In a recent decision aimed at addressing the surge in short-term lodging rentals, the Decherd Board of Mayor and Aldermen in Franklin County, Tennessee, has given the green light to a 4 percent privilege tax for bed-and-breakfasts and vacation homes rented for temporary stays.
The ordinance received unanimous approval during the board's meeting on September 9, marking the first step in the process. Subsequent readings and final voting are scheduled for the regular October and November meetings.
This move by Decherd follows a similar initiative by neighboring Winchester, which introduced a hotel/motel tax set at 5 percent for various forms of temporary accommodation.
Mayor Mary Nell Hess of Decherd emphasized the need for additional revenue, stating, "We’ve needed the money," highlighting the financial advantages the city anticipates from the tax implementation.
Impact on Short-Term Rental Platforms
The changes are particularly relevant to internet-advertised, short-term-lodging companies such as Airbnb and Vrbo, which have seen a significant uptick in usage in Franklin County.
Airbnb
Airbnb, a popular online platform for lodging arrangements and tourism experiences, operates as a commission-based broker without direct ownership of properties. The company facilitates homestays and tourism opportunities, generating income through booking commissions.
Vrbo
Vrbo, or Vacation Rentals by Owner, provides a platform for homeowners to list their properties for short-term rentals. The company operates on an annual subscription model, charging homeowners a fee to list their properties on the Vrbo website.
Local officials in Franklin County acknowledge the rise in internet-based temporary lodging stays, noting that these platforms have not been subject to the same lodging taxes paid by traditional hotels and motels.
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