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, guests using the hospitality application will see a new item for the sales tax when booking rooms in Nashville.

The agreement comes as Nashville is considering banning short-term rentals in residential neighborhoods in homes that are not occupied.

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.

The company was founded in August 2008 and is located in San Fransisco, California. It is a community of people who market homes for short-term rentals so that others can have unique experiences around the world.

According to airbnb.com, the service is in more the 65,000 cities and 191 countries and over 3 million listings worldwide.

According to The Tennesseean, Nashville is the No. 1 market in Tennessee followed by Memphis.
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Information from: The Tennessean, http://www.tennessean.com