Taxes in Pigeon Forge come in several layers. Retail purchases carry a combined 9.75% sales tax. Overnight lodging adds a 2.5% city occupancy tax on top of that, for 12.25% total. Attraction tickets carry an extra 2.5% amusement tax. Businesses operating in the city owe a 1% gross receipts tax on all sales. Property owners pay both city and county property taxes. Tennessee itself charges no state income tax on wages.
Sales Tax on Retail Purchases
Every retail purchase in Pigeon Forge is taxed at a combined 9.75%: Tennessee’s 7% state rate plus the 2.75% local option rate collected by Sevier County.1Justia Law. Tennessee Code 67-6-702 – Tax Authorized – Rates
The local 2.75% portion applies only to the first $1,600 of any single item of tangible personal property. On a big-ticket purchase like furniture or commercial equipment, the local tax caps at the amount owed on that first $1,600; the state 7% still applies to the full price.
Groceries and Prepared Food
Unprepared food you take home to cook is taxed at a reduced state rate of 4% rather than 7%.2Tennessee Department of Revenue. Due Dates and Tax Rates Combined with the 2.75% local rate, groceries carry a total tax of 6.75% in Pigeon Forge. Prepared food from restaurants, food trucks, delis, and ready-to-eat meals sold at convenience stores is taxed at the full 9.75%.3Tennessee Department of Revenue. SUT-54 – Prepared Food – Definition and Tax Rate Stocking a cabin kitchen for the week costs noticeably less in tax than eating every meal out.
Lodging Tax on Hotels, Cabins, and Rentals
Overnight guests pay the standard 9.75% sales tax plus a 2.5% city occupancy tax, bringing total tax on lodging to 12.25%.4City of Pigeon Forge. Lodging Revenue The occupancy tax applies to hotels, motels, cabins, condominiums, and campgrounds. It shows up as a separate line on the guest’s bill because it is charged to the customer, not absorbed by the operator.
Property owners and management companies collect the occupancy tax and remit it to the city’s finance department. Returns are filed monthly, with payment due by the 20th of the following month, and operators must file even in months with no guests.5City of Pigeon Forge. Forms – License, Permits, Etc
The 30-Day Rule for Extended Stays
Tennessee Public Chapter 364, effective July 1, 2025, changed how occupancy tax works for long stays. Operators must now collect occupancy tax for the first 30 continuous days of any guest’s stay. Once a guest hits 30 consecutive days, the operator remits what has been collected and stops charging the tax for the rest of that stay.6Tennessee Department of Revenue. Important Notice – Short-Term Rental Unit – 30-Day Occupancy Under the old law, stays that reached 30 days or more could claim a full exemption. The new rule ensures the first month of every extended stay generates tax revenue.
Amusement Tax on Attractions
Pigeon Forge charges a 2.5% amusement tax on admission charges at attractions, theaters, exhibitions, and other entertainment venues inside city limits.5City of Pigeon Forge. Forms – License, Permits, Etc Like the lodging tax, it is added directly to the customer’s bill on top of the 9.75% sales tax. A $50 ticket runs roughly $56.13 once all taxes are included.
Venues file amusement tax returns monthly with the city, with the same 20th-of-the-month deadline as the other local taxes, and must keep detailed records of admission charges and ticket sales.
Property Tax for City Homeowners
Property owners in Pigeon Forge get two property tax bills: one from the city and one from Sevier County. The county rate is $1.48 per $100 of assessed value.7Sevier County Government. Frequently Asked Questions The city rate is substantially lower, roughly $0.13 per $100, though both rates are set annually and can shift with each budget cycle.
Assessed value is not market value. Tennessee’s constitution sets the residential and farm assessment ratio at 25%, commercial and industrial at 40%, and business personal property (equipment, furniture, fixtures) at 30%. A home appraised at $300,000 has an assessed value of $75,000, and the tax rate is applied to that figure. At the county rate alone, the annual bill on that home works out to about $1,110.
Payment is due by the end of February. Starting March 1, interest of 1.5% per month (18% annually) accrues on unpaid balances.8Sevier County Government. Notices For mailed payments, the postmark date controls whether the payment is timely; office meter dates aren’t accepted. Online payments are recognized on the transaction date. Sevier County conducts a countywide reappraisal every five years, and owners can appeal their assessed value through the Sevier County Board of Equalization before taking a dispute to the state board.9State of Tennessee, Tennessee State Board of Equalization. Value Appeals
Taxes If You Operate a Business in Pigeon Forge
City Gross Receipts Tax
Every business operating in Pigeon Forge owes a 1% gross receipts tax on total sales. The tax excludes sales tax collected but includes wholesale transactions, out-of-state shipments, and all food and beverage sales.5City of Pigeon Forge. Forms – License, Permits, Etc Unlike the occupancy and amusement taxes, this one comes out of the business owner’s revenue; it isn’t a line item added to the customer’s bill. A restaurant doing $80,000 in monthly sales owes $800 in gross receipts tax.
Returns are due by the 20th of the month after the reporting period. Late payments trigger penalty and interest. The finance department mails forms around the 10th of the month, but not receiving the form is not a defense; owners are expected to request a replacement if the form doesn’t arrive.
Tennessee State Business Tax
Most businesses also owe the Tennessee state business tax on gross receipts, with rates that vary by classification. Retailers generally fall between 0.05% and 0.1875%, with a minimum tax of $22 per year.10Tennessee Department of Revenue. Due Dates and Tax Rates Returns are due on the 15th day of the fourth month after the fiscal year ends; for calendar-year businesses, that’s April 15. This is separate from sales tax, the city’s 1% gross receipts tax, and any federal filings, so budget for several layers.
Sales Tax Collection and Penalties
Businesses collect the 9.75% sales tax at the point of sale and remit it to the Tennessee Department of Revenue. Late payments carry a penalty of 5% of the unpaid amount for each month or partial month a return is delinquent, capped at 25%.11Tennessee Department of Revenue. GEN-16 – Penalties and Interest
Employment Taxes
Employers in Pigeon Forge, including tourism businesses hiring seasonal staff, follow the same federal payroll rules as any other employer: Social Security, Medicare, and federal income tax withholding apply to full-time, part-time, and seasonal workers alike. Tennessee has no state income tax on wages, so there’s no state withholding.12Tennessee Department of Revenue. GEN-34 – Income Tax Withholding
Federal unemployment tax (FUTA) applies at 6.0% on the first $7,000 of each employee’s annual wages, usually reduced to an effective 0.6% after the state unemployment credit of up to 5.4%.13Internal Revenue Service. Topic No 759 – Form 940 Employers Annual Federal Unemployment Tax Return Seasonal employers file Form 941 only for the quarters in which they pay wages and should check the seasonal employer box so the IRS doesn’t expect quarterly returns year-round.
Federal Income Tax on Short-Term Rental Income
Short-term rental income earned in Pigeon Forge is taxable at the federal level and reported on Schedule E. Because Tennessee has no state income tax on wages or business income, the federal return is the only income tax filing to worry about.12Tennessee Department of Revenue. GEN-34 – Income Tax Withholding
The 14-Day Exception
If you rent your property for fewer than 15 days in a tax year and also use it as a personal residence, you don’t have to report any of the rental income. The trade-off: you also can’t deduct any rental expenses for those days.14Internal Revenue Service. Renting Residential and Vacation Property For cabin owners who rent only during peak weekends, this can make a few thousand dollars in income tax-free at the federal level.
Deductions Beyond the 14-Day Threshold
Owners who rent for more days can deduct ordinary and necessary expenses tied to managing the property. The biggest for most cabin owners is depreciation: the IRS lets you write off a residential rental property over 27.5 years, spreading the purchase price (minus land value) across that period. Furniture, appliances, and capital improvements like a new roof or hot tub follow their own schedules.
Other deductible expenses include mortgage interest, property taxes, insurance premiums, cleaning, repairs and maintenance, property management fees, advertising, utilities, and travel to and from the property for management. Occupancy taxes paid to the city are also deductible as a business expense.14Internal Revenue Service. Renting Residential and Vacation Property Keep records of everything; the IRS draws a hard line between deductible repairs (a leaky faucet) and capital improvements (a bathroom remodel), and misclassifying one can trigger problems in an audit.
1099-K Reporting for Rental Hosts
Starting with the 2026 tax year, third-party booking platforms such as Airbnb and VRBO must issue Form 1099-K to any host receiving $600 or more in gross payments for the year. That threshold replaces a much higher reporting floor. The 1099-K goes to both the host and the IRS, so the agency already knows the income exists before you file.