Shaking things up in state and local tax
Shaking things up in state and local tax
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…
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…
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…
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…
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…
By Christopher Lutz and Jeff Friedman
On December 15, 2016, the Tennessee Joint Government Operations Committee held a hearing regarding the governor’s proposal to establish an economic nexus standard for the state sales tax. Under the proposal, remote sellers would be subject to collection obligations in the state if their Tennessee sales exceed $500,000. The…
Applying the “true object” test to the taxpayer’s web-based services, the Tennessee Department of Revenue ruled that charges for granting access to the taxpayer’s website for purposes of obtaining information would not be subject to sales tax. While the access to web-based services is tax-exempt as a sale of…
By Chris Mehrmann and Charlie Kearns
The Tennessee Department of Revenue has issued guidance explaining that the retail sale of, use of, or subscription to a computer software maintenance contract is subject to sales and use tax when: (1) the maintenance contract is sold as part of a taxable sale of computer software; (2) the…
By Mike Kerman and Andrew Appleby
The Tennessee Supreme Court held that the Tennessee Department of Commerce and Insurance (Department) improperly imposed retaliatory taxes on Pennsylvania-domiciled insurance companies doing business in Tennessee, because Pennsylvania workers’ compensation assessments were not imposed on Tennessee insurance companies, but rather on the insurance companies’ policyholders. Tennessee Code § 56-4-218…
Illinois enacted a direct placement tax on non-admitted insurance in 2014. However, there is a strong movement in Illinois to repeal or narrow the tax. Tennessee has now legislatively expanded its direct placement tax on non-admitted insurance, falling in line with many other states, including Illinois. Previously, Tennessee imposed a direct placement…
