Tennessee agrees on sales tax for short-term rentals

NASHVILLE, Tenn. (AP) – Airbnb will now be able to collect and pay sales tax on behalf of its renters in Tennessee.

The Tennessean reports Airbnb announced an agreement with the Tennessee Department of Revenue on Wednesday that will allow the company to automatically deliver sales tax revenue to the state starting March 1.

The agreement comes as Nashville is considering banning short-term rentals in residential neighborhoods.

The new process will apply to collections from the 7 percent state sales tax and any local sales tax. But Metro Finance Director Talia Lomax O’dneal says the agreement only applies to state and local sales tax for short-term rentals operating on Airbnb, not the hotel/motel tax paid by short-term operators on any platform.

Airbnb says the process will ensure all sales tax revenue is collected.

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