Everything you need to legally operate an Airbnb or VRBO in Memphis and Shelby County. Written by operators who run Memphis short-term rentals every day.
If you rent a residential property to transient guests for less than 30 consecutive days inside Memphis or unincorporated Shelby County, you need a permit. Full stop. This applies regardless of platform (Airbnb, VRBO, Booking.com, direct bookings), regardless of ownership structure (individual, LLC, trust), and regardless of whether you occupy the property yourself.
The city ordinance defines a short-term rental as a residential dwelling unit, a portion of a dwelling unit, or a detached accessory dwelling unit containing not more than three sleeping rooms that is rented for transient occupancy of less than 30 continuous days.
Memphis permits STR ownership by LLC. This is important because Nashville restricts non-owner-occupied STRs through a permit cap, while Memphis does not. The permit is still issued to a specific property address and a specific responsible ownership entity, so transfers require a new permit. This is one of several reasons Memphis consistently outperforms Nashville for out-of-state STR investors.
Memphis and Shelby County's updated STR framework took effect July 1, 2023. Properties operating as STRs before that date received grandfathered protection from the new permit requirements. That protection is real, but narrow, and conditional.
When you buy a grandfathered STR, the grandfathered status does not transfer. You are required to apply for a permit under current rules before re-listing. This is one of the most common traps for new investors acquiring an operating STR from a previous owner.
Use this as your pre-application punch list. Every item below is pulled from the Shelby County STR application and the operational provisions of Chapter 5-44 / Ordinance 5631.
Every day you are not permitted is a day you cannot legally list. This is the fastest-to-approval sequence, run in parallel wherever possible.
Call the Memphis Planning Department at (901) 576-6619 or the Shelby County Division of Planning and Development at (901) 576-7197 with the exact property address. Confirm the property's zoning designation and confirm that STR use is permitted in that district under the current Unified Development Code. Skipping this step and finding out later that your property is in an ineligible district is a six-figure mistake.
Work with a broker who understands short-term rental exposure, not a standard homeowner's carrier. The policy must show at least $1,000,000 per-occurrence liability coverage plus fire and hazard coverage. Primary residence homeowner's policies rarely cover STR activity, and carriers frequently deny claims on unpermitted commercial use. A dedicated STR policy (sometimes called a landlord/commercial dwelling or hospitality rider) is what you actually need.
Contact Memphis/Shelby County Code Enforcement to schedule the final inspection. The inspector is verifying life safety: smoke alarms, carbon monoxide detectors, fire extinguisher, egress, and no outstanding code violations. If you fail, you correct and re-inspect. Build in two to three weeks of buffer here for a first-time property.
It does not need to be architect-drawn. A hand-drawn, to-scale sketch showing the dwelling footprint, other structures, driveway, parking, and property lines is acceptable. Include the street name and address clearly on the drawing.
Pick a person (owner, co-host, property manager) who lives within 50 miles of the property, is 21 or older, and can answer a phone 24 hours a day. They must be able to be physically present at the property within two hours of a notification from the City or County regarding an issue. Their name and phone number will also need to be conspicuously posted inside the rental.
Contact the Shelby County Clerk's Office to register for a combined City of Memphis and Shelby County business license ($15 each, $30 total for properties within Memphis city limits). This is separate from the STR permit and is a prerequisite for operating a commercial activity in the County.
Memphis and Shelby County STR permit applications are filed online through the Accela Citizen Access portal at aca-prod.accela.com/SHELBYCO. Create an account, select the Short-Term Rental permit type, complete the application (all certifications initialed, signed under oath), upload your site plan, proof of ownership, and proof of insurance, and pay the $300 non-refundable application fee. This is the same portal the City and County use for all building permits, so if you have done any permitted work on the property, you may already have an Accela account.
Register with the Tennessee Department of Revenue via the Tennessee Taxpayer Access Point (TNTAP) for state sales tax. Register with the Shelby County Trustee's Office for the county room occupancy tax. Register with the City of Memphis for the 4% Memphis hotel/motel tax. Do this before your first booking posts.
Five-pound ABC-rated fire extinguisher in each unit. UL 217-certified smoke alarms in every sleeping area and along every egress path. Carbon monoxide detectors on every habitable floor. Laminated responsible party contact and house rules posted in a visible interior location.
Once issued, your STR permit number must appear on any advertisement or listing for the property. This is not optional. Failure to display the permit number on a listing is itself a violation.
The permit itself is cheap. The actual out-of-pocket to get to your first guest is not. Here is a realistic all-in breakdown for a typical Memphis non-owner-occupied STR.
These are hard government costs only. They exclude your insurance premium (typically $1,500 to $3,500 annually for a Memphis STR depending on property value and coverage), safety equipment ($150 to $400 for alarms and extinguishers), signage, and the software stack most operators run. Run your own numbers with our Memphis rental investment calculator.
Send your address and email. We will map the permit path for your specific property (zoning, grandfathering signals, inspection prep under Ordinance 5631) and include a revenue estimate built from live Memphis short-term rental data. Free, no obligation, one business day.
These are the non-negotiable life safety items. Inspectors will look for all of them. Missing any single one is grounds for a failed inspection, and a failed inspection is grounds for permit denial.
| Item | Specification | Where it goes |
|---|---|---|
| Fire extinguisher | Minimum 5-pound, rated for Class A, B, and C fires | One per rental unit, in a visible and accessible location (kitchen or central hall are standard) |
| Smoke alarms | UL 217-certified | Every sleeping area, every room along the egress path from sleeping area to exterior door, and every habitable floor |
| Carbon monoxide detectors | Meeting applicable Tennessee state law standards | Every habitable floor |
| Responsible party posting | Conspicuous, readable, laminated is best | Interior wall in the main living area |
The ordinance prohibits STR operators from providing food or beverage service to guests as part of the rental. The only exception is packaged, sealed, non-perishable items. No home-prepared breakfasts, no coffee service beyond sealed pods, no fruit baskets with unwrapped items. If you want to operate as a bed-and-breakfast, that is a separate license class with a separate regulatory framework (including health department inspection).
The Responsible Party (sometimes called the Short-Term Rental Agent or Local Contact) is the single most operationally demanding requirement in the ordinance. Misunderstanding this role causes more permit issues than anything else.
If you are an out-of-market owner, the Responsible Party requirement is the single biggest reason to hire a professional. LPS serves as the designated Responsible Party for Memphis STR owners across the city. We answer the phone, we show up, we handle the neighbor call at 1 a.m. before it becomes a code enforcement complaint. Talk to us about adding your property , learn about our full-service STR management , or see how a Memphis STR performs under management.
The $1,000,000 liability number is a floor, not a target. Here is what the ordinance actually requires and what sophisticated operators carry.
Tennessee's state-level STR law (TCA 13-7-603) requires STR operators to maintain liability insurance of at least $500,000 unless the listing marketplace provides equivalent coverage in aggregate. Shelby County's $1,000,000 requirement is the higher bar, so that is the number you need to hit.
Dedicated STR or hospitality-grade policies from carriers like Proper Insurance, Steadily, CBIZ, and several specialty lines from Lloyd's and Markel address these gaps. We cover the full insurance picture in our Memphis landlord insurance guide. The underwriting question that matters most is whether the carrier treats your property as a commercial dwelling (they will ask nightly rate, max occupancy, annual revenue, and platform). Do not patch a homeowner's policy with an STR endorsement unless the carrier explicitly endorses the commercial use in writing.
Airbnb's AirCover for Hosts and Vrbo's Liability Insurance provide secondary protection, and they only apply to bookings made through those platforms. They do not satisfy the Shelby County proof-of-insurance requirement, they do not cover direct bookings, and relying on them as your only coverage is a coverage gap that ends careers.
We pre-screen zoning, HOA rules, and revenue potential before you close. See why Memphis is a strong STR market and our case study on a managed Memphis STR.
Memphis takes a relatively permissive approach to STR zoning compared to Nashville or Chattanooga. STR use is allowed in most residential and commercial districts so long as the property meets the permit requirements. That said, "most" is not "all," and the zoning check is the single most important due-diligence step before you close on a property intended for STR use.
If the property is not STR-eligible in its current zoning, check whether it is a fit for long-term rental management. Same asset, different operating model, and the LTR inventory in Memphis has been strong across most neighborhoods.
The STR permit alone does not make you legal. You also need the business licensing infrastructure behind it and a clear picture of which tax accounts you actually need to register for yourself.
Tennessee designated short-term rental marketplaces as tax collectors in 2021. Airbnb and Vrbo (the vacation rental arm of Expedia Group) both operate as registered marketplace facilitators, which means they collect and remit the full stack of lodging taxes on your Memphis bookings: the 7% Tennessee state sales tax, the 2.75% Shelby County local option sales tax, the 4% Memphis hotel-motel tax, and the 5% Shelby County hotel-motel tax. In practice, Memphis operators who list exclusively through these two platforms do not need to register for and actively manage their own lodging tax accounts; the platforms handle the collection and the filings on those bookings.
The moment you add any other booking channel(your own website, a Furnished Finder listing, a Booking.com listing, a smaller platform, or a corporate stay inquiry that converts outside a platform), you become responsible for collecting and remitting every layer yourself, which means registering with each taxing authority first. See the platform-by-platform breakdown below for the full picture.
Two registrations apply to effectively every Memphis STR operator, whether you use platforms or not.
| Registration | Where | What it covers |
|---|---|---|
| Tennessee Sales Tax Account | TN Department of Revenue (TNTAP portal) | State sales tax (7%) and local sales tax (2.75%) |
| Shelby County Room Occupancy Tax | Shelby County Clerk's Office, (901) 222-3059 | 5% county hotel-motel tax on transient occupancy |
| City of Memphis Hotel-Motel Tax | City of Memphis Treasury / Finance | 4% Memphis city hotel-motel tax |
| Tennessee Business Tax | TN Department of Revenue | Required if gross receipts exceed $10,000 in a county or city jurisdiction |
This is the section that costs the most operators money. Memphis has one of the highest combined lodging tax rates in the country, and the marketplace-facilitator rules mean different taxes are collected by different parties in different ways. Here is the full picture.
Tennessee is a marketplace facilitator state. Under TCA 67-4-1502, short-term rental marketplaces are required to collect and remit lodging taxes on the bookings they facilitate within Tennessee. But not every platform operators use counts as a marketplace facilitator under Tennessee law. The breakdown matters.
| Platform | TN Marketplace Facilitator Status | What this means for you |
|---|---|---|
| Airbnb | Yes | Airbnb collects and remits the full 18.75% stack on every Memphis booking. No separate tax registration needed for Airbnb-only operators. |
| Vrbo(Expedia Group) | Yes | Vrbo collects and remits the full stack on every Memphis booking. Same treatment as Airbnb. Vrbo is the vacation rental arm of Expedia Group. |
| Expedia.com | Yes, through Vrbo | Vacation rental bookings flowing through Expedia.com are routed through the Vrbo platform and are covered the same way. Hotel bookings on Expedia are separate and not relevant to STR operators. |
| Booking.com | Partial / verify current status | Booking.com collects some Tennessee taxes at the time of booking, but its local occupancy tax collection has historically been incomplete in Tennessee. Verify coverage in your extranet before you list and assume you may need to collect the gap yourself. |
| Furnished Finder | No | Furnished Finder is a paid listing directory, not a booking platform. Guests contact you and book directly via a lease, so no taxes are collected by Furnished Finder. Most Furnished Finder stays are 30+ days and are not STRs, but any stay under 30 days is an STR and you are responsible for the full 18.75%. |
| Direct bookings(your website, email, repeat guests) | N/A | Zero platform involvement. You are responsible for registering with every taxing authority, collecting taxes from guests, and remitting monthly returns yourself. |
The practical rule for Memphis: if Airbnb and Vrbo are your only two channels, tax operations are largely automated. Add a third channel and your tax workload changes materially regardless of which third channel it is.
Even if you stay on Airbnb and Vrbo exclusively, the following can still create direct filing obligations:
Most Memphis operators start on Airbnb exclusively, where platform-collected taxes mean tax operations are near-zero for the owner. Then they add Vrbo (also covered), then a direct booking site on their own website, then start taking corporate inquiries by email (not covered), then add listings on Furnished Finder or smaller platforms (not covered). By the time a tax audit arrives, they have 24 months of off-platform revenue with no tax registration, no collection, and a compounding penalty. Before you add any booking channel beyond Airbnb and Vrbo, register with each taxing authority and set up collection on the new channel.
These are the rules you must comply with for every single stay. They come directly from the ordinance and are enforced through code violations and complaint-driven inspections.
Once your permit is issued, the way you list the property is also regulated.
Enforcement has ramped up materially since the July 2023 ordinance update. The City and County now use third-party monitoring software to cross-reference public listings against the permit database and identify unpermitted rentals.
The permit expires exactly 365 days after issuance. There is no grace period. Operating on an expired permit is operating without a permit.
A lapsed permit requires a new initial application (with the initial fee, not the renewal fee), a new inspection, and fresh certifications. During the gap, you may not legally list or host guests. Set the renewal reminder for 60 days out, not 30.
If your permit application is denied, or your existing permit is revoked or not renewed, you have the right to appeal to the Memphis Short-Term Rental Appeals Board established under Section 8 of Chapter 5-44.
We run Memphis short-term rental operations every day and review prospective properties across the city constantly. These are the mistakes that cost owners the most.
Yes. Memphis permits STR ownership and operation by LLC. The permit is issued to the owner of record (which may be the LLC), and the Responsible Party is always a natural person designated in the application. Most investor-owned Memphis STRs operate as LLCs for liability and tax reasons.
If your property passes inspection on the first attempt, your documentation is complete, and you submit during a non-peak week, approval typically takes two to three weeks. First-time owners in properties that need minor corrections (a missing smoke alarm, an egress issue, a garbage code issue) should plan for four to six weeks. If you are scheduling a property purchase around an STR launch date, build in a 60-day buffer from closing to first guest.
Yes. Each property requires its own permit. If more than one short-term rental unit exists within a single dwelling (for example, a duplex being operated as two separate STRs, or a detached ADU in addition to the main house), each unit is treated as its own STR and requires its own permit, application, and fee.
No. Permits are explicitly non-transferable. They are not assignable to another individual, person, entity, or address, and the permit does not authorize any person other than the named permit holder to operate at that property. A new owner must apply for their own permit under the current rules.
For Memphis bookings made through Airbnb or Vrbo, the platforms collect and remit all applicable lodging taxes: state sales, local option sales, Memphis hotel-motel, and Shelby County hotel-motel. Memphis operators who list exclusively on these two platforms generally do not need to register for and actively manage separate lodging tax accounts. You still need a City and County business license (a one-time $30 total), and you should periodically verify on your Airbnb host dashboard under "Taxes" that the platform is collecting every layer. If you add any booking channel outside Airbnb and Vrbo (direct booking site, email inquiries, smaller platforms), the tax picture changes and you become responsible for the full stack yourself.
Yes, as long as the individual (not the company) named on the application meets all the requirements: natural person, 21 or older, within 50 miles, 24/7 availability, and ability to be on-site within two hours. A local property management company's operations lead or principal can and typically does serve as the Responsible Party on behalf of out-of-market owners.
The Clerk's Office is required to notify the owner of any citation for code violation or similar nuisance behavior on the property. Three or more violations trigger loss of grandfathered status and can result in permit suspension or non-renewal. First response is key: a Responsible Party who handles the complaint on-site within the two-hour window usually prevents escalation. An owner who does not respond, or whose contact number rings to voicemail at 2 a.m., usually escalates straight to code enforcement.
Yes. The ordinance defines an STR as a residential dwelling unit, a portion of a dwelling unit, or a detached ADU rented for less than 30 consecutive days. A spare bedroom rented through Airbnb falls within "a portion of a dwelling unit" and requires a permit.
Yes. A rental to the same occupant for 30 or more consecutive days is not a short-term rental under the ordinance, and a standard residential lease or corporate housing agreement applies instead. This is the basis of the "mid-term rental" model some Memphis investors use to avoid the STR permit regime entirely, particularly for traveling nurses, insurance displacements, and corporate assignments.
Mud Island and Harbor Town are within Memphis city limits and follow the standard Chapter 5-44 permit process. Properties in overlay districts (historic overlays, the Center City Commission district, or HOA-governed condominium associations) may have additional restrictions layered on top of the city permit. HOA CC&Rs in some downtown Memphis buildings explicitly prohibit short-term rentals regardless of whether a city permit is obtainable. Pull the HOA documents before you buy.
There is no neighborhood-level outright ban, but some residential condominium buildings and planned communities have HOA restrictions that functionally prohibit STRs. Separately, any parcel rezoned from residential to commercial is subject to an 18-month waiting period before an STR permit can be issued. Verify zoning and HOA restrictions at every specific address you consider.
The 2-per-bedroom-plus-2 formulation is a widely applied occupancy standard across Tennessee and reflects common practice in Memphis STR operations. The Memphis ordinance itself requires operators to state a maximum transient capacity on the application and operate within that number. Your listing and house rules should reflect what your permit application states. Inspectors and neighbors both pay attention to this number.
Yes. Memphis STR operators need both a City of Memphis business license and a Shelby County business license. Both are obtained through the Shelby County Clerk's Office and cost $15 each ($30 total). This is separate from the $300 STR permit itself. Most first-time owners forget this and get caught at tax filing time.
Yes. Memphis permits both owner-occupied and non-owner-occupied short-term rentals with proper permitting. Unlike Nashville, which restricts non-owner-occupied STRs through a permit cap and specific zoning overlay, Memphis does not cap the number of non-owner-occupied STR permits. This is one of the most important structural reasons Memphis has become such a strong market for out-of-state STR investors over the past few years.
24 hours, per the ordinance. No Memphis STR may receive compensation for occupancy of less than 24 hours. Day-use and hourly rentals are not permitted at all. There is no ordinance-mandated minimum beyond 24 hours; many operators set 2-night minimums for cleaning economics and to filter out party-focused bookings, but that is an operator choice, not a requirement.
No. Memphis does not have a permit cap or a waitlist for non-owner-occupied STRs. Nashville has a cap and a waitlist; Memphis does not. As long as the property meets zoning, safety, and insurance requirements, a permit will be issued on the standard timeline. This is one of the most important facts for investors comparing Memphis to other Tennessee markets.
Yes, with separate permits per unit. A duplex being operated as two separate STRs requires two separate permits, each with its own application, $300 fee, inspection, and insurance coverage. A detached accessory dwelling unit (ADU) can be permitted as an STR if it complies with applicable building codes and contains no more than three sleeping rooms. If you are operating both the primary dwelling and a detached ADU as separate STRs, each is treated as its own STR and needs its own permit.
Making money month after month while staying compliant, answering the 2 a.m. call, and keeping the reviews at 4.75+ stars is the harder part. Thinking about renting it out? LPS handles Memphis Airbnb and short-term rental management at a flat 10% all-in, and we handle the permit for you.
Running a Memphis STR legally and profitably is a full operations job. The permit is the starting line. Here's what the actual workload looks like.
| Responsibility | Solo operator | With LPS |
|---|---|---|
| Verify zoning and STR eligibility | You | LPS pre-screens |
| Source and bind STR insurance | You | We refer vetted brokers |
| Pass code enforcement inspection | You | LPS coordinates |
| Submit and track the Accela application | You | LPS handles |
| Act as Responsible Party (24/7, 50-mile, 2-hour rule) | You or a local contact | LPS is your Responsible Party |
| Install and maintain all safety equipment | You | LPS stages and audits |
| Tax registrations (state, county, city) | You | LPS advises |
| Annual permit renewal tracking | You | LPS tracks and renews |
| Listing setup, photography, pricing | You | LPS full-service |
| Guest communication, reviews, turns | You | LPS handles |
| Neighbor relations and complaint response | You | LPS on-call |
| Compliance audit and violation response | You | LPS manages |
If you want the short-term rental income without the short-term rental workload, that's the gap LPS fills. If your property isn't a fit for STR at all because of zoning or HOA restrictions, we also run a Memphis long-term property management program that pivots the same asset into stable monthly rent.
The authoritative sources. When in doubt, these are the phone numbers to call.
The online portal where Memphis and Shelby County STR permit applications are filed, paid, and tracked.
(901) 636-6711
Room occupancy tax registration and filing.
150 Washington Ave, Suite 200
Memphis, TN 38103
(901) 222-3059
Zoning verification for addresses within Memphis city limits.
(901) 576-6619
Zoning for unincorporated Shelby County properties and comprehensive planning questions.
125 N Main St #468
Memphis, TN 38103
(901) 576-7197
General permits, licenses, and regulatory permits questions.
2714 Union Ave Ext. Suite 100
Memphis, TN 38112
(901) 636-6711
Inspection scheduling and code violation resolution.
(901) 222-8300
State sales tax, business tax, and TNTAP portal registration.
(615) 253-0600
Business license registration, general licensing questions.
150 Washington Ave, Suite 200
Memphis, TN 38103
(901) 222-3000
Explore the rest of our Memphis STR owner library.
About this guide. This page is maintained by LPS (Longstep Property Solutions), a Memphis-based property management company specializing in short-term rental operations. We run Memphis STR properties every day and wrote this guide from the operator's perspective.
Verify before you rely. Memphis and Shelby County ordinances, fee schedules, and tax rates can change. Fees, tax rates, and specific procedural details should be verified with the issuing office before you submit any application or make any financial decision. This guide is informational and is not legal, tax, or insurance advice. Consult a licensed attorney, CPA, or insurance broker for advice specific to your situation.
Last updated: April 2026. Based on Ordinance No. 5631 (Chapter 5-44) effective July 1, 2023, the $300 initial / $150 renewal fee schedule under the 2023 amendment, the April 2025 Memphis city hotel-motel tax increase to 4%, and the current Accela Citizen Access permit portal for Memphis and Shelby County.
