Understanding How to File Taxes in Nashville (and all Tennessee)

[Jonathan117]

I made a li'l flowchart to help you make sense of the various taxes needed to file and pay when you have a short-term rental property in Nashville, Tennessee. j

This assumes you have already applied for your tax accounts with the city of Nashville (Hotel Occupancy Privilege) and the county/state (through TNTAP, the statewide automated tax filing system). 

If you are using other services besides Airbnb to rent your property (e.g. V-R-B-O), they don't all have automated collection agreements with the state yet, so you will need to collect and file county and state sales taxes for any of those reservations through TNTAP yourself.

THERE IS SOME CONFUSION AROUND WHAT TAXES AIRBNB IS COLLECTING. AS OF the posting date of this thread, the Airbnb instructions incorrectly state that they are collecting Occupancy taxes. (They are using the term in a general sense, as the terms in each tax jurisdiction may differ). However it is not truly occupancy tax that they are collecting in Nashville. They are only collecting county and state sales taxes. YOU ARE RESPONSIBLE FOR HOTEL OCCUPANCY PRIVILEGE TAX as of now. I hope the moderators correct this small semantic error because it is causing a lot of confusion! 

[Erika-and-Mike0]

Thanks for the info, Janathan! How can you see in your hosting options online whether or not Airbnb has collected taxes for any reservations? Or whether it is planning to collect taxes for future reservations? Best/Mike

[Jonathan117]

Hi Mike,

I agree that it's difficult to find that info anywhere in the hosting section. The only place I can find out what the guest pays is in the reservation confirmation email. It shows it below the payment information ("Your guest paid $44.44 in taxes"). 

 

They only started collecting sales taxes on March 1, so for any guest reservations booked prior to March 1 (even if they are for dates after March 1), you are still responsible for collecting and remitting taxes.

HTH!

[Erika-and-Mike0]

That makes sense. Thank you very much for the info!

[Tina683]

i have an account number and understand i need to file the occupancy tax. 

however, do i need a TN sales and use tax account number for when Airbnb is remitting tax on my behalf?  how does the state know Airbnb is remitting on my short term rental?

thanks for all your input on these threads.

[Meredith62]

This is helpful Jonathan! Thanks! I have a guest who says air bnb has charged them a service fee and an occupancy tax. I am guessing the occupancy tax is the sales tax and the service fee is AirBnB's tax on using their website? Is this correct?

[Jonathan117]

 Glad it helped, Meredith!

That's correct. The service fee is what Airbnb charges, the Occupancy tax charged to guests is actually county/state sales tax. YOU are still responsible for filing/paying Metro Hotel Occupancy Priveleg Taxes.

[Meredith62]

one more question. Does the hotel and occupancy tax include the total before or after the sales tax is taken out? I do not see the sales tax listed on my end, so I am guessing I just calculate the hotel and occupancy tax on the amount charged instead of what I recieve?

[Jonathan117]

Yes, that's correct, it is based on the total gross fees. To calculate the basis for hotel occupancy taxes, I use the "gross fees" which includes the total price plus cleaning fees.  (Cleaning fees are considered income). The simplest place for me to grab that is in the "Payout" section when I get a new reservation email. That's the basis I use for calculating hotel occupancy.  

[Erika-and-Mike0]

By the way, hosts that make more than $10,000 a year are also required to pay business tax to the state of Tennessee. See here for more info: https://www.tn.gov/content/dam/tn/revenue/documents/notices/business/bus17-25.pdf

[Doy0]

Did you guys close your sales tax account now that Airbnb is collecting and remitting?

[Jonathan117]

I kept my account open because I also use VRBO to rent out my place, and they don't collect taxes on owners' behalf. If you only use Airbnb for your place, and once you've filed for all stays prior to March 1, then I believe you can close your TNTAP account.

[Doy0]

Thanks Jonathan! I was thinking about keeping mine open just incase I branch out to any other platforms but until then, I'm guessing I would just file zero each month until I take on something like VRBO, or just close the account. 

[Nicole750]

I am being fined by my tn county for taxes that were not filed. I cant get anyone to help me at the state or at airbnb. What do I do? They are collecitng and paying my taxes and I also hav to pay my taxes or get fined.

[Jonathan117]

What county are you in? I would google your county's name plus "occupancy tax" or "hotel tax" or "short term rental".  Is that what you're being fined for? Airbnb should be collecting state and county sales taxes on your behalf, so hopefully you're not being fined for those.