Overview: Are Short-Term Rentals Allowed in Pigeon Forge, TN?

Yes, short-term rentals are explicitly permitted in Pigeon Forge, Tennessee. The city has established a comprehensive regulatory framework that allows for the operation of short-term rental units (STRs) while maintaining specific requirements for permits, safety standards, and operational compliance. However, investors should note that there are significant zoning restrictions and permitting requirements that must be followed to operate legally.

Pigeon Forge represents a unique market for short-term rental investments, given its status as a premier tourist destination in the Great Smoky Mountains region. The city welcomes millions of visitors annually, driven by attractions such as Dollywood, The Island entertainment complex, and proximity to the Great Smoky Mountains National Park. This robust tourism infrastructure creates strong demand for short-term accommodations, making it an attractive market for investors despite the regulatory requirements.

How to Start a Short-Term Rental Business in Pigeon Forge

Starting a short-term rental business in Pigeon Forge requires following a structured, multi-step process that includes obtaining proper permits, meeting safety requirements, and ensuring compliance with local regulations. The process is designed to maintain safety standards while allowing legitimate business operations.

Step-by-Step Process:

1. Property Zoning Verification and Due Diligence

   • Verify that your property is located in an approved zoning district for short-term rentals
   • Check if the property qualifies for any "grandfathered" status if located in R-1 districts
   • Confirm that the property can legally be used for STR purposes under current zoning codes
   • Consider hiring a local real estate attorney or zoning specialist for complex cases

2. Business License Acquisition

   • Obtain City Business License ($15 fee)
   • Obtain County Business License ($15 fee)
   • These licenses are required before applying for STR permits and must be renewed annually

3. Permit Application and Documentation

   • Submit Short-Term Rental Unit Permit application ($300 fee)
   • Complete all required documentation (detailed in the next section)
   • Ensure all forms are properly completed and signed

4. Safety Compliance and Inspection

   • Install required safety equipment (smoke alarms, carbon monoxide detectors, fire extinguishers)
   • Complete Life Safety Compliance Verification Form
   • Prepare for potential inspection by city or county officials
   • For properties outside city limits, prepare for Sevier County annual inspection program

5. Tax Registration and Setup

   • Register with Tennessee Department of Revenue for sales tax collection
   • Set up systems to collect and remit required taxes (city, county, and state)
   • Establish record-keeping procedures for tax compliance

6. Insurance and Legal Protection

   • Obtain liability insurance meeting minimum requirements ($500,000 minimum under state law)
   • Consider additional coverage beyond minimum requirements
   • Review and update insurance policies annually

7. Operational Setup

   • Designate a local contact person available for guest issues
   • Post required information including permit numbers
   • Develop house rules and guest communication systems
   • Establish safety protocols and emergency procedures

Required Documents, Permits, Licenses, and Guidelines

Mandatory Permits and Licenses:

City and County Business Licenses

• Cost: $15 each (total $30)
• Validity: One year, renewable annually
• Requirements: Must be obtained before STR permit application
• Where to Obtain: City license from Pigeon Forge City Hall; County license from Sevier County

Short-Term Rental Unit (STRU) Permit

• Cost: $300 for initial application
• Validity: One year, non-transferable
• Renewal: Required annually before expiration
• Non-transferable: Between properties or owners

Permit Types Available:

Pigeon Forge offers three distinct permit categories, each with specific eligibility requirements:

1. Owner Occupied Permit

• Eligibility: Property serves as owner's primary residence
• Restrictions: Excludes duplex properties
• Limitation: One permit per person
• Owner Presence: Not required to be present during rentals

2. Non-Owner Occupied Permit

• Eligibility: Property owners or lessees (with owner approval)
• Flexibility: Can be held by owners or their lessees
• Approval Required: Lessees need written permission from property owner

3. Unoccupied Permit

• Eligibility: Properties occupied only during STR use
• Holders: Available to owners or their agents/property managers
• Management: Suitable for professional property management operations

Required Documentation:

The permit application requires comprehensive documentation to ensure compliance and safety:

Property Information

• Complete property address and detailed description
• Site plan showing property boundaries, structures, and parking areas
• Floor plans showing room configurations and dimensions
• Property photographs (interior and exterior)

Ownership and Legal Documentation

• Proof of property ownership (warranty deed or property tax records)
• Proof of residency (if applicable for owner-occupied permit)
• Property survey or plat map

Applicant Information

• Owner's full legal name, mailing address, phone number, and email
• Applicant's name, address, phone number, and email (if different from owner)
• Federal EIN (Employer Identification Number)
• Social Security Number or ITIN

Local Contact Information

• Local contact person's complete details (name, address, phone, email)
• Must be available 24/7 for guest issues and city contact
• Can be the owner, property manager, or designated responsible party

Operational Details

• List of all hosting platforms and websites where property is advertised
• Maximum occupancy calculations based on bed and room limits
• Parking arrangements and capacity

Compliance Documentation

• Completed Life Safety Compliance Verification Form
• Proof of insurance coverage meeting minimum requirements
• City and county business license copies
• Previous STR permit copies (if renewal)

Specific Regulations for Short-Term Rentals

Local Pigeon Forge Regulations:

Zoning Restrictions and Limitations

• R-1 Zoning Districts: Properties can only operate as STRs if they were operating as such on or before August 13, 2018 (grandfathered properties)
• New Operations: Restricted from certain residential zoning areas
• Investment Properties: Limited to designated commercial or mixed-use zones
• Zoning Verification: Essential step in property acquisition due diligence

Occupancy Limits and Safety Standards

• Per Bed Limit: Maximum of two guests per bed
• Per Room Limit: Maximum of two beds per room
• Overall Property Maximum: 12 persons regardless of property size
• Fire Safety: All properties must meet fire code requirements
• Capacity Enforcement: Strict enforcement through inspections and complaints

Operational Requirements and Standards

• Permit Display: Must display permit number prominently on all signage
• Age Requirements: Principal renters must be 21 years or older
• Minimum Stay: Cannot rent for periods less than 24 hours
• Local Contact: Must post owner's name and phone number within each rental unit
• Availability: Local contact person must be available for guest issues
• Noise and Nuisance: Must comply with local noise ordinances and nuisance codes

Safety Equipment and Compliance

• Smoke Alarms: Required in all sleeping areas and on each level
• Carbon Monoxide Detectors: Required on every habitable floor
• Fire Extinguishers: Minimum 5-pound capacity in each unit, properly mounted
• Emergency Information: Must post emergency contact numbers and evacuation procedures
• Building Codes: Full compliance with all applicable building and safety codes

Sevier County Requirements:

Annual Short-Term Rental Unit Inspection Program

• Effective Date: January 1, 2024
• Scope: All STRs outside city limits
• Frequency: Annual safety inspections
• Coverage: Comprehensive safety and habitability standards

Inspection Requirements and Fees

• Base Fee: $250 for properties hosting 12 guests or fewer
• Additional Fee: $25 per person for properties with higher capacity
• Inspection Items: Fire extinguishers, smoke alarms, escape routes, electrical safety, carbon monoxide detectors, grill safety, stair handrails
• Compliance: All items must pass inspection before permit issuance or renewal

Enforcement and Documentation

• Inspector Authority: Certified county inspectors with enforcement powers
• Violation Response: Re-inspections required for failed items
• Documentation: Detailed inspection reports provided to property owners
• Timeline: Inspections must be completed before permit activation

State-Level Tennessee Requirements:

Insurance and Liability Standards

• Minimum Coverage: $500,000 liability insurance unless marketplace provides equivalent coverage
• Provider Options: Can be met through private insurance or platform coverage (Airbnb, VRBO, etc.)
• Verification: Proof of insurance required with permit application
• Ongoing Compliance: Insurance must remain current throughout permit period

Tennessee Short-Term Rental Unit Act Compliance

• Legal Framework: Governed by SB1086 effective May 17, 2018
• Definition Compliance: STRs defined as residential dwellings rented for less than 30 consecutive days
• Exclusions: Hotels, tourist courts, tourist camps, and motels specifically excluded

Tax Registration and Collection

• Sales Tax Registration: Required with Tennessee Department of Revenue
• Collection Responsibility: Host responsible for collecting applicable taxes
• Remittance Requirements: Regular filing and payment schedules apply
• Record Keeping: Detailed records required for tax compliance

Tax Obligations and Financial Requirements

State-Level Tax Requirements:

Tennessee State Sales Tax

• Rate: 7% on all rental transactions
• Collection: Must be collected from guests and remitted monthly
• Registration: Required with Tennessee Department of Revenue
• Filing: Regular filing periods as determined by revenue department

Local Tax Requirements:

Pigeon Forge City Hotel Occupancy Tax

• Rate: 2.50% on gross rental receipts
• Collection: Separate from sales tax, collected from guests
• Remittance: Monthly or quarterly filing as required by city
• Record Keeping: Detailed records required for accurate reporting

Sevier County Lodging Tax

• Rate: 3% on gross rental receipts
• Collection: Collected in addition to city and state taxes
• Administration: Collected through county trustee's office
• Compliance: Subject to county enforcement and penalties

Total Tax Obligation and Compliance:

Combined Tax Rate

• Total Rate: 9.75% (7% state sales tax + 2.5% city + 3% county)
• Impact: Significant impact on rental pricing and net income
• Collection Systems: Must establish efficient collection and remittance procedures

Additional Financial Considerations

• Property Tax: Potential reclassification as commercial property
• Income Tax: Federal and state income tax obligations on rental income
• Estimated Payments: Quarterly payments required if earning over $1,000 annually
• Deductions: Eligible business deductions to reduce taxable income

Contact Information for Local Authorities

Primary Regulatory Authority:

Pigeon Forge Planning and Development Department

• Primary Contact: Main office handling STR permits and regulations
• Phone: (865) 429-7350
• Physical Address: 3212 Parkway, Pigeon Forge, TN 37863
• Website: www.cityofpigeonforgeTN.gov
• Office Hours: Monday through Friday, 8:00 AM to 5:00 PM (verify current hours)
• Services: Permit applications, zoning questions, inspection scheduling, compliance assistance

Additional County Contacts:

Sevier County Assessor's Office

• Phone: (865) 453-5501
• Services: Property tax assessments, commercial property classification
• Website: www.seviercountytn.gov

Sevier County STR Inspection Program

• Application Portal: www.communityconnect.io/info/tn-seviercounty
• Services: Annual safety inspections for county properties
• Inspection Scheduling: Automated through online portal

State-Level Contacts:

Tennessee Department of Revenue

• Website: www.tn.gov/revenue
• Services: Sales tax registration, filing assistance, tax law interpretation
• Phone: Contact through main website for specific office locations and phone numbers

Utility and Service Providers:

Pigeon Forge Electric Department

• Phone: (865) 453-5454
• Services: Electrical service, safety inspections

Pigeon Forge Water and Sewer Department

• Phone: (865) 429-4556
• Services: Water service, sewer connections, health department coordination

Penalties and Enforcement

Violation Consequences and Financial Impact:

Permit and Licensing Violations

• Operating Without Permit: $50 fine per violation
• Permit Transfer Violations: Fines up to $500 per incident
• Late Renewal: Late fees and potential suspension of operations
• Documentation Failures: Additional fees and potential permit revocation

Safety and Code Violations

• Safety Equipment Non-Compliance: Up to $500 per violation
• Inspection Failures: Re-inspection fees and permit suspension
• Occupancy Violations: $500 per incident plus potential permit revocation
• Noise and Nuisance: Escalating fines from $100 to $500

Tax Non-Compliance

• Sales Tax Delinquency: Interest and penalties on unpaid amounts
• Local Tax Violations: Additional fines and legal action
• Record Keeping Failures: Audits and additional scrutiny

Enforcement Mechanisms:

Inspection and Monitoring Programs

• Routine Inspections: Annual inspections for county properties, random city inspections
• Complaint Response: Active investigation of neighbor and guest complaints
• Platform Monitoring: Regular monitoring of online platforms for unpermitted properties
• Code Enforcement: Dedicated enforcement officers with citation authority

Legal and Administrative Remedies

• Administrative Hearings: Formal process for contested violations
• Permit Suspension: Immediate suspension for serious safety violations
• Permit Revocation: Permanent loss of permit for repeated or serious violations
• Court Action: Legal action for continued non-compliance or tax delinquency

Appeals and Remediation Process

• Appeal Rights: Formal appeal process for disputed violations
• Compliance Agreements: Opportunity to cure violations within specified timeframes
• Reinstatement Procedures: Path to permit reinstatement after revocation

Links to Source Pages

Official Pigeon Forge Regulations and Applications

• City Website: www.cityofpigeonforgeTN.gov
• STR Permit Application: Pigeon Forge STR Application Form
• Municipal Zoning Ordinance: Pigeon Forge Zoning Regulations

State and County Resources

• Tennessee Department of Revenue: www.tn.gov/revenue
• Sevier County STR Inspection Portal: Community Connect
• Tennessee Short-Term Rental Unit Act: SB1086 Full Text

Industry Resources and Guides

• STRProfitMap Pigeon Forge Regulations: www.strprofitmap.com/regulations/TN/pigeon-forge
• Summer Guide to Tennessee STR Laws: www.gosummer.com/post/tennessee-short-term-rental-laws
• Hostfully Tennessee Regulations Overview: www.hostfully.com/regulations/tennessee/

Additional Information Sources

• GetChalet Pigeon Forge Regulations: www.getchalet.com/rental-regulations/pigeon-forge-tn
• Tennessee Secretary of State Business Filings: sos.tn.gov

Investment Considerations and Market Dynamics

Market Strengths and Opportunities

Tourism Infrastructure and Demand

• Year-Round Tourism: Strong visitor numbers throughout all seasons
• Major Attractions: Dollywood, Great Smoky Mountains National Park, The Island
• Convention and Event Market: Consistent demand from conferences and festivals
• Location Advantages: Strategic position between Nashville and Asheville

Regulatory Environment

• Explicit Permission: Clear legal framework allowing STR operations
• Established Process: Well-defined permitting and compliance procedures
• Professional Management Friendly: Provisions for unoccupied permits and property management

Challenges and Risk Factors

Zoning Limitations

• Restricted Areas: Significant portions of city zoned for residential use only
• Legacy Property Advantage: Existing STRs in R-1 zones have competitive advantage
• New Investment Constraints: Limited zones available for new STR investments
• Due Diligence Requirements: Essential to verify zoning compliance before purchase

Regulatory Compliance Burden

• Multiple Permit Requirements: City, county, and state compliance obligations
• Annual Inspections: Additional costs and administrative burden
• Safety Standards: Ongoing maintenance and equipment replacement requirements
• Tax Complexity: Multiple tax jurisdictions and filing requirements

Market Competition and Saturation

• Established Operators: Strong competition from existing, grandfathered properties
• Professional Management: Increasing professionalization of STR management
• Platform Competition: Direct competition with established hotels and accommodations

Strategic Recommendations for Investors

Property Selection and Due Diligence

• Zoning Verification: Engage zoning attorney