Real Estate Investors › Gatlinburg
FOR GATLINBURG CABIN OWNERSWho 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, and it starts with a free 30-minute call.
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 can apply once gross sales reach the statutory threshold for the tax year (commonly discussed at $100,000; confirm the current threshold before you rely on it). In a market where many active Gatlinburg listings gross in the mid tens of thousands, two cabins can cross the line without the owner thinking of themselves as "a business."
For sales and use tax, marketplace treatment can differ from business tax treatment. Do not assume that Airbnb collecting or remitting one tax hands off every Tennessee tax. For overnight rentals through a property manager, who owes business tax can turn on who is treated as the provider under Tennessee rules and on your management agreement. Read the agreement. Ask in writing.
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?
Tennessee generally includes in the taxable sales price more than the nightly rate. Required guest fees (commonly including required cleaning fees, and often items such as non-refundable pet charges, guest booking fees, and property damage protection fees under current guidance) can sit in the base. Cleaning is the one that bites in this market. If your books treat cleaning as a pure pass-through, that is worth a look. Confirm against current Tennessee rules before you file.
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.
Gatlinburg is one corner of our real estate investor practice. If you also flip, hold long-term rentals, or run both, see how we keep those books at our real estate investor page.
Cabins in the other Smokies towns: Pigeon Forge and Sevierville. See all our short-term rental bookkeeping.
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 for marketplace bookings handles that lane for those bookings. It does not automatically cover direct bookings, it does not automatically clear Tennessee business tax, and local lodging account or registration requirements can still apply depending on where the cabin sits. The platform closes one door, not all of them. Confirm your facts before you assume you are done.
My property manager handles everything. Am I covered?
Ask them in writing which filings they make in your name. Under Tennessee concepts, a property management company is often treated differently from a short-term rental unit marketplace, so remittance paths can differ from Airbnb or Vrbo. Business tax responsibility can also flip based on who is treated as the provider and what your agreement says. Assuming is how gaps happen.
At what point do I owe Tennessee business tax?
When your gross sales for the tax year meet Tennessee's current threshold (commonly discussed at $100,000; verify the current number). Gross sales generally means the full taxable amount, including required fees collected, not only 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?
Required cleaning fees are commonly included in Tennessee's taxable sales price for lodging, along with certain other required guest fees under current guidance. If your books treat cleaning as a pass-through, review it. Confirm before you file.
Can my cabin losses offset my W-2 income?
Sometimes, when the facts support it. Short average stays can take the activity out of the default "rental activity" bucket under the passive activity rules, and material participation can make losses non-passive, which is what owners usually mean when they talk about offsetting wages. Real estate professional status is a different rule that people mix up with this. You also need contemporaneous records of your hours, and other limits (basis, at-risk, grouping) can still apply. We will not green-light a W-2 offset from a website FAQ. If this is on the table, decide before year-end with your actual calendar and time log. 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.
Educational only. This page explains common issues we see with Smoky Mountain cabin owners. It is not tax, legal, or accounting advice for your situation. Federal, Tennessee, and local rules change, and outcomes turn on your facts (how guests book, what services you provide, average stay, your hours, your entities, and your management agreement). Confirm current requirements with a qualified professional before you file, remit, or take a return position. When we work together, we apply judgment to your actual books and filings, not to a webpage FAQ.
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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.
Rather not book a call? Email brooks@smokymountaincpas.com. Brooks answers every one.