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
Tennessee
On Call: Tennessee DOR Says B2B Digital Services Subject to Sales Tax as “Specified Digital Products”
By Michael Kerman & Charlie Kearns on
Posted in Noteworthy Cases
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…
Tennessee Enacts Lower Remote Seller and Marketplace Sales Threshold
By Jonathan Feldman on
Posted in Marketplace
On June 30, Tennessee’s governor signed SB 2932 into law as Public Chapter 759. Effective October 1, 2020, the law requires a dealer or marketplace facilitator with no physical presence in the state and $100,000 in total sales in the state in the previous 12 months to register and collect sales and use tax. The…
Tennessee Ruling Clarifies Scope of “Digital Products”
By Jonathan Feldman on
Posted in Digital Economy
Tennessee’s sales tax applies to the sale, lease or licensing of specified digital products. By revenue ruling, the Tennessee Department of Revenue explained that sales tax applies to customized on-hold messaging services, digital signage services, and overhead music services.
Tennessee Court of Appeals Holds Legal Malpractice Settlement Proceeds are Taxable Business Earnings
By Charles Capouet & Scott Wright on
Posted in Noteworthy Cases
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…
Tennessee legislature passes marketplace facilitator legislation
By Jonathan Feldman on
Posted in Marketplace
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 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…