Home-sharing company Airbnb on Wednesday announced an agreement with the Tennessee Department of Revenue that will allow the platform to collect state and local taxes on behalf of rental owners.
The announcement comes as the Nashville subway council nears a vote next week on several competing resolutions that would limit or regulate housing sharing in the city.
Starting March 1, Airbnb will collect both 7% state sales tax and local sales tax on all taxable Airbnb bookings, according to a company statement that says it works with 7,700 hosts. across the state. The company said more than $ 13 million in state and local sales taxes was owed last year on Airbnb bookings.
The deal does not include the occupancy tax for Metro hotel rooms, although Memphis has already made an agreement with the company to collect this tax and Nashville may do so in the future. Airbnb said the company is already in talks with Hamilton County and Knoxville about collecting their occupancy taxes.
Two Tennessee Republican lawmakers – Sen. John Stevens of Huntingdon and Rep. Cameron Sexton of Crossville – were included in Airbnb’s announcement applauding the deal.
“Home sharing and short-term rentals introduce a whole new world of travelers to Tennessee authenticity while providing new economic opportunities for thousands of middle-class residents,” said Laura Spanjian, director of policy of Tennessee for Airbnb, in the release. “We applaud the Haslam administration for its pro-business approach to public policy.”
Some members of the Metro Council have already questioned whether the city should outsource a traditional government function like collecting taxes to a private company.