NASHVILLE – Today, Airbnb announced a statewide tax agreement with the Tennessee Department of Revenue that will allow the company to collect and remit state and local sales taxes on behalf of its 7,700 Tennessee hosts. Airbnb is the world’s leading community driven hospitality company.

With the tax agreement in place, the state will be able to fully capitalize on people visiting Tennessee and staying longer through home sharing. Effective March 1, Airbnb will automatically collect and remit both the state sales tax (7%) and local sales taxes (1.5%-2.75% depending on the local jurisdiction) on all taxable Airbnb bookings in Tennessee, making the process seamless and easy for both Airbnb hosts and the state.

More than $13 million in state and local sales tax revenue is due annually from Airbnb bookings in Tennessee (based on 2017 numbers). This agreement will ensure all of this revenue is collected in a way that is easy for the hosts and state.

“I commend the State Department of Revenue for supporting Tennessee families maximizing their participation in the sharing economy,” said State Sen. John Stevens (R-Huntingdon). “As a state, we should continue to encourage these types of platforms that responsibly support host families. I love seeing Tennesseans taking full advantage of their private property rights and making valuable additional income.”

"It's phenomenal to see Tennessee taking a lead on cultivating the economic power of home sharing and Airbnb entering into this user fee collection agreement," said State Rep. Cameron Sexton (R-Crossville). "I appreciate Tennessee homeowners opening their doors in the long standing tradition of southern hospitality.”

Airbnb has partnered with about 350 of local governments throughout the U.S. to collect and remit taxes -- including the City of Memphis and neighboring states like Kentucky, Missouri, Alabama, Mississippi and Arkansas. This agreement with Tennessee DOR covers taxes assessed by the state, meaning any cities with their own separately assessed room taxes will require their own agreements with Airbnb -- similar to the agreement with Memphis announced in May which authorized Airbnb to collect and remit Memphis’ occupancy and tourist taxes. To that end, Airbnb is currently engaged in productive conversations with both Hamilton County (Chattanooga) and Knoxville regarding prospective agreements to collect and remit their respective occupancy taxes.

“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, Tennessee policy director for Airbnb. “We applaud the Haslam administration for its business-friendly approach to public policy.”

Home sharing has impacted a wide spectrum of Tennessee’s communities. Airbnb hosts significantly expanded lodging capacity during the eclipse as hotels as Tennessee cities along the path of totality completely sold out. In Knoxville, Airbnb provided additional, affordable lodging options for college parents and football fans during high volume weekends associated with the University of Tennessee. However, home sharing growth has also helped open up Tennessee’s less traditionally touristy communities to the economic benefits of tourism.

Tennessee hotel revenues continue to grow -- in parallel to Airbnb’s growth. This suggests that Airbnb is opening up the state to a new slice of prospective tourists by catering to travelers less able to afford hotels, those who desire to stay in neighborhoods or cities that lack hotels, and families who prefer to be together under one roof.

Airbnb welcomes the opportunity to secure tax agreements with any additional Tennessee municipalities who assess their taxes independently. Local governments should contact the company at taxagreements@airbnb.com to discuss further.