Rental host taxes in Tennessee

Airbnb, Turo and the rest report your gross and withhold nothing. The gap between that and what you are taxed on is your costs, in Tennessee that gap is worth $2,252 in tax.

Take a driver who grossed $39,000 over 18,000 business miles. After mileage at 74.3 cents and the rest of the stack, worked through on the rental host page $10,100 comes off and $28,900 is left as taxable profit. That profit is what Tennessee and the IRS charge against.

What that leaves you owing in Tennessee

Self-employment tax	$4,083
Federal income tax	$861
Tennessee income tax	$0, no state income tax
Total tax	$4,944
Effective rate on gross	12.7%

Earning more in Tennessee

A single filer taking the standard deduction, this work as the only income, the calculator above handles the other filing statuses. Miles rise with earnings, so the deduction rises too, and the effective rate on gross climbs more slowly than it would for someone whose income grew without expenses attached:

Volume	Gross	Mileage off	Taxable profit	Tennessee tax	Total tax	Rate on gross
Part-time	$13,000	$0	$13,000	$0	$1,837	14.1%
Steady side income	$39,000	$0	$39,000	$0	$7,196	18.5%
Full-time	$63,000	$0	$63,000	$0	$12,729	20.2%

Tennessee specifics that change the number

Tennessee draws a sharp line by entity type. A sole proprietor faces only the gross-receipts business tax, and only after $100,000 of gross receipts in a county or city (a minimal activity license covers the $3,000 to $100,000 range; the business tax itself has a $22 minimum). Form an LLC, though, even a single-member LLC, and the franchise and excise taxes apply: 0.25% of net worth with a $100 minimum, plus 6.5% of Tennessee taxable income. In Tennessee, staying unincorporated is itself a tax decision.

Local taxes on a Tennessee let

The income tax below is only part of it. Short-term lets attract occupancy, lodging or transient taxes levied by the city or county rather than Tennessee, often at rates that dwarf the state income tax. Some platforms collect and remit them; some collect only part; in some places the host is on the hook entirely. That is a local question this calculator cannot answer, and it is the one hosts most often get wrong.

On $28,900 of profit, what the states around Tennessee would charge:

State	Its tax	vs Tennessee
Kentucky	$1,012	+$1,012
Arkansas	$1,050	+$1,050
North Carolina	$1,153	+$1,153
Mississippi	$1,156	+$1,156
Missouri	$1,217	+$1,217
Virginia	$1,404	+$1,404
Alabama	$1,405	+$1,405
Georgia	$1,500	+$1,500

Kentucky would take $1,012 more, $1,012 against Tennessee's $0.
Arkansas would take $1,050 more, $1,050 against Tennessee's $0.
North Carolina would take $1,153 more, $1,153 against Tennessee's $0.
Mississippi would take $1,156 more, $1,156 against Tennessee's $0.
Missouri would take $1,217 more, $1,217 against Tennessee's $0.
Virginia would take $1,404 more, $1,404 against Tennessee's $0.
Alabama would take $1,405 more, $1,405 against Tennessee's $0.
Georgia would take $1,500 more, $1,500 against Tennessee's $0.

Rental host tax questions in Tennessee

How much should a Tennessee host set aside?

About 12.7% of gross on the $39,000 example, $4,944 across self-employment tax, federal income tax and nothing to Tennessee. In practice that means moving about $127 of every $1,000 payout into a separate account the day it lands, and sending roughly $1,236 to the IRS each quarter, no platform withholds any of this for you. Set aside from each payout rather than finding it in April.

Does the $39,000 on my 1099-NEC match what Tennessee taxes?

No. Tennessee taxes profit, not gross. After $10,100 of deductions the taxable figure is $28,900, so there is no Tennessee tax either way. But the federal side drops by $2,252. The form reports what the platform paid out, it knows nothing about your costs, and no one subtracts them for you. On this example 26% of the gross never becomes taxable income, but only for the host who kept the records to prove it.