Airbnb Reaches Tax Agreement With Tennessee



Airbnb will start automatically collecting taxes on behalf of itsTennessee hosts beginning in March, the company announced Thursday.

Entering into a statewide tax agreement with the Tennessee Department of Revenue, with each booking, Airbnb will collect 7 percent in state sales tax and depending on the area, between 1.5 and 2.75 percent in local sales tax.

Each year, more than $13 million of local and state tax revenue are due from Airbnb stays, and this new agreement is meant to ensure that the revenue is seamlessly collected in full.

With its own assessed room taxes, Memphis is one of the 350 cities nationwide that has partnered with Airbnb in the past. In May, Memphis made an agreement with Airbnb, authorizing the company to collect and remit Memphis’ occupancy and tourist taxes.

Home-sharing companies, like Airbnb are helping Tennessee’s traditionally less touristy neighborhoods see the economic benefit of tourism, the company’s officials say.

“Home sharing and short-term rentals are introducing a whole new world of travelers to the authenticity of Tennessee while offering new economic opportunities for thousands of middle class residents,” said Laura Spanjian, Airbnb's policy director in Tennessee. “We applaud the Haslam administration for its business-friendly approach to public policy.”

Memphis, one of 65,000 cities where Airbnb is available worldwide, has about 7,700 hosts. The San Francisco-based company has been active since 2008, and currently provides access to a few million temporary residencies around the world.

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