the losses are non-passive. Most Gatlinburg cabins clear the seven-day test easily on weekend stays, which makes participation the live question, and it turns on contemporaneous records of your hours. You do not need real estate professional status for this. See our short-term rental page for how that interacts with Schedule E versus Schedule C.
Do you only work with Gatlinburg owners?
No. We work across Sevier County, including Pigeon Forge and Sevierville, and with cabin owners who live out of state entirely. The filings differ inside city limits versus unincorporated county, which is one of the first things we check.
Get the Rental Property Bookkeeping Checklist.
The monthly routine two CPAs use to keep rental books clean: per-property tracking, repairs versus improvements, deposits and escrow handled right. Free, one email, no hoops.
Find out what is actually being filed for your cabin.
Book a free fit call. We will walk through how your bookings come in, who is remitting what, and tell you honestly whether we are the right fit.
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Rather not book a call? Email brooks@smokymountaincpas.com. Brooks answers every one.