Executive Overview: STRs are allowed in Memphis, TN, but only with a valid Short-Term Rental Operating Permit from the City. The governing ordinance (Memphis Code of Ordinances, Chapter 5-44; underlying Ordinance No. 5631) defines STRs, sets eligibility and safety requirements, and ties operation to zoning compliance. Non-compliance triggers fines and potential enforcement actions. Investors must also satisfy state-level requirements under Tennessee’s Short-Term Rental Unit Act (SB1086), obtain proper insurance, and collect/remit state and local taxes.

Below is a complete, investor-ready guide with steps, documents, regulations, contacts, and authoritative links.

1) Are STRs allowed in Memphis, TN?

• Yes—short-term rentals are allowed in Memphis with an STR Operating Permit.
• Operation is conditioned on:
  • Zoning compliance (only in eligible districts and in alignment with use restrictions).
  • Safety equipment and inspections.
  • Principal renter age and occupancy limits.
  • Insurance coverage.
  • Business licensing and tax registration/collection.
• Non-compliance can result in fines (e.g., fines per day per unit for operating without a permit), permit suspension/revocation, and legal action.

2) How to start a short-term rental business in Memphis

• Step 1: Confirm zoning eligibility
  • STRs must align with local zoning and use restrictions. Review Chapter 5-44 (Short-Term Rental Ordinance) and the Memphis Zoning Ordinance. If zoning is unclear, contact Planning & Zoning.
• Step 2: Secure insurance
  • Maintain liability insurance at or above the required minimums (see Section 4).
• Step 3: Apply for the Memphis STR Operating Permit
  • Submit the application, required documents, and fees; schedule any required inspection(s).
• Step 4: Obtain business licenses
  • City and county business licenses may be required to operate commercially in Tennessee.
• Step 5: Register for and start collecting taxes
  • Register with the Tennessee Department of Revenue (sales tax) and the Shelby County Trustee’s Office (room occupancy tax). Begin collecting from guests and remitting on schedule.
• Step 6: Prepare the property
  • Install/maintain required safety equipment; ensure the property meets the city’s occupancy and posting requirements.
• Step 7: Launch and maintain compliance
  • Display/communicate permit number, keep records, file taxes, renew annually, and respond promptly to complaints or code issues.

3) Required documents, permits, licenses, and guidelines

• City STR Operating Permit (Chapter 5-44; Ordinance No. 5631)
  • Application must include:
    • Owner name, address, phone, email
    • Responsible party name, address, phone, email
    • Management company (if applicable)
    • Maximum nighttime capacity
    • Site plan showing units/structures and site features
    • Proof of ownership
    • Proof of insurance evidencing at least $1 million liability coverage (homeowner’s fire, hazard, liability)
    • Certification of compliance
    • Inspection by Memphis/Shelby County Code Enforcement
    • Permit fee (see Section 5 for fee details)
  • Permit term and renewal:
    • Permits are issued for 365 days (annual) and must be renewed before expiration.
    • Non-transferable; some zoning restrictions may apply.
• Business licenses
  • City and county business licenses are typically required to operate commercial activities in Tennessee. Investors should confirm current requirements with local authorities.
• Insurance
  • City-level requirement: evidence of $1,000,000 minimum liability coverage (homeowner’s fire, hazard, liability).
  • State-level requirement under SB1086: maintain liability insurance of at least $500,000 unless the listing marketplace provides equivalent coverage.
• Safety and property standards
  • Five-pound fire extinguisher in each unit.
  • Approved smoke alarms in all sleeping areas.
  • Approved carbon monoxide detectors on every habitable floor.
  • Principal renters must be 18+ years of age.
  • Maximum occupancy: generally two guests per bedroom plus two additional guests (aligns with common Tennessee standards).
  • Posting requirements: name and phone number of responsible party must be posted in the unit.
  • No compensation/remuneration for stays under 24 hours.
  • No food or beverage service provided by the host.
• Taxes
  • State sales tax and local sales tax apply; room occupancy (lodging) tax also applies.
  • Hosts must collect from guests and remit to state and county authorities per filing cadence.
• Documentation the city may request
  • Personal ID, federal EIN, SSN or ITIN, proof of ownership/residency, site/floor plans, insurance proof, affidavits, and proof of notification to adjacent owners (where applicable).
• Helpful checklists
  • City permit checklist in the ordinance and municipal code.
  • Nashville-style checklist (for illustration) is available but is not the official Memphis checklist—use the Memphis Code and application portal as the authoritative source.

4) Specific regulations: Memphis (city), Shelby County (county), Tennessee (state)

• City of Memphis (Chapter 5-44; Ordinance No. 5631)
  • Allowed with permit; zoning compliance mandatory.
  • Eligibility: LLC ownership permitted.
  • Occupancy: principal renter must be 18+; maximum capacity must be stated.
  • STR definition: dwelling or habitable room rented for less than 30 consecutive days (excludes hotels, motels, B&Bs, boarding houses).
  • Safety: fire extinguisher, smoke alarms (sleeping areas), CO detectors (every habitable floor).
  • Posting: name/phone of responsible party in the unit.
  • Prohibitions: compensation/remuneration for stays under 24 hours; no host-provided food/beverage service.
  • Enforcement: fines and daily penalties for operating without a permit or in violation; potential suspension/revocation for persistent non-compliance.
• Shelby County (room occupancy tax)
  • Hosts must register and remit room occupancy (lodging) tax to the County Trustee. See links below for rates and filing portals.
• State of Tennessee (SB1086 – Short-Term Rental Unit Act)
  • Statewide baseline requirements:
    • Liability insurance of at least $500,000 unless the marketplace provides equivalent coverage.
    • Safety equipment: fire sprinklers (where applicable), smoke alarms, carbon monoxide alarms.
  • Local authority: Tennessee law prevents cities from banning STRs outright, but allows local regulations focused on health/safety and zoning, as well as taxes and operational rules.

5) Taxes and fees

• Fees (permitting)
  • Memphis STR Permit Application Fee: $100
  • Annual Permit Renewal Fee: $50
  • Note: Some third-party summaries reference higher initial fees (e.g., $300) and renewal fees (e.g., $150). Investors should rely on the official ordinance and current application portal for the enforceable fee schedule.
• Sales and occupancy taxes
  • Memphis total sales tax rate (combined state/local): 9.75%
  • Memphis room occupancy (lodging) tax: 5% (Shelby County)
  • Filing and payment cadence:
    • Sales tax registration and monthly/quarterly filings through the Tennessee Department of Revenue (TNTAP).
    • Room occupancy tax registration and filings through the Shelby County Trustee’s Office.
    • Payments are due monthly or quarterly per the applicable authority’s schedule. Hosts must collect lodging taxes from guests and remit on time.

6) Contact information (phone/email/portal)

• Memphis Planning & Zoning
  • Phone: (901) 576-6619
  • Email: planning@memphistn.gov
  • Note: The city’s Division of Public Works is referenced in third-party sources as the permit-issuing division for STRs. For definitive routing, start with Planning & Zoning; they can direct you to the appropriate permitting division.
• Memphis/Shelby County Code Enforcement
  • Contact via city/county offices; used for STR inspections and code compliance.
• Shelby County Trustee’s Office (Room Occupancy Tax)
  • Phone: (901) 222-0200
  • Email: trustee@shelbycountytn.gov
  • Portal: see link below (Trustee’s Office lodging tax information and online filing portal)
• Tennessee Department of Revenue (Sales Tax)
  • Phone: (615) 253-0600
  • Portal: see link below (TNTAP for registration and filings)

7) Important source pages and links

• Memphis Short-Term Rental Ordinance (Underlying Ordinance No. 5631):
  • shelbycountytn.gov/DocumentCenter/View/30578/Short-Term-Rental-Ordinance?bidId=
• Memphis Code of Ordinances – Chapter 5-44 (Short-Term Rental Ordinance):
  • library.municode.com/tn/memphis/codes/code_of_ordinances?nodeId=TIT5REFI_CH5-44SHTEREOR
• Memphis STR Permit Application (Shelby County Document Center):
  • www.shelbycountytn.gov/DocumentCenter/View/35741/STRApplicationFinal?bidId=
• Shelby County – Room Occupancy Taxes:
  • www.shelbycountytn.gov/570/Room-Occupancy-Taxes
• Tennessee Department of Revenue:
  • www.tn.gov/revenue.html
• TNTAP (Tennessee Taxpayer Access Point):
  • tntap.tn.gov/eservices/
• Steadily Article – Memphis STR Laws & Regulations (contextual overview):
  • www.steadily.com/blog/airbnb-short-term-rental-laws-regulations-memphis
• Commercial Appeal Article – Memphis to require permits for STRs:
  • www.commercialappeal.com/story/news/local/2023/03/21/city-of-memphis-to-require-permits-for-airbnbs-other-short-term-rentals/70034383007/
• Memphis Zoning Ordinance (use for zoning confirmation; linked in city resources):
  • library.municode.com/tn/memphis/codes/code_of_ordinances

8) Practical compliance checklist for investors

• Confirm zoning eligibility (residential vs. commercial districts).
• Secure insurance meeting city ($1M) and state ($500K) standards.
• Prepare and submit STR permit application (owner/responsible party info, site plan, insurance).
• Schedule and pass inspection(s) (code enforcement).
• Obtain city and county business licenses.
• Register for sales tax (TN DoR) and room occupancy tax (Shelby County Trustee).
• Equip property: fire extinguisher, smoke alarms, CO detectors; post responsible party info.
• Set guest rules: 18+ principal renter, occupancy limits, quiet hours, parking, 24-hour minimum stay.
• Establish tax collection and monthly filing routine.
• Maintain records, respond to complaints, and renew annually.

Investors should always verify the latest fee schedule and requirements with the official application portal and city ordinance, as third-party summaries can lag behind amendments. Maintaining documented compliance with zoning, safety, and tax obligations is essential for operating legally and profitably in Memphis.