hotel tax

Pictured is Hampton Inn, located at 1922 North Jackson St., Tullahoma.

Coffee County now officially has 2.5% hotel tax on the books.

On June 11, the county commission voted to adopt the new tax, effective July 1.

The hotel tax, also known as lodging or occupancy tax, will be collected countywide. The tax will not apply to camping at festivals.

In the two cities, that rate would be in addition to the existing occupancy tax rates – 5% in Tullahoma and 6% in Manchester.

In rural Coffee County, the hotel tax would be applied for the first time.

There are currently no hotels in the rural part of the county; however, according to the law (T.C.A. 67-4-1401), “hotel” is defined as “any structure or space, or any portion thereof, that is occupied or intended or designed for occupancy by transients for dwelling, lodging or sleeping purposes” and includes “any hotel, inn, tourist camp, tourist court, tourist cabin, motel or any place in which rooms, lodgings or accommodations are furnished to transients for consideration.”

While county officials say they never intended for the tax to apply to camp sites, it’s not clear if camping offered at festivals falls under that definition.

There was a discussion during the June 11 meeting as to whether the tax should apply to camping at the Bonnaroo and Exit 111 music festivals.

Some commissioners argued that the county has no authority to exclude the camping at festivals from the definition of “hotel.” Others said that Bonnaroo brings significant revenue to the county through sales taxes, and it would be appropriate for organizers to get a tax break.



County officials had two options. The first option was to approve a resolution including the definition of “hotel” as it is in the state law.

The second option was to include a “clarification” in the text, which would essentially exclude the festivals from the definition of “hotel.”

The text is as follows: “For clarification, this definition does not have application to any special event for which the promoter of the event authorizes attendees to that event to stay overnight on the premises for which such utilization is only for the purpose of the event.”

Seven commissioners voted to approve the hotel tax resolution without that clarification, with 12 commissioners casting a “no” vote. That vote failed.  

The final vote was for the resolution which would guarantee a tax break to the festivals. It received 17 favorable votes, one unfavorable vote and an abstention.

Two commissioners were absent. 



The revenue generated by this occupancy tax will be used to support local tourism and economic development.

County officials say the tax will raise about $280,000 per year.