The Tennessee Department of Revenue issued administrative rule 1320-05-01-129(2) in 2016 requiring out of state businesses to register and collect Tennessee sales tax if their sales to Tennessee customers are more than $500,000, regardless of whether they have a physical presence in the state.

According to the Department’s website, “[t]his requirement applies to those dealers that have made sales exceeding $500,000 to Tennessee consumers during the previous 12-month period. These dealers are required to register by March 1, 2017. By registering, dealers affirmatively acknowledge that they will collect and remit sales and use taxes to the Department beginning July 1, 2017.”

If you are not registered with Tennessee, but have sales to customers within Tennessee, review your activities over the past 12 months for the two elements of the new Tennessee nexus test.  Do you…

  • Engage in regular or systematic solicitation of consumers in Tennessee through any means; and
  • Make sales that exceed $500,000 to consumers in Tennessee during the previous 12 months.

The registration, as well as more information about the new requirements, may be found at the Department’s website, here. For more detailed information on this or other State and Local Sales Tax Issues, contact a Barnes Dennig representative.