The Tennessee General Assembly passed S.B. 2182 on March 19 and the measure awaits execution by the Governor. The bill would require marketplace facilitators to collect and remit tax on behalf of their third-party sellers. Specifically, marketplace facilitators that made or facilitated total sales to consumers in the state of more than $500,000 in the
Tennessee
Tennessee Proposes Marketplace Facilitator Law
By Jonathan Feldman on
Posted in Marketplace
S.B. 2182 was introduced at the request of the governor. The bill would require marketplace facilitators with over $500,000 of annual in-state sales to collect and remit sales and use tax. If passed, the law would take effect on October 1.
This Blows! Tennessee Court of Appeals Says Blow-In Cards, Other Printed Materials Did Not Qualify for Sales Tax Exemptions
By Michael Kerman & Eric Tresh on
Posted in In the News
The Tennessee Court of Appeals held that a commercial printing company’s sales of bank checks and other printed products were subject to Tennessee sales tax even though the products ultimately were sent to out-of-state destinations. Under the company’s standard sales contracts, title to the products it sold transferred in Tennessee when the company tendered its…
Glass Half-Full: Tennessee Court of Appeals Applies “Dominant Business Activity” Test, Rules for Taxpayer in Business Tax Dispute
By Justin Brown & Charlie Kearns on
Posted in In the News
The Tennessee Court of Appeals held that a business that sold and installed automotive glass and also made repairs to automotive glass was properly classified as a seller of tangible personal property (glass), and not as a seller of services, for purposes of the Tennessee business tax. The Tennessee Department of Revenue audited the taxpayer’s…
Tennessee rules the “true object” of a bundled transaction is nontaxable data analytics services, not remotely accessed software
By Maria Todorova & Chris Lee on
Posted in Income
The Tennessee Department of Revenue issued a letter ruling finding that a taxpayer’s mobile and web data analytics services were not subject to sales and use tax. The taxpayer’s customers installed the taxpayer’s software code, which collected user data about the customers’ websites or mobile applications. The taxpayer then analyzed the data and granted the…
Tennessee DOR Subjects Cloud-Based Employee Scheduling Services to Sales and Use Tax
Posted on
Posted in Noteworthy Cases
The Tennessee Department of Revenue issued a letter ruling finding that a taxpayer’s annual subscription charge for its cloud-based employee scheduling services is subject to Tennessee sales and use tax.
In Tennessee, the use of computer software is subject to tax, even if it remains in the possession of…
Sixth Circuit Rejects a Narrow Reading of TIA to Deny Religious Nonprofit Federal Remedy
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Posted in Noteworthy Cases
By Alla Raykin and Charlie Kearns
The US Court of Appeals for the Sixth Circuit held that the Tax Injunction Act (TIA) barred a religious nonprofit from bringing a federal suit over Tennessee’s denial of a retroactive property tax exemption. In Islamic Ctr. of Nashville v. Tennessee, the Islamic Center of Nashville sought…
Tennessee Federal Court Holds That State Sales Tax on Railroad Carriers Does Not Violate the 4-R Act
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By Liz Cha and Eric Coffill
The United States District Court for the Middle District of Tennessee held that Tennessee’s sales tax on railroad carriers for the purchase or use of diesel fuel was not discriminatory under the Railroad Revitalization and Regulatory Reform Act of 1976 (4-R Act) even though it did not similarly apply…
Not So Fast: Tennessee Chancery Court Prohibits Department of Revenue from Enforcing Sales Tax Collection By Out-of-State Retailers
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By Eric Tresh and Liz Cha
On April 10, 2017, a Tennessee Chancery Court ordered that the Tennessee Department of Revenue is temporarily prohibited from enforcing a regulation that requires out-of-state retailers making annual sales in excess of $500,000 to collect and remit sales tax. The Order arises out of a dispute between the Plaintiffs…
Web-Based Communication Interface Subject to Tennessee Sales and Use Tax
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Posted in Policy and Legislation, Southeast
By Jessica Allen and Jeff Friedman
The Tennessee Department of Revenue (Department) released a letter ruling stating that a taxpayer’s charges for use of its web-based interface are subject to sales and use tax as the sale of ancillary services. The taxpayer’s proprietary software allows users to communicate through text and other messages on a…