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The Tennessee Department of Revenue recently published Letter Ruling No. 21-05 (dated April 28, 2021) determining that an online marketplace was not a marketplace facilitator responsible for sales tax collection because it did not process payments.  The taxpayer is creating an online platform that allows a network of independent dealers across the country to make…

The Tennessee Department of Revenue posted Revenue Ruling #20-13 regarding whether a taxpayer is a marketplace facilitator subject to sales and use tax collection on sales made on its platform. The taxpayer in this ruling operates an online forum that connects retailers (mostly restaurants) with independent delivery persons. The definition of a marketplace facilitator in…

In Notice 20-20, the Tennessee Department of Revenue addressed the implementation of S.B. 1778, which will require marketplace facilitators to collect and remit local occupancy taxes levied on short-term rental units beginning January 1, 2021. Marketplace facilitators must collect and remit the Tourist Accommodation Tax, the Hotel Occupancy Tax, and similar local occupancy taxes…

A recent letter ruling from the Tennessee Department of Revenue concludes that the ownership of mortgages backed by Tennessee property was insufficient to subject a foreign investment fund (“Fund”) to the state’s franchise and excise taxes.

Tennessee broadly applies its franchise and excise tax to the extent permitted by the U.S. and state constitutions.  A…

On July 22, the Tennessee Governor signed into law S.B. 1778, which requires short-term rental unit marketplace facilitators to collect and remit local occupancy tax. The bill, as amended, defines “short-term rental unit marketplace” to mean any person or entity that provides a platform for compensation, through which a third party offers to rent a…

In a recently issued revenue ruling, the Tennessee Department of Revenue determined that a taxpayer’s digital services provided to other businesses were taxable “specified digital products,” a broad term based on definitions (and subject to detailed operating rules) in the Streamlined Sales and Use Tax Agreement. Sellers of business-to-business digital services should review this ruling…

The Tennessee Court of Appeals held that a manufacturer’s proceeds from a legal malpractice action are business earnings subject to the Tennessee excise tax. The malpractice action arose when the taxpayer’s attorneys improperly filed a European patent. The damages awarded in settlement of the claim were based on profits the taxpayer would have earned if…