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Tennessee Certificate of Complianceversion 2017.0

Publish Date: August 1, 2017 at 9:45:38 AM

Effective Date: August 1, 2017

Revised Date: July 31, 2017

Approved By: David Gerregano

Title: Commissioner

Submitted By: Sherry Hathaway

Phone: 615-532-6021

As the chief executive of the state’s tax agency, I declare that this Certificate of Compliance is true, correct, and complete to the best of myknowledge and belief.

Changes were made to the following areas of this document (indicated by a "✓"):

_ Answers ✓ Laws or Rules ✓ Comment (Notes)

✓ Effective/Conforming Dates ✓ Certificate’s Revised Date

Section Number of changed items (may include a brief description of the change): Submitting 2017 Re-certification Certificate of Compliance with the following changes:

Revised effective date for additional conforming legislation that was scheduled to take effect July 1, 2017 to July 1, 2019 pursuant to 2017Public Chapter 193.

Added comment to 304040 to explain that Commissioner may instruct not to assess for the first 30 days the statute is in effect. Added site and comment to 317050 for new exemption numbers issued to health/fitness clubs and call centers.

Revised comment to 319010 to explain a taxpayer may now submit a single payment for all its locations when using the consolidated filing inTNTAP.

Each item in this Certificate of Compliance is an administrative practice, process, or definition contained in the Streamlined Sales and UseTax Agreement (SSUTA) as amended through May 11, 2017 and related rules and appendices.

This certificate indicates if the state laws, regulations or administrative practices follow the administrative practice, process, or definition. Anyexception or further explanation is listed in the notes column.

SECTION

TOPIC DOCUMENTCOMMENTS/REFERENCE TO CRICINTERPRETATIONS DESCRIPTION

Is this requirement metby law, regulation oradministrative practice(Yes or No). Enter N/Awhen not applicable.

If so, providethe citationfor legalauthority(statute, case,regulation,etc.)

For SSTconformingchanges,provideeffective dates.

Notes (e.g., administrative practices,noncompliance explanations, etc.)

Section301 State level administration

301010Does the state provide state leveladministration of state and localsales and use taxes?

YesT.C.A. 67-6-401 and 67-6-710(a)(1)

301020Are sellers and purchasers onlyrequired to register with, filereturns and remit funds to a state-level authority?

Yes

T.C.A. 67-6-504, 67-6-601, 67-6-602,and 67-6-608(a)

301030Does the state provide for thecollection of any local taxes anddistribute them to the appropriatetaxing jurisdictions?

YesT.C.A 67-6-401,67-6-710 and

67-6-712

T.C.A. 67-6-103(g) and 67-6-7102007 P.C. 602Secs. 136, 167,168 Eft. datechanged to

7-1-19 by 2017 P.C. 193

301040 Are audits conducted only by thestate or by others authorized bythe state to conduct an audit thatincludes both state and localtaxes?

Yes T.C.A. 67-6-401, 67-6-523, 67-6-710 and

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67-1-102(b)(10)

301050

Are local jurisdictions prohibitedfrom conducting independent salesor use tax audits of sellers andpurchasers except whereauthorized by state law to conductan audit for the state and all localjurisdictions, subject to the sameconfidentiality and otherprotections and the sameadministrative and appealprocedures granted auditsconducted by the state?

YesT.C.A. 67-6-401, 67-6-523 and67-6-710

Section302 State and local tax base

302010

Is the tax base for localjurisdictions identical to the statetax base, excluding federalprohibitions, motor vehicles,aircraft, watercraft, modularhomes, manufactured homes,mobile homes, fuels used to powermotor vehicles, aircraft,locomotives, or watercraft, orelectricity, piped natural or artificialgas or other fuels delivered by theseller?

Yes Eft. 7-1-19

T.C.A. 67-6-207and 67-6-218

Eft. 1-1-082007 P.C. 602Secs. 129, 130,131, 135, 137,138, 142, 143,146, 147, 150,151, 164, 170.

Eft. datechanged to 7-1-19 by 2017 P.C.1932014 P.C. 908amended Sec.129,131,155,157, &160 Eft. 7-1-14

2017 P.C. 193 Changed Eft. Date to 7-1-19 for:Cable TV repeal 67-6-226, 67-6-103(f),67-6-714 & video program. exempt s/u tax67-6-329 & priv tax imposed 67-4-2401(Sec.137,138,147,151,135,170,130);Interstate business telecom repeal local exemption 67-6-702(g)(1)(Sec.146,164); Energy fuels for mfrs exempt s/u tax 67-6-206 & impose priv tax67-4-2303 (Sec. 142, 129); Materials owned by nonprofit collegesexempt s/u tax 67-6-209(b) (Sec. 143)Steam, chilled water from metro countygovt. exempt s/u tax 67-6-322(g) & imposepriv tax 67-4-2304 Sec. 150, 129);

Single article to apply only to motorvehicles, watercraft, aircraft, manuf. &modular homes 67-6-702(c)(Sec. 164)

302020

Does the tax base differ for stateand local jurisdictions for motorvehicles, aircraft, watercraft,modular homes, manufacturedhomes or mobile homes?

Yes

2007 P.C. 602Sec. 164

Eft. datechanged to 7-1-19 by 2017 P.C.193

T.C.A. 67-6-702(c ) amended eft. 7-1-19 such that single article local tax limitation

on the first $1,600 of the sales price oftangible personal property will apply onlyto motor vehicles, watercraft, aircraft,manufactured and modular homes (Sec.164 part (a)(2))

302030Does the tax base differ for stateand local jurisdictions for fuelsused to power motor vehicles,aircraft, locomotives or watercraft?

Yes T.C.A. 67-6-704

T.C.A. 67-6-704 exemption from local taxfor:Aircraft - aviation fuel subject to state rateof 4.5% T.C.A. 67-6-217Watercraft - Dyed diesel fuel subject togeneral state rate of 7% T.C.A. 67-6-202Gasoline is exempt from s/u tax T.C.A. 67-6-329(a)(1)Dyed diesel fuel used to power a means oftransport exempt s/u, subject to diesel taxEft. 7-1-14. T.C.A. 67-6-329(a)(2)Note: 2007 P.C. 602 Sec.131,132,144,151,155,165 may berepealed as a result of the 12-2010amendment to SSUTA Sec. 302. Theseprovisions are scheduled to take effect 7-1-19 and will exempt energy fuels from s/utax and impose certain privilege taxes

302040

Does the tax base differ for stateand local jurisdictions forelectricity, piped natural or artificialgas or other fuels delivered by theseller?

Yes T.C.A. 67-6-704

T.C.A. 67-6-704 exemption from local taxfor:Electricity, piped natural or artifical gas orother fuels delivered by the seller and soldto businesses subject to general state rateof 7% T.C.A. 67-6-202Residental energy exempt from s/u taxT.C.A. 67-6-334Note: 2007 P.C. 602 Sec. 164 may beamended as a result of the 12-2010amendment to SSUTA Sec. 302. Part (a)(1) of Sec. 164 scheduled to take effect 7-1-19 will impose a .5% local tax rate onelectricity, piped natural or artifical gas orother fuels delivered by the seller that aresold to businesses.

Section303 Seller registration

303010Is the state capable of pullingregistration information from thecentral registration system?

Yes T.C.A. 67-6-608

2007 P.C. 602Sec. 117

Eft. 1-1-08

303020Does the state exempt a sellerwithout a legal obligation toregister from paying registrationfees?

Yes No fee charged for registration.

303030Does the state allow a seller toregister on the central registrationsystem without a signature?

Yes

303040Does the state allow an agent toregister a seller on the centralregistration system?

Yes T.C.A. 67-6-608

Section304

Notice for state taxchanges

304010 Failure to meet these doesnot take a state out of

A1. Does the state provide sellerswith as much advance notice as

Yes

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compliance. practicable of a rate change?

304020A2. Does the state limit theeffective date of a rate change tothe first day of a calendar quarter?

No

304030A3. Does the state notify sellers oflegislative changes in the tax baseand amendments to sales and usetax rules and regulations?

Yes

After the legislative session each year thedepartment issues notice regarding statutechanges, posts hot topic and legislativesummaries and other information to theweb site and conducts taxpayer seminarsacross the state to notify taxpayers of lawchanges.

304040

C. Does the state relieve the sellerof liability for failing to collect tax atthe new rate if the state fails toprovide for at least thirty daysbetween the enactment of thestatute providing for a rate changeand the effective date of such ratechange if (1) the seller collectedtax at the immediately precedingeffective rate and (2) the seller'sfailure to collect at the newlyeffective rate does not extendbeyond thirty days after the date ofenactment of the new rate? Note:This liability relief does not apply ifthe state establishes the sellerfraudulently failed to collect tax atthe new rate or solicits purchasersbased on the immediatelypreceding rate.

No

However, the Commissioner maydetermine it is appropirate and instructAudit that no assessment should be madefor the first 30 days a statute is in effectand to remove such sales data for that taxreporting period from audit samples.

Section305

Local rate and boundarychange

305010Does the state have localjurisdictions that levy a sales oruse tax? If yes, answer thefollowing questions.

Yes

305020A. Does the state limit the effectivedate of local rate changes to thefirst day of a calendar quarter aftera minimum of 60 days notice?

Yes Eft. 7-1-19T.C.A. 67-6-706 (a)(3) and67-6-716(1)Eft. 7-1-19

2007 P.C. 602Sec. 166 &172 Eft. datechanged to

7-1-19 by 2017 P.C. 193

305030

B. Does the state limit the effectivedate of local rate changes fromcatalog sales wherein thepurchaser computed the tax basedon local tax rates published in thecatalog only on the first day of acalendar quarter after a minimumof 120 days notice?

Yes Eft. 7-1-19T.C.A. 67-6-716 (2) Eft. 7-1-19

2007 P.C. 602Sec. 166 &172 Eft. datechanged to

7-1-19 by 2017 P.C. 193

305040

C. Does the state limit localboundary changes for thepurposes of sales and use taxes tothe first day of calendar quarterafter a minimum of 60 days notice?

Yes Eft. 7-1-19T.C.A. 67-6-716 (3) Eft. 7-1-19

2007 P.C. 602Sec. 166 &172 Eft. datechanged to

7-1-19 by 2017 P.C. 193

305050D. Does the state provide andmaintain a database with boundarychanges?

Yes T.C.A. 67-6-806

2007 P.C. 602Sec. 124

Eft. 1-1-08Creation of database completed in May2005

305060E. Does the state provide andmaintain a database identifying alljurisdictional rate information usingthe FIPS codes?

Yes T.C.A. 67-6-806

2007 P.C. 602Sec. 124

Eft. 1-1-08

Creation of address & 5 digit zip codedatabase was completed in May 2005 andJanuary 2007 the update with 9 digit codeinformation was completed and alsoavailable in a downloadable format.

305070

F1. Does the state provide andmaintain a database that assignseach five digit and nine digit zipcode within the member state tothe proper tax rate andjurisdiction?

Yes T.C.A. 67-6-806

2007 P.C. 602Sec. 124

Eft. 1-1-08

305080

F2. Does the state apply thelowest combined tax rate imposedin a zip code if the area in that zipcode includes more than one taxrate?

Yes T.C.A. 67-6-806

2007 P.C. 602Sec. 124

Eft. 1-1-08

The data base includes addresses and 5and 9 digit zip codes and does apply thelowest local tax rate where an area isidentified as including more than 1 localtax rate,

305090

G. Does the state provide address-based boundary database recordsfor assigning taxing jurisdictionsand their associated rates? If yes,answer the following questions.

Yes T.C.A. 67-6-806

2007 P.C. 602Sec. 124

Eft. 1-1-08Tennessee's database is also an address-based system.

305100 1. Are the records in the sameformat as database records in F? Yes T.C.A. 67-6-

8062007 P.C. 602Sec. 124

Eft. 1-1-08

3051102. Do the records meet therequirements of the Federal MobileTelecommunications Sourcing Act?

Yes T.C.A. 67-6-806

2007 P.C. 602Sec. 124

Eft. 1-1-08

305120 SSTGB Rule 502

H. If the state has met therequirements of subsection (F) andelected to certify vendor providedaddress-based databases forassigning tax rates and jurisdiction:

No

305130 1. Are those databases in the NA

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same format as the databaserecords approved pursuant to (G)of this section?

3051402. Do those databases meet therequirements of the Federal MobileTelecommunications Sourcing Act(4 U.S.C.A. Sec. 119 (a))?

NA

Section306

Relief from certainliability

306010

Does the state relieve sellers andCSPs from liability to the state andits local jurisdictions for collectingthe incorrect amount of taxbecause of reliance on stateprovided data on rates,boundaries, and jurisdictionassignments?

Yes T.C.A. 67-6-533

2007 P.C. 602Sec. 110

Eft. 1-1-08

Prior to 1-1-08 such relief of liability wasavailable to CSP's and their Model 1Sellers.

Section307

Database requirementsand exceptions

307010A. Does the state provide adatabase per Section 305, indownloadable format?

Yes T.C.A. 67-6-806

2007 P.C. 602Sec. 124

Eft. 1-1-08

307020

If the state designates a vendor toprovide the Section 305 databasedoes the vendor's database meetthe requirements of Sections 305,306 and 307 and is provided at nocost to the user of the database?

NA

Section308 State and local tax rates

308010

A1. Does the state have more thanone state sales and use tax rate onitems of personal property orservices except for fuel used topower motor vehicles, aircraft,locomotives, or watercraft, or toelectricity, piped natural or artificialgas, or other fuels delivered by theseller, or the retail sale or transferof motor vehicles, aircraft,watercraft, modular homes,manufactured homes, or mobilehomes?

Yes until 7-1-19

T.C.A. 67-6-207and 67-6-218

Eft. 1-1-08.2007 P.C. 602Secs. 129, 130,135, 137, 138,142, 145, 146,147, 148, 151,154, 155, 170.

Eft. datechanged to

7-1-19 by 2017 P.C. 193

2014 P.C. 908deleted Sec.129 Eft. 7-1-14

2017 P.C. 193 Changed Eft. Date to 7-1-19 for:Cable TV - exempt s/u 67-6-329 & repeal 67-6-226, 67-6-103(f), 67-6-714(8.25% state rate) & imposed priv tax 67-6-2401 (Sec. 137,138,147,151,135,170,130);

Business interstate telecom svcs - repeal67-6-221 (7.5% state rate) (Sec. 146); Water sold to mfrs - granted s/u exemption& repeal 67-6-206 (1% state rate) &imposed user priv tax on mfrs (Sec.142,129); Energy fuels sold to mfrs - exempt s/u &repeal 67-6-206 (1.5% state rate) &imposed user priv tax on mfrs (Sec.142,129); Satellite TV – exempt s/u 67-6-329 &repeal 67-6-227 (8.25% state rate) &impose priv tax 67-4-2402 (Sec. 137,138,148,151,130);TPP sold to common carriers for export -exempt s/u 67-6-385 & repeal 67-6-219(3.75% state rate) &

308020

A2. Does the state have a singleadditional tax rate on food andfood ingredients and drugs asdefined by state law pursuant tothe Agreement?

Yes Eft. 7-1-19 T.C.A. 67-6-228

Effective 1-1-08 TN adopted amendeddefinition of prepared food. Since 2002TN has applied a reduced state tax rate tofood and food ingredients. Drugs that arenot exempt from tax are subject to thegeneral tax state tax rate. Effective 7-1-19 all other additional stateand local sales and use tax rates will berepealed. TN will have a general sales anduse tax state rate and a single additionalrate on food and food ingredients andeach local jurisdiction will have a singlelocal tax rate. Note: 2007 P.C. 602 Sec. 132, 144, 155part (a) may be repealed as a result of the12-2010 amendment to SSUTA Sec. 302.Aviation fuel is subject to 4.5% state rateand exempt from local tax.

308030

B1. If the state has localjurisdictions with a sales or usetax, does any local jurisdictionhave more than one sales tax rateor one use tax rate?

Yes until 7-1-19

T.C.A. 67-6-702Eft. 7-1-19

2007 P.C. 602Secs. 129, 154,164.

Eft. datechanged to

7-1-19 by 2017 P.C. 193.

2017 P.C. 193 Eft. date changed to 7-17-19 for:Intrastate telecom svcs - repeal 67-6-702(g)(2) (2.5% local rate) (Sec. 164);Residential interstate telecom svcs -repeal 67-6-702(g)(1) (1.5% local rate)(Sec. 164); Water sold to mfrs - exempt s/u 67-6-206& repeal 67-6-702(b) (.5% local rate) &impose user priv tax 67-6-2303 (Secs.129, 142, 164); TPP sold to common carriers for export -exempt s/u 67-6-385 & repeal 67-6-702(e)(1.5% local rate)& impose user priv tax 67-6-2305 (Sec. 129,154,164). Specified digital products - repeal 67-6-702(g)(4)(2.5% local rate (Sec. 164).Note: Eft. 7-1-19 the general local rate ineach jurisdiction will apply to sales ofintrastate telecom, residential interstatetelecom and specified digitial products pur

308040B2. If the state has localjurisdictions with a sales and usetax are the local sales and use taxrates identical?

YesT.C.A. 67-6-203 (a) and

67-6-702(a)(1)

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Section310

General sourcing rules

A. Does the state source a retailsale, excluding lease or rental, of aproduct as follows:

Yes Eft. 7-1-19T.C.A. 67-6-901 and 67-6-902

2007 P.C. 602Sec. 173,174 Eft. datechanged to

7-1-19 by 2017 P.C. 193

310010 CRIC INTERPRETIVEOPINION 2007-2

1. If received at business locationof seller, then sourced to thatlocation?

Yes Eft. 7-1-19T.C.A. 67-6-902(a)(1)

2007 P.C. 602Sec. 174

Eft. datechanged to

7-1-19 by 2017 P.C. 193

3100202. If not received at businesslocation of seller, then sourced tolocation of receipt?

Yes Eft. 7-1-19T.C.A. 67-6-902(a)(2)

2007 P.C. 602Sec. 174

Eft. datechanged to

7-1-19 by 2017 P.C. 193

310030

3. If subsections 1 & 2 do notapply, then sourced to address ofpurchaser in business records ofseller that are maintained inordinary course of seller'sbusiness?

Yes Eft. 7-1-19T.C.A. 67-6-902(a)(3)

2007 P.C. 602Sec. 174

Eft. Datechanged to

7-1-19 by 2017 P.C. 193

310040

4. If subsections 1, 2 & 3 do notapply, then sourced to address ofpurchaser obtained duringconsummation of sale, includingaddress of purchaser's paymentinstrument, if no other address isavailable?

Yes Eft. 7-1-19T.C.A. 67-6-902(a)(4)

2007 P.C. 602Sec. 174

Eft. datechanged to

7-1-19 by 2017 P.C. 193

310050

5. If subsections 1, 2, 3 & 4 do notapply, including the circumstancein which the seller is withoutsufficient information to apply theprevious rules, then sourced tolocation from which tangiblepersonal property was shipped,from which digital good orcomputer software deliveredelectronically was first available fortransmission by seller, or fromwhich service was provided.

Yes Eft. 7-1-19T.C.A. 67-6-902(a)(5)

2007 P.C. 602Sec. 174

Eft. datechanged to

7-1-19 by 2017 P.C. 193

B. Does the state source a leaseor rental of tangible personalproperty as follows:

Yes Eft. 7-1-19 T.C.A. 67-6-902 (b)

2007 P.C. 602Sec. 174

Eft. datechanged to

7-1-19 by 2017 P.C. 193

310060

1. If recurring periodic payments,the first periodic payment issourced the same as a retail sale.Subsequent payments are sourcedto the primary property location foreach period covered by thepayment?

Yes Eft. 7-1-19 T.C.A. 67-6-902 (b)(1)(A)

2007 PC 602Sec. 174

Eft. datechanged to

7-1-19 by 2017 PC 193

3100702. If no recurring periodicpayments, then sourced inaccordance with rules of retailsale?

Yes Eft. 7-1-19 T.C.A. 67-6-902 (b)(1)(B)

2007 P.C. 602Sec. 174

Eft. datechanged to

7-1-19 by 2017 P.C. 193

CRIC INTERPRETIVEOPINION 2006-3

C. Does the state source a leaseor rental of motor vehicles, trailers,semi-trailers, or aircraft that do notqualify as transportation equipmentas follows:

Yes Eft. 7-1-19 T.C.A. 67-6-902 (c)

2007 P.C. 602Sec. 174

Eft. datechanged to

7-1-19 by 2017 P.C. 193

3100801. If recurring periodic payments,then sourced to primary propertylocation?

Yes Eft. 7-1-19 T.C.A. 67-6-902 (c)(1)

2007 P.C. 602Sec. 174

Eft. datechanged to

7-1-19 by 2017 P.C. 193

3100902. If no recurring periodicpayments, then sourced inaccordance with rules of retailsale?

Yes Eft. 7-1-19 T.C.A. 67-6-902 (c)(2)

2007 P.C. 602Sec. 174

Eft. datechanged to

7-1-19 by 2017 P.C. 193

310100

D. Does the state source the retailsale, including lease or rental, oftransportation equipment inaccordance with rules for retailsale?

Yes Eft. 7-1-19 T.C.A. 67-6-902 (d)(1)

2007 P.C. 602Sec. 174

Eft. datechanged to

7-1-19 by 2017 P.C. 193

3101101. Does the state definetransportation equipment pursuantto in Section 310, subsection D?

Yes Eft. 7-1-19 T.C.A. 67-6-902 (d)(2)

2007 P.C. 602Sec. 174

Eft. datechanged to

7-1-19 by 2017 P.C. 193

Section310.1

Election for Origin-Basedsourcing

Effective January 1, 2010

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310500 CRIC INTERPRETIVEOPINION 2010-1

Has the state elected to source theretail sale, excluding lease orrental, of tangible personalproperty and digital goods onwhere the order is received?

No

310510 Does the state comply with all theprovisions of 310.1 B and C? NA

Section311

General sourcingdefinitions

311010 SSTGB RULES 311.1,311.2 and 311.3

For the purposes of Section 310,subsection (A), does the statedefine the terms "receive" and"receipt" to mean: takingpossession of tangible personalproperty, making first use ofservices, or taking possession ormaking first use of digital goods,whichever comes first? Note: Theterms "receive" and "receipt" donot include possession by ashipping company on behalf of thepurchaser.

Yes Eft. 7-1-19 T.C.A. 67-6-902 (e)

2007 P.C. 602Sec. 174

Eft. datechanged to

7-1-19 by 2017P.C. 193

Section313 Direct mail sourcing

313010 SSTGB RULES 313.1

A 2. For advertising andpromotional Direct Mail, does thestate provide that upon receipt of adirect mail form or ExemptionCertificate claiming direct mail, orother written statement approvedby the state, the seller, in theabsence of bad faith, is relieved ofall obligations to collect, pay orremit the tax to which the permitpertains?

Yes Eft. 7-1-19 T.C.A. 67-6-904 (a)(1)

2007 P.C. 602Sec. 174

Eft. datechanged to

7-1-19 by 2017 P.C. 193

Tennessee adopted the original direct mailsourcing provision currently scheduled totake effect 7-1-19 with the balance of otherconforming Streamlined law changes.Tennessee has not adopted the 2009amendments to the direct mail sourcing inSection 313. It is expected legislation willbe introduced such that the direct mailprovisions are amended to incorporate the2009 direct mail amendment prior to the

7-1-19 effective date of T.C.A. 67-6-904 et.seq. Tennessee has posted theStreamlined Certificate of Exemption withthe direct mail reason code grayed out.

313020

A 3. Does the state provide thatupon receipt of jurisdictionalinformation, the seller shall collecttax according to purchaser'ssubmitted information and in theabsence of bad faith, seller isrelieved of further liability?

Yes Eft. 7-1-19 T.C.A. 67-6-904 (a)(2)

2007 P.C. 602Sec. 174

Eft. datechanged to

7-1-19 by 2017 P.C. 193

See comments in A.2. above.

313030

A 4. For advertising andpromotional Direct Mail, does thestate require the seller to collecttax pursuant to Section 310 (A)(5)if the purchaser does not provide adirect pay permit, ExemptionCertificate claiming direct mail, orjurisdictional information?

Yes Eft. 7-1-19 T.C.A. 67-6-904 (b)

2007 P.C. 602Sec. 174

Eft. datechanged to

7-1-19 by 2017 P.C. 193

See comments in A.2. above.

313040

B 1. For other Direct Mail, does thestate require the seller to collecttax pursuant to Section 310 (A)(3)if the purchaser does not provide adirect pay permit or an ExemptionCertificate claiming direct mail?

No

See Comments in A.2 above. Section 310 sourcing is currentlyscheduled to take effect in Tennessee 7-1-19. Billing services and other print-mailservices where the seller is creatingindividualized statements/ bills and mailingto receiptents that are not the purchaserare nontaxable services in Tennessee. The Streamlined Certificate of Exemptionon Tennessee's website has direct mailreason code grayed out.

313050

B 3.For other Direct mail does thestate provide that upon receipt of adirect pay permit, ExemptionCertificate claiming direct mail, orother written statement approvedby the state, the seller, in theabsence of bad faith, is relieved ofall obligations to collect, pay orremit the tax?

Yes Eft. 7-1-19 T.C.A. 67-6-904 (a)(1)

2007 P.C. 602Sec. 174

Eft. datechanged to

7-1-19 by 2017 P.C. 193

See comments in A.2. and B.1.

Section313.1

Origin-based direct mailsourcing

313510 A. Has the state adopted theorigin-based direct mail sourcing? No

Section314 Telecom sourcing rule

314010 SSTGB RULE 314.1

A. Except as required insubsection C below, does the statesource telecommunication servicessold on a call-by-call basis to eachlevel of taxing jurisdiction wherethe call originates and terminatesin that jurisdiction or each level oftaxing jurisdiction where the calleither originates or terminates andin which service address islocated?

Yes T.C.A. 67-6-905 (b)

2004 P.C. 782Sec. 14

Eft. 7-1-04 2007 P.C. 602Sec. 176

Eft. datechanged to

7-1-19 by 2017 P.C. 193

2007 P.C. 602 Sec. 176 replaces with theexact same language effective 7-1-19 inT.C.A. Section 67-6-905(a).

314020 B. Except as required insubsection C below, does the statesource telecommunication serviceto the customer's place of primaryuse if sold on a basis other thancall-by-call basis?

Yes T.C.A. 67-6-905 (c)

2004 P.C. 782Sec. 14

Eft. 7-1-04 2007 P.C. 602Sec. 176

Eft. date

2007 P.C. 602 Sec. 176 replaces with theexact same language effective 7-1-19 inT.C.A. Section 67-6-905(b). 2004 P.C. 782and 2007 P.C. 602 also adopt provisionsfor sourcing ancillary services to

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changed to 7-1-19 by

2017 P.C. 193

customer's place of primary use pursuantto the January 1, 2008 requirement.

314030

C1. Does the state source the saleof mobile telecommunicationservice, other than air-to-groundradiotelephone service andprepaid calling service, tocustomer's place of primary use asrequired under MobileTelecommunications Sourcing Act?

YesT.C.A. 67-6-905(d)(1)

2004 P.C. 782Sec. 14

Eft. 7-1-04 2007 P.C. 602Sec. 176

Eft. datechanged to

7-1-19 by 2017 P.C. 193

2007 P.C. 602 Sec. 176 replaces with theexact same language effective 7-1-19 inT.C.A. Section 67-6-905(c)(1).

314040

C2. Does the state source the saleof post-paid calling service to theorigination point of thetelecommunication signal as firstidentified by either the seller'stelecommunication system orinformation received by the sellerfrom its service provider, wheresystem used to transport signals isnot that of the seller?

YesT.C.A. 67-6-905 (d)(2)

2004 P.C. 782Sec. 14

Eft. 7-1-04 2007 P.C. 602Sec. 176

Eft. datechanged to

7-1-19 by 2017 P.C. 193

2007 P.C. 602 Sec. 176 replaces with theexact same language effective 7-1-19 inT.C.A. Section 67-6-905(c)(2).

314050

C3. Does the state source the saleof prepaid wireless calling serviceand prepaid calling services inaccordance with Section 310 of theAgreement, including the option ofthe location associated with themobile telephone number forprepaid wireless calling service?

Yes Eft. 7-1-19

2004 P.C. 782Sec. 14

Eft. 7-1-04 2007 P.C. 602Sec. 176

Eft. datechanged to

7-1-19 by 2017 P.C. 193

Effective 1-1-08 prepaid calling serviceand prepaid wireless calling servicedefinitions are adopted and excluded fromthe definition tangible personal property. Effective 7-1-19 prepaid calling servicesand prepaid wireless calling services willbe sourced using 310 sourcing. See:T.C.A. 67-6-905(c)(3). From 1-1-08 until 7-1-19 prepaid calling services and prepaidwireless calling services are subject to taxat the time of sale using origin-basedsourcing.

314060

C4a. For the sale of privatecommunication service, does thestate source a separate chargerelated to a customer channeltermination point to each level ofjurisdiction in which such customerchannel termination point islocated?

Yes T.C.A. 67-6-905 (d)(3)(A)

2004 P.C. 782Sec. 14

Eft. 7-1-04 2007 P.C. 602Sec. 176

Eft. datechanged to

7-1-19 by 2017 P.C. 193

2007 P.C. 602 Sec. 176 replaces with theexact same language effective 7-1-19 inT.C.A. 67-6-905(c)(4)(A).

314070

C4b. For the sale of privatecommunication service, does thestate source to the jurisdiction inwhich the customer channeltermination points are locatedwhen all customer terminationpoints are located entirely withinone jurisdiction or levels ofjurisdictions?

Yes T.C.A. 67-6-905 (d)(3)(B)

2004 P.C. 782Sec. 14

Eft. 7-1-04 2007 P.C. 602Sec. 176

Eft. datechanged to

7-1-19 by 2017 P.C. 193

2007 P.C. 602 Sec. 176 replaces with theexact same language effective 7-1-19 inT.C.A. 67-6-905(c)(4)(B).

314080

C4c. For the sale of privatecommunication service, does thestate source fifty percent in eachlevel of jurisdiction in which thecustomer channel terminationpoints are located when service forsegments of a channel betweentwo customer channel terminationpoints located in differentjurisdictions and which segment ofchannel are separately charged ?

Yes T.C.A. 67-6-905 (d)(3)(C)

2004 P.C. 782Sec. 14

Eft. 7-1-04 2007 P.C. 602Sec. 176

Eft. datechanged to

7-1-19 by 2017 PC 193

2007 P.C. 602 Sec. 176 replaces with theexact same language effective 7-1-19 inT.C.A. 67-6-905(c)(4)(B).

314090

C4d. For the sale of privatecommunication service, does thestate source to each jurisdictionbased on the percentagedetermined by dividing the numberof customer channel terminationpoints in such jurisdiction by thetotal number of customer channeltermination points when service forsegments of a channel located inmore than one jurisdiction or levelsof jurisdiction and which segmentsare not separately billed?

Yes T.C.A. 67-6-905 (d)(3)(D)

2004 P.C. 782Sec. 14 Eft. 7-1-04 2007 P.C. 602Sec. 176

Eft. datechanged to

7-1-19 by 2017 P.C. 193

2007 P.C. 602 Sec. 176 replaces with theexact same language effective 7-1-19 inT.C.A. 67-6-905(c)(4)(B).

314100D. Does the state source the saleof Internet access service to thecustomer's place of primary use?

NA NA

2004 P.C. 782Sec. 14

Eft. 7-1-04 2007 P.C. 602Sec. 176

Eft. datechanged to

7-1-19 by 2017 P.C. 193

Retail sale of Internet access is not ataxable service in Tennessee.

314110E. Does the state source the saleof an ancillary service to thecustomer's place of primary use?

Yes T.C.A. 67-6-905 (c)

2004 P.C. 782Sec. 14

Eft. 7-1-04 2007 P.C. 602Sec. 176

Eft. datechanged to

7-1-19 by 2017 P.C. 193

2007 P.C. 602 Sec. 176 provides ancillaryservices are sourced to place of primaryuse effective 7-1-19 in T.C.A. 67-6-905(b).

Section315

Telecom sourcingdefinitions

Does the state define the followingterms in sourcingtelecommunications:

8/13/2018 Tennessee v2017.0

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315010 A. Air-to-ground radiotelephoneservice?

Yes T.C.A. 67-6-905 (a)(1)

2004 P.C. 782Sec. 14

Eft. 7-1-04 2007 P.C. 602Sec. 176

Eft. datechanged to

7-1-19 by 2017 P.C. 193

2007 P.C. 602 Sec. 176 replaces with theexact same language effective 7-1-19 inT.C.A. 67-6-905(d)(1).

315020 B. Ancillary services? YesT.C.A. 67-6-102 (7) and

67-6-905(c)

2004 P.C. 782Sec. 14

Eft. 7-1-04 2007 P.C. 602Sec. 176

Eft. datechanged to

7-1-19 by 2017 P.C. 193

2007 P.C. 602 Sec. 176 replaces with theexact same language effective 7-1-19 inT.C.A. 67-6-905(b).

315030 C. Call-by-call basis? YesT.C.A. 67-6-905(a)(2)

2004 P.C. 782Sec. 14

Eft. 7-1-04 2007 P.C. 602Sec. 176

Eft. datechanged to

7-1-19 by 2017 P.C. 193

2007 P.C. 602 Sec. 176 replaces with theexact same language effective 7-1-19 inT.C.A. 67-6-905(d)(3).

315040 D. Communications channel? Yes T.C.A. 67-6-905 (a)(3)

2004 P.C. 782Sec. 14

Eft. 7-1-04 2007 P.C. 602Sec. 176

Eft. datechanged to

7-1-19 by 2017 P.C. 193

2007 P.C. 602 Sec. 176 replaces with theexact same language effective 7-1-19 inT.C.A. 67-6-905(d)(3).

315050 E. Customer? Yes T.C.A. 67-6-905 (a)(4)

2004 P.C. 782Sec. 14

Eft. 7-1-04 2007 P.C. 602Sec. 176

Eft. datechanged to

7-1-19 by 2017 P.C. 193

2007 P.C. 602 Sec. 176 replaces with theexact same language effective 7-1-19 inT.C.A. 67-6-905(d)(4).

315060 F. Customer channel terminationpoint? Yes

T.C.A. 67-6-905(a)(5)

2004 P.C. 782Sec. 14

Eft. 7-1-04 2007 P.C. 602Sec. 176

Eft. datechanged to

7-1-19 by 2017 P.C. 193

2007 P.C. 602 Sec. 176 replaces with theexact same language effective 7-1-19 inT.C.A. 67-6-905(d)(5).

315070 G. End user? YesT.C.A. 67-6-905(a)(6)

2004 P.C. 782Sec. 14

Eft. 7-1-04 2007 P.C. 602Sec. 176

Eft. datechanged to

7-1-19 by 2017 P.C. 193

2007 P.C. 602 Sec. 176 replaces with theexact same language effective 7-1-19 inT.C.A. 67-6-905(d)(6).

315080 H. Home service provider? YesT.C.A. 67-6-905(a)(7)

2004 P.C. 782Sec. 14

Eft. 7-1-04 2007 P.C. 602Sec. 176

Eft. datechanged to

7-1-19 by 2017 P.C. 193

2007 P.C. 602 Sec. 176 replaces with theexact same language effective 7-1-19 inT.C.A. 67-6-905(d)(7).

315090 I. Mobile telecommunicationsservice? Yes

T.C.A. 67-6-905(a)(8)

2004 P.C. 782Sec. 14

Eft. 7-1-04 2007 P.C. 602Sec. 176

Eft. datechanged to

7-1-19 by2017P.C. 193

2007 P.C. 602 Sec. 176 replaces with theexact same language effective 7-1-19 inT.C.A. 67-6-905(d)(8).

315100 J. Place of primary use? YesT.C.A. 67-6-905(a)(9)

2004 P.C. 782Sec. 14

Eft. 7-1-04 2007 P.C. 602Sec. 176

Eft. datechanged to

7-1-19 by 2017 P.C. 193

2007 P.C. 602 Sec. 176 replaces with theexact same language effective 7-1-19 inT.C.A. 67-6-905(d)(9).

315110 K. Post-paid calling service? YesT.C.A. 67-6-905(a)(10)

2004 P.C. 782Sec. 14

Eft. 7-1-04 2007 P.C. 602Sec. 176Eft. datechanged to

7-1-19 by 2017 P.C. 193

2007 P.C. 602 Sec. 176 amends thedefinition of post-paid calling services tospecify a post-paid calling service includesa telecommunications services, except aprepaid wireless calling service, that wouldbe a prepaid calling service except it is notexclusively a telecommunications serviceeffective 7-1-19 in T.C.A. 67-6-905(d)(10).

315120 L. Prepaid calling service? Yes T.C.A. 67-6-102 (64)

2004 P.C. 782Sec. 14

2007 P.C. 602 Sec. 176 replaces with theexact same language effective 7-1-19 in

8/13/2018 Tennessee v2017.0

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Eft. 7-1-04 2007 P.C. 602Sec. 176

Eft. datechanged to

7-1-19 by 2017 P.C. 193

T.C.A. 67-6-905(d)(11).

315130 M. Prepaid wireless callingservice? Yes T.C.A. 67-6-

102 (65)

2004 P.C. 782Sec. 14

Eft. 7-1-04 2007 P.C. 602Sec. 176

Eft. datechanged to

7-1-19 by 2017 P.C. 193

2007 P.C. 602 Sec. 176 replaces with theexact same language effective 7-1-19 inT.C.A. 67-6-905(d)(12).

315140 N. Private communication service? Yes T.C.A. 67-6-905 (a)(11)

2004 P.C. 782Sec. 14

Eft. 7-1-04 2007 P.C. 602Sec. 176Eft. datechanged to

7-1-19 by 2017 P.C. 193

2007 P.C. 602 Sec. 176 replaces with theexact same language effective 7-1-19 inT.C.A. 67-6-905(d)(13).

315150 O. Service address? Yes T.C.A. 67-6-905 (a)(12)

2004 P.C. 782Sec. 14

Eft. 7-1-04 2007 P.C. 602Sec. 176

Eft. datechanged to

7-1-19 by 2017 P.C. 193

2007 P.C. 602 Sec. 176 replaces with theexact same language effective 7-1-19 inT.C.A. 67-6-905(d)(14).

Section316

Enactment ofExemptions

316010

Product-based exemptions. If thestate exempts a product that isdefined in Part II of the Library ofDefinitions does the state do soconsistent with Part II and Section327?

YesT.C.A. 67-6-207 (a)(14) 67-6-301 thur67-6-392

T.C.A. 67-6-102prod. def.

T.C.A. 67-6-228, 67-6-229,

67-6-230, 67-6-231,

67-6-314, 67-6-320,

67-6-329, 67-6-337

2007 P.C. 602Sec. 61, 68, 83,84, 85, 86, 89,92, 93, 96.Eft.1-1-08T.C.A. 67-6-102and 67-6-2332008 P.C. 1106Sec. 9 Eft. 6-5-08 & Sec. 18-22 Eft. 1-1-09

316020

Product-based exemptions. Canthe state confirm that where theAgreement has a definition for aproduct that the state exempts, thestate does not exempt specificitems included within that productdefinition unless the definition setsout an exclusion for such item.

YesT.C.A. 67-6-207 (a)(14) 67-6-301 thur67-6-392

T.C.A. 67-6-102prod. def.

T.C.A. 67-6-228, 67-6-229,

67-6-230, 67-6-231,

67-6-314, 67-6-320,

67-6-329, 67-6-337

2007 P.C. 602Sec. 61, 68, 83,84, 85, 86, 89,92, 93, 96. Eft.1-1-08 T.C.A.67-6-102 and67-6-233 2008P.C. 1106 Sec.9 Eft. 6-5-08 &Sec. 18-22 Eft. 1-1-09

316030

Entity and Use-based exemptions.If the state has enacted an entityor use-based exemption for aproduct that is defined in Part II ofthe Library of Definitions does thestate do so consistent with Part IIand Section 327?

Yes

T.C.A. 67-6-207 (a)(14),

67-6-319, 67-6-348,

67-6-356, 67-6-389, 67-6-390, 67-6-395

T.C.A. 67-6-207, 67-6-219,

67-6-229, 67-6-329,

67-6-337, 67-6-351,

67-6-389, 67-6-387,

2007 P.C. 602Secs. 79, 82,84, 93, 96, 98,99, 100.

Eft.1-1-08 T.C.A. 67-6-102Ind. Mach. 2008P.C. 1106 Secs.22 Eft. 1-1-09

316040 Use-based exemptions. Can thestate confirm that any use-basedexemption for an item does notconstitute a product-basedexemption for a product defined inthe Agreement that includes suchitem?

Yes T.C.A. 67-6-207 (a)(14),

67-6-319, 67-6-348,

67-6-356, 67-6-389, 67-6-390,

T.C.A. 67-6-207, 67-6-219,

67-6-229, 67-6-329,

67-6-337,

8/13/2018 Tennessee v2017.0

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67-6-395 67-6-351, 67-6-389

67-6-387 2007 P.C. 602Secs. 79, 82,84, 93, 96, 98,99, 100

Eft.1-1-08T.C.A. 67-6-102Ind. Mach. 2008P.C. 1106 Secs.22 Eft. 1-1-09

Section317

Administration ofexemptions

SSTGB RULE 317.1A. Does the state provide for thefollowing in regard to purchasersclaiming exemption:

3170101. Seller shall obtain identifyinginformation from purchaser andreason for claiming exemption?

YesT.C.A. 67-6-409(a)(1)

2007 P.C. 602Sec. 103

Eft. 1-1-08

3170202. Purchaser is not required toprovide signature, unless paperexemption certificate?

YesT.C.A. 67-6-409(a)(2)

2007 P.C. 602Sec. 103

Eft. 1-1-08

3170303. Seller shall use standard formfor claiming exemptionelectronically?

YesT.C.A. 67-6-409(a)(2)

2007 P.C. 602Sec. 103

Eft. 1-1-08

3170404. Seller shall obtain sameinformation for proof regardless ofmedium?

YesT.C.A. 67-6-409(a)(2)

2007 P.C. 602Sec. 103

Eft. 1-1-08

3170505. Does the state issueidentification numbers to exemptpurchasers that must be presentedto sellers?

Yes

T.C.A. 67-6-206, 67-6-207, 67-6-219,67-6-322,

67-6-330, 67-6-356, &

67-6-389

T.C.A. 67-6-206 - industrial machinery;T.C.A. 67-6-207 - farmers, nurserymen,timber harvesters; T.C.A. 67-6-219 -common carriers; T.C.A. 67-6-322 - non-profit entities; T.C.A. 67-6-389 - privatecommunications for headquarters qualifiedentites; T.C.A. 67-6-330(a)(16)health/fitness clubs; T.C.A. 67-6-356 callcenters

3170606. Seller shall maintain records ofexempt transaction and provide tostate when requested?

YesT.C.A. 67-6-409(a)(4)

2007 P.C. 602Sec. 103

Eft. 1-1-08

317070

The Governing Board hasnot defined "does notburden sellers." Theburden is on each state toprove that something otherthan a direct-pay permit orexemption certificatemeets this provision.

7. Does the state administer use-based and entity-basedexemptions when practicablethrough a direct pay permit, anexemption certificate, or anothermeans that does not burdensellers.

Yes T.C.A. 67-6-409

2007 P.C. 602Sec. 103

Eft. 1-1-08

317080 SSTGB RULE 317.2

8. In the case of drop shipmentsales, does the state allow a thirdparty vendor to claim a resaleexemption based on an exemptioncertificate provided by itscustomer/re-seller or any otheracceptable information available tothe third party vendor evidencingqualification for a resaleexemption, regardless of whetherthe customer/re-seller is registeredto collect and remit sales and usetax in the state where the sale issourced?

Yes Eft. 7-1-19T.C.A. 67-6-102(75)(A)

2007 P.C. 602Sec. 134

Eft. datechanged to

7-1-19 by 2017 P.C. 193.

Until 7-1-19 Tenn. Comp R. & Regs. 1320-5-1-.96 provides a Tennessee resalecertificate is required from out-of-statevendors for drop shipments by Tennesseedrop shippers to Tennessee users andconsumers. Effective 7-1-19, 2007 P.C.602 Sec. 134 amends definition of "resale"to include, "Sales of tangible personalproperty or taxable services made by adealer to an out-of-state vendor whodirects that the dealer act as the out-of-state vendor's agent to deliver or shiptangible personal property or taxableservices to the out-of-state vendor'scustomer, who is a user and consumer,are sales for resale".

317090

B. Does the state relieve the sellerfrom any tax if it is determined thatthe purchaser improperly claimedan exemption and hold thepurchaser liable for the tax,assuming the exceptions in thesection?

Yes T.C.A. 67-6-409 (b)(1)

2007 P.C. 602Sec. 103

Eft. 1-1-08

317100

C. Does the state relieve a seller ofthe tax otherwise applicable if theseller obtains a fully completedexemption certificate or capturesthe relevant data elementsrequired under the Agreementwithin 90 days subsequent to thedate of sale?

Yes T.C.A. 67-6-409 (b)(1)

Tennessee has not yet adopted legislationdefining the time period for "time of sale"as within 90 days of the sale.The Department currently interprets "at thetime of purchase" to mean that sellersmust obtain a fully completed cetificate orthe identifying information in electronicformat within 90 days subsequent to thetime of purchase. Absent fraud or illegalsolicitation, when the seller obtains a fullycompleted certifiate at the time of sale orwithin 90 days subsequent to the time ofsale, the seller is not liable for sales if it isdetermined the purchaser improperlyclaimed an exemption.

317110 CRIC INTERPRETIVEOPINION 2011-3

D.1. Does the state provide theseller with 120 days subsequent toa request for substantiation by astate, if the seller has not obtainedan exemption certificate asprovided in C, to obtain anexemption certificate or otherinformation establishing thetransaction was not subject to tax?

Yes T.C.A. 67-1-1501 (b)

Tennessee has not yet adopted legislationfor the 90-day period for obtainingexemption certificates at the "time of saleor purchase" or the subsequent 120-dayperiod for sellers under audit that failed toobtain exemption certificates within the 90-day period to substantiate exemption fornon-taxed sales. An audited seller may,within the statute of limitations for suchaudit, substantiate an exemption fornontaxed sales.

8/13/2018 Tennessee v2017.0

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317120

D.2. Subsequent to the 90-dayperiod provided in C, does thestate relieve a seller of the tax forexemption certificates taken ingood faith or other informationestablishing the transaction wasnot subject to tax that are obtainedby the seller as provided in D.1.?

Yes

Tennessee has not yet adopted legislationdefining the good faith standard and itsapplication to exemption documentationobtained after the 90-day period.Currently, when a fully completedcertificate or electronic identifyinginformation is obtained by the seller afterthe 90 days following the date of the sale,the seller is liable for tax unless thecertificate or electronic identifyinginformation was taken in good faith.

317130G. Does the state post theStreamlined Exemption Certificateon its website?

Yes

317140

The answer to thisquestion does not impactcertification, but it wouldprovide useful informationto taxpayers.

2. Does the state requirepurchasers to update exemptioncertificate information or to reapplywith the state to claim certainexemption?

No, except in the case ofTN Sales and Use TaxAgriculturalExemption Certificateandnonprofit exemptioncertificates

T.C.A. 67-6-409(b)(1)

2007 P.C. 602Sec. 103

Eft. 1-1-08

T.C.A. 67-6-207(b) farmers, nurserymenand timber harvesters must qualify for andreceive a new certificate every 4 years.

In addition, nonprofit exemptioncertificates are reviewed and reissuedevery 4 years that includes a currenteffective date.

317150

3. Does the state relieve a seller oftax if the seller obtains a blanketexemption certificate for apurchaser with which the seller hasa recurring business relationship?

YesT.C.A. 67-6-409(b)(1)

2007 P.C. 602Sec. 103

Eft. 1-1-08

Section318 Uniform tax returns

318010A. Does the state require the filingof only one tax return for eachtaxing period for each seller for thestate and all local jurisdictions?

Yes Eft. 7-1-19 T.C.A. 67-6-504 (a)

2007 P.C. 602Sec. 158

Eft. datechanged to

7-1-19 by 2017 P.C. 193

318020

B.1. Does the state require thatreturns be filed no sooner than thetwentieth day of the monthfollowing the month in which thetransaction occurred?

YesT.C.A. 67-6-504 (a) and

67-6-536(d)

2007 P.C. 602Sec. 113

Eft. 1-1-08

318030

B.2. Does the state provide whenthe due date for a return falls on aSaturday or Sunday or legalholiday, the return shall be due thenext succeeding business day.

Yes T.C.A. 4-1-402

318040C.1. Does the state accept theSER approved by the governingboard?

Yes -See Comments

T.C.A. 67-6-504 (a) and

67-6-536(a)

2007 P.C. 602Sec. 113

Eft. 1-1-082007 P.C. 602Sec. 161

Eft. datechanged to

7-1-19 by 2017 P.C. 193

Currently T.C.A. 67-6-536(a) providesModel 1 & 2 sellers with no locations inTennessee may file using the SER format. In addition, under the commissioner'sauthority in T.C.A. 67-6-504(a) and 67-6-601 et. seq. any volunteer seller that doesnot have a location in Tennessee may usethe Streamlined SER for filing returns inTennessee. Effective 7-1-19 2007 P.C.602 Sec. 161 provides Model 1 & 2 sellerswith locations in Tennessee may startusing the Streamlined SER.

318050

C 2. Does the state require thesubmission of exemptioninformation on part 2 of the SER,excluding Model 4 sellers without alegal requirement to register?

Yes T.C.A. 67-6-504 (a)

Tennessee has notified the GoverningBoard of the requirement of exemptioninformation on part 2 of the SER.

318060

C.3. Does the state allow Model 1,Model 2, and Model 3 sellers tosubmit its sales and use taxreturns in a simplified format thatdoes not include more data fieldsthan permitted by the governingboard?

Yes Eft. 7-1-19T.C.A. 67-6-504 (a) and

67-6-536(a)

2007 P.C. 602Sec. 113

Eft. 1-1-082007 P.C. 602Sec. 161

Eft. datechanged to

7-1-19 by 2017 P.C. 193

Currently T.C.A. 67-6-536(a) providesModel 1 & 2 sellers with no locations inTennessee may file using the SER format. In addition, under the commissioner'sauthority in T.C.A. 67-6-504(a) and 67-6-601 et. seq. any volunteer seller that doesnot have a location in Tennessee may usethe Streamlined SER for filing returns in Tennessee. Effective 7-1-19 2007 P.C. 602 Sec. 161provides Model 1 & 2 sellers with locationsin Tennessee may start using theStreamlined SER.

318070 C 3.c. Does the state allow amodel 4 seller to file an SER?

Yes - See Comments

T.C.A. 67-6-504 (a) and

67-6- 536(a)

2007 P.C. 602Sec. 113

Eft. 1-1-082007 P.C. 602Sec. 161

Eft. datechanged to

7-1-19 by 2017 P.C. 193

Under the commissioner's authority inT.C.A. 67-6-504(a) and 67-6-601 et. seq.any volunteer seller registered through theStreamlined Central Registration Systemthat does not have a location in Tennesseemay use the Streamlined SER for filingreturns in Tennessee. Effective 7-1-19sellers with locations in this state will beafforded the option of filing an SER inconjunction with the allowance for Model 1& 2 with locations in Tennessee to fileusing the SER.

318080 Effective 1-1-2013C.3.d. Does the state allow sellersnot registered under theAgreement to file an SER?

Yes Eft. 7-1-19T.C.A. 67-6-504 (a) and

67-6-536(a)

2007 P.C. 602Sec. 113

Eft. 1-1-082007 P.C. 602Sec. 161

Eft. datechanged to

7-1-19 by 2017 P.C. 193

See Comments Above in C.3.c.

318090 D. Does the state require the filingof a return from a seller who

No T.C.A. 67-6-504 (a)

Tennessee is an associate member state.Sellers who do not make sales into

8/13/2018 Tennessee v2017.0

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registers under the Agreement andindicates that it anticipates makingno sales that would be sourced tothat state?

Tennessee would not select Tennessee inthe Central Registration System forpurposes of registering in our state. However, sellers that do select Tennesseeand do not have a location in Tennessee,are placed in a non-filing status until suchtime as the seller files its first return atwhich time an appropriate filing frequencyis determined for the seller.

318100

F. Does the state give notice to aseller registered under theAgreement, that has no legalrequirement to register in a state,who failed to file a return, aminimum 30 days notice prior toestablishing a liability amount fortaxes based solely on the seller'sfailure to timely file?

Yes

A minimum of 30 days is given on all salesand use taxpayer accounts prior to thecreation of an estimated liability andmailing of a delinquency notice for failureto timely file.

Section319

Uniform rules forremittance of funds

319010A1. Does the state require morethan one remittance for eachreturn?

No T.C.A. 67-6-504

2007 P.C. 602Sec. 106

Eft. 1-1-08 2007 P.C. 602Sec. 158

Eft. 7-1-19amends T.C.A.67-6-504(a)

Tennessee requires taxpayers' submit aconsolidated return filing that includesseparate return information for eachlocation. A Taxpayer filing electronically inthe new Departmental website TNTAPmay make a single payment for theconsolidated filing that includes the returnfilling for each location. Taxpayers filingpaper returns may submitt one checkremitting tax for multiple returns.

319020

A2. If the state requires more thanone remittance for each returndoes it do so only if: (1) sellercollects more than $30,000 insales and use taxes in state duringpreceding year, (2) any additionalremittance to be determinedthrough a calculation method, and(3) the seller is not required to fileadditional return?

NA2007 P.C. 602Sec. 106

Eft. 1-1-08

319030C. Does the state allow payment tobe made by both ACH Credit &ACH Debit?

Yes T.C.A. 67-6-536 (c)

2007 P.C. 602Sec. 106

Eft. 1-1-08

319040

D. Does the state provide analternative method for "same day"payment if electronic fund transferfails (electronic check or FedWire)?

Yes T.C.A. 67-6-536 (c)

2007 P.C. 602Sec. 106

Eft. 1-1-08

319050

E 1. Does the state provide that ifa due date falls on a Saturday,Sunday or a legal holiday in thestate, the taxes are due on thenext succeeding business day?

Yes T.C.A. 4-1-402Tennessee also does this administrativelyunder the statutory powers granted thecommissioner to administer theassessment and collection.

319060

E 2. Does the state provide that ifa due date falls on a day theFederal Reserve Bank is closed,the taxes are due on the next daythe Federal Reserve Bank isopen?

Yes T.C.A. 4-1-402Tennessee also does this administrativelyunder the statutory powers granted thecommissioner to administer theassessment and collection.

319070

F. Does the state require that anydata that accompanies aremittance to be formatted usinguniform tax type and payment typecodes?

Yes T.C.A. 67-6-403

Tennessee commissioner has broadauthority to adopt forms in current law.

Section320

Uniform rules forrecovery of bad debts

320010A. Does the state allow a seller totake a deduction from taxablesales for bad debts?

YesT.C.A. 67-6-507 (e)(1)(2) &(3)

2007 P.C. 602Sec. 107

Eft. 1-1-08

320020

B. Does the state use the definitionof bad debt found in 26 U.S.C.Sec. 166 as basis for calculating abad debt recovery, excluding:financing charges or interest; salesor use taxes charged on purchaseprice; uncollectible amounts onproperty that remains inpossession of seller until full pricepaid; expenses incurred in attemptto collect debt, and repossessedproperty?

YesT.C.A. 67-6-507(e)(2)

2007 P.C. 602Sec. 107

Eft. 1-1-08

320030

C1. Does the state allow bad debtsto be deducted on the return forthe period during which the baddebt is written off as uncollectibleon and is eligible be deducted forfederal income tax purposes?

YesT.C.A. 67-6-507(e)(3)

2007 P.C. 602Sec. 107

Eft. 1-1-08

320040 C2. If the seller is not required tofile a federal income tax returndoes the state allow bad debts tobe deducted on the return for theperiod during which the bad debt iswritten off as uncollectible on andwould be eligible be deducted forfederal income tax purposes if theseller was required to file a federalreturn?

Yes T.C.A. 67-6-507(e)(3)

2007 P.C. 602Sec. 107

Eft. 1-1-08

8/13/2018 Tennessee v2017.0

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320050

D. Does the state require that, if adeduction is taken for a bad debtand the debt is subsequentlycollected in whole or in part, thetax on the amount so collectedmust be paid and reported on thereturn files for the period in whichthe collection is made?

YesT.C.A. 67-6-507(e)(4)

2007 P.C. 602Sec. 107

Eft. 1-1-08

320060

E. Does the state provide that,when the amount of a bad debtexceeds taxable sales for periodwhen written off, a refund claimmay be filed within the applicablestatute of limitations (measuredfrom due date of return on whichbad debt could first be claimed)?

YesT.C.A. 67-6-507(e)(5)

2007 P.C. 602Sec. 107

Eft. 1-1-08

320070

F. Does the state provide that iffiling responsibilities are assumedby a CSP, the state allows the CSPto claim, on behalf of the seller,any bad debt allowance?

YesT.C.A. 67-1-1802 (d) and

67-6-507(e)(6)

2007 P.C. 602Sec. 107

Eft. 1-1-08

320080

G. Does the state provide that, forpurposes of reporting payment onpreviously claimed bad debt, anypayments made are applied firstproportionately to taxable price ofproperty or service and sales taxthereon, and secondly to interest,service charges, and any othercharges?

YesT.C.A. 67-6-507(e)(7)

2007 P.C. 602Sec. 107

Eft. 1-1-08

320090H. Does the state permit allocationof a bad debt among states if thebooks and records of a the partysupport allocation among states?

YesT.C.A. 67-6-507(e)(8)

2007 P.C. 602Sec. 107

Eft. 1-1-08

Section321

Confidentiality andprivacy protectionsunder Model 1

321010

E. Does the state provide publicnotification to consumers, includingexempt purchasers, of state'spractices relating to collection, useand retention of personallyidentifiable information?

YesT.C.A. 67-1-1701 et seq.and

67-1-110 (c)(6)

2007 P.C. 602Sec. 54

Eft. 1-1-08

Tennessee publishes on its website list ofconfidentiality and privacy rights andprotections under Tennessee law.

321020

F. Does the state provide thatwhen any personally identifiableinformation is no longer requiredfor purposes in Section 321subsection (D)(4), such informationshall no longer be retained bystate?

Yes T.C.A. 67-1-1701 et seq.

321030

G. Does the state provide thatwhen personally identifiableinformation regarding an individualis retained by or on behalf of state,the state shall provide reasonableaccess to information by suchindividual and a right to correctinaccurate information?

Yes T.C.A. 67-1-1701 et seq.

321040

H. Does the state provide that ifanyone other than a member stateor person authorized by state lawor the Agreement seeks todiscover personally identifiableinformation, state makesreasonable and timely effort tonotify the individual of the request?

No T.C.A. 67-1-1701 et seq.

State law does not authorize release ofpersonally identifiable information underbroad confidentiality protections andprovides severe penalties in case of aviolation. Nothing in Tennessee lawprevents the department from notifying anindividual that another person discoveredor attempted to discover personallyidentifiable information about the individualthat was in violation of Tennesseestatutes.

321050I. Is the state's privacy policysubject to enforcement by state'sAG or other appropriategovernment authority?

Yes T.C.A. 8-6-301 Confidentiality provisions are enforced bystate's attorney general.

Section322 Sales tax holidays

322010 A. Does the state have sales taxholidays? Yes T.C.A. 67-6-

393Tennessee sales tax holiday for 2017 isthe last Friday, July 28, through Sunday,July 30.

322020

1. If a state has a holiday, does thestate limit the holiday exemption toitems that are specifically definedin Part II or Part III(B) of the Libraryof Definitions and apply theexemptions uniformly to state andlocal sales and use taxes?

Yes

T.C.A. 67-6-393 &definitions in T.C.A. 67-6-102

Applies to clothing ($100 or less per item),school supplies ($100 or less per item),and computers ($1,500 or less per item)and in August 2007 school art supplies($100 or less per item) was added.

322030

2. If a state has a holiday, does thestate provide notice of the holidayat least 60 days prior to first day ofcalendar quarter in which theholiday will begin?

Yes T.C.A. 67-6-393

3220403. If a state has a holiday, does thestate apply an entity or use basedexemption to items?

NoT.C.A. 67-6-393(b)(7)

8/13/2018 Tennessee v2017.0

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322050 3. If a state has a holiday, does thestate limit a product basedexemption to items purchased forpersonal or non-business use?

Yes T.C.A. 67-6-393(b)(7)

Tennessee sales tax holiday items arelimited to non-business use.

322060

4. If a state has a holiday, does thestate require a seller to obtain anexemption certificate or othercertification from a purchaser foritems to be exempted during asales tax holiday?

No

322070B1. If a state's holiday includes aprice threshold, does the stateprovide that the threshold includesonly items priced below threshold?

YesT.C.A. 67-6-393(a)(1-4)

Applies to clothing ($100 or less per item),school supplies ($100 or less per item),and computers ($1,500 or less per item)and in August 2007 school art supplies($100 or less per item) was added.

322080

B2. If a state's holiday includes aprice threshold, does the stateexempt only a portion of the priceof an individual item duringholiday?

NoT.C.A. 67-6-393(a)(1-4)

322090C. Does the state meet each of theprocedural requirements forholidays?

Yes

322100 1. Layaway sales? YesT.C.A. 67-6-393(d)(1)

322110 2. Bundled sales? Yes Eft. 7-1-19 T.C.A. 67-6-539

2007 P.C. 602Sec. 133,162 Eft. datechanged to

7-1-19 by 2017 P.C. 193

Effective 7-1-19 Tennessee has adoptedthe definition of a bundled transaction andprovisions for tax treatment of a bundledtransaction. From 1-1-08 until 7-1-19 provisions of the sales pricedefinition apply for exempt personalproperty bundled with taxable personalproperty. Legislation to repeal sales pricebundling provision (T.C.A. 67-6-102(79)(A)(vi) is needed by effective date of bundledtransaction language 7-1-19.

322120 3. Coupons and discounts? YesT.C.A. 67-6-393(d)(2)

322130 4. Splitting of items normally soldtogether? Yes

T.C.A. 67-6-393(d)(3)

322140 5. Rain checks? YesT.C.A. 67-6-393(d)(4)

322150 6. Exchanges? YesT.C.A. 67-6-393(d)(5)

322160 7. Delivery charges? YesT.C.A. 67-6-393(d)(6)

322170 8. Order date and back orders? YesT.C.A. 67-6-393(d)(7)

322180 9. Returns? YesT.C.A. 67-6-393(d)(8)

322190 10. Different time zones? YesT.C.A. 67-6-393(d)(9)

Section323 Caps and thresholds

3230101. Does the state have any caps orthresholds on the application ofrates or exemptions based on thevalue of a transaction or item?

Yes until 7-1-19

2007 P.C. 602Secs. 58, 59,93. Eft. 1-1-08

2008 P.C. 1106Sec. 2 Eft. 7-1-08 2007 P.C. 602Secs. 130, 135,151, 170, 164

Eft. datechanged to

7-01-19 by 2017 P.C. 193

2017 P.C. 193 eft. date changed to 7-17-19 for:Cable TV thresholds repealed, granted s/utax exemption and imposed priv. tax T.C.A.67-4-2401. (Secs.130,135,151,170)Additional state tax on single articles of tpprepealed except on motor vehicles, aircraft, watercraft, manuf. and modualrhomes sold unafixed to real property.(Sec. 164)Local tax limitation on singles articles oftpp applies only to motor vehicles, aircraft,watercraft, manuf. and modular homessold unafixed to real property as a result ofamendment to the definition of singlearticle. (Sec. 164)

323020

2. Does the state have any capsthat are based on application ofrates unless the application ofrates are administered in a mannerthat places no additional burden onretailer?

NA Tennessee sales and use tax statutes dono contain caps on overall tax rates.

323030 B. Do local jurisdictions within thestate that levy sales or use taxhave caps or thresholds onapplication of rates or exemptionsthat are based on value oftransaction or item?

Yes until 7-1-19

T.C.A. 67-6-702 (a) & (b)

See # 1 Above Eft. Datechanged to

7-1-19 by 2017 P.C. 193

8/13/2018 Tennessee v2017.0

15/23

323040D. Does the state have cap orthreshold on the value of essentialclothing?

No

Section324 Rounding rule

3240101. Does the state provide that thetax computation must be carried tothe third decimal place?

Yes T.C.A. 67-6-504 (h)

2007 P.C. 602Sec. 106

Eft. 1-1-08

324020

2. Does the state provide that thetax must be rounded to a wholecent using a method that roundsup to next cent whenever thirddecimal place is greater than fourafter?

Yes T.C.A. 67-6-504 (h)

2007 P.C. 602Sec. 106

Eft. 1-1-08

324030

B.1. Does the state allow sellers toelect to compute tax due on atransaction, on a item or invoicebasis, and shall allow rounding ruleto be applied to aggregated stateand local taxes?

Yes T.C.A. 67-6-504 (h) & (i)

2007 P.C. 602Sec. 106

Eft. 1-1-08

324040B.2. Can the state confirm that ithas repealed any requirements forsellers to collect tax on bracketsystem?

Yes T.C.A. 67-6-504 (i)

2007 P.C. 602Sec. 106

Eft. 1-1-08

Section325

Customer refundprocedures

325010

C. Does the state provide that acause of action against seller doesnot accrue until the purchaser hasprovided written notice to the sellerand the seller has had 60 days torespond? Notice must containinformation necessary todetermine validity of request.

Yes T.C.A. 67-6-538 (d)

2007 P.C. 602Sec. 115

Eft. 1-1-08

325020

D. Does the state provide foruniform language in regard topresumption of a reasonablebusiness practice when a seller: I)uses either a provider or a system,including a proprietary system, thatis certified by the state; and ii) hasremitted to state all taxescollected, less deductions, creditsor collection allowances?

Yes T.C.A. 67-6-538 (e)

2007 P.C. 602Sec. 115

Eft. 1-1-08

Section326 Direct pay permits

326010

Does the state provide for a directpay authority that allows the holderof a direct pay permit to purchaseotherwise taxable goods andservices without payment of tax tothe supplier at the time ofpurchase?

Yes

Tenn. Comp.R. & Regs.1320-05-01-.68(4) and

T.C.A. 67-6-102 (31-32)

Section327 Library of definitions

327010

A. If term defined in Libraryappears in state's statutes, rules orregulations, has the state adoptedthe definition in substantially thesame language as the Librarydefinition?

Yes Eft. 1-1-08 except for bundled

transaction which iseffective 7-1-19

T.C.A. 67-6-102 et seq.and

67-6-905(a)(1-12)

2007 P.C. 602Secs. 60, 61,62, 64, 65, 66,68 fordefinitions and

Secs. 71, 74,79, 80, 83-86,89, 92, 93, 95,96, 98, 99 &100 for use ofdefinitions. Eft. 1-1-08. 2008 P.C. 1106Sec. 9

Eft. 6-05-08& Sec.18

Eft.1-1-092007 P.C. 602Sec. 133

Eft. datechanged to

7-1-19 by 2017 P.C. 193

2007 P.C. 602 Secs. 133 & 162 Eft. 7-1-19 for definition of bundled transaction and

tax treatment of bundled transaction.Legislation to repeal sales price bundlingprovision (T.C.A. 67-6-102(79)(A)(vi) isneeded by effective date of bundledtransaction language 7-1-19.

327020 B. Can the state confirm that itdoes not use a Library definitionthat is contrary to meaning ofLibrary definition?

Yes Eft. 1-1-08 except for bundled

transaction which s effective 7-1-19

T.C.A. 67-6-102 et seq.and

67-6-905(a)(1-12)

2007 P.C. 602Secs. 60, 61,62, 64, 65, 66,68 fordefinitions and

Secs. 71, 74,79, 80, 83-86,89, 92, 93, 95,96, 98, 99 &100 for use ofdefinitions. Eft. 1-1-08

2008 P.C. 1106Sec. 9

Eft. 6-05-08& Sec.18

Eft.1-1-092007 P.C. 602Sec. 133

2007 P.C. 602 Secs. 133 & 162 Eft. 7-1-19 for definition of bundled transaction and

tax treatment of bundled transaction.Legislation to repeal sales price bundlingprovision (T.C.A. 67-6-102(79)(A)(vi) isneeded by effective date of bundledtransaction language 7-1-19.

8/13/2018 Tennessee v2017.0

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Eft. datechanged to

7-1-19 by 2017 P.C. 193

327030

SSTGB RULES 327.1,APPENDIX L and M(Health Care Lists) andAPPENDIX N (CandyProducts) and CRICINTERPRETIVE OPINION2006-5

C. Except as provided in Sections316 and 332 and Library, can thestate confirm that it imposes tax onall products and services includedwithin each Part II or Part III(B)definition or exempt from tax allproducts or services within eachdefinition?

Yes2007 P.C. 602Sec. 68, 83, 89,92, 93 Eft. 1-1-08

Section328 Taxability matrix

328010

A1. Has the state completed theLibrary of Definitions portion of thetaxability matrix in thedownloadable format approved byGoverning Board?

Yes

328020

A2. Has the state completed theTax AdministrationPractices portion of the taxabilitymatrix in the downloadable formatapproved by the Governing Board?

Yes

328030B. Does the state provide notice ofchanges in the taxability matrix asrequired by the Governing Board?

Yes

Tennessee has posted each taxabilitymatrix completed to its web site. Tennessee sends notices to taxpayersand post such notices and other taxinformation to the web site regardingchanges

328040

C.Does the state relieve sellersand CSPs from liability to the stateand its local jurisdictions for havingcharged and collected incorrect taxresulting from erroneous data inthe Library of Definitions section ofthe taxability matrix?

Yes T.C.A. 67-6-537 (d)

2007 P.C. 602Sec. 114

Eft. 1-1-08

328060

E. If the state taxes specifieddigital products, has the statenoted such in the Library ofDefinitions section of the taxabilitymatrix?

Yes

328070

F. If the state has a sales taxholiday, has the state noted theexemption in the Library ofDefinitions section of the taxabilitymatrix?

Yes

Section329

Effective date for ratechanges

Does the state provide that theeffective date of rate changes forservices covering a period startingbefore or ending after the statutoryeffective date is as follows:

Yes

Tennessee does this administatively underthe statutory powers granted thecommissioner to administer theassessment and collection of taxes, andwill publish policy to this effect

3290101. For a rate increase, the new rateshall apply to the first billing periodstarting on or after the effectivedate?

Yes

3290202. For a rate decrease, new rateshall apply to bills rendered on orafter the effective date?

Yes

Section330 Bundled Transactions

330010 SSTGB RULES 330.1 and330.2

A. Has the state adopted and doesthe state utilize the core definitionof "bundled transaction" todetermine tax treatment?

Yes Eft. 7-1-19T.C.A. 67-6-102 Eft. 7-1-19

2007 P.C. 602Secs. 133,162

Eft. datechanged to

7-1-19 by 2017 P.C. 193

C. Can the state confirm that forbundled transactions that includetelecommunication service,ancillary service, internet access,or audio or video programmingservice the following rules apply:

330020

1.For transactions that includeboth taxable and nontaxable items,the price attributable to nontaxableitems is exempt if the provider canidentify the price by reasonableand verifiable standards from itsbooks and records.

YesT.C.A. 67-6-539(b)(1)

2004 P.C. 782Sec. 12

Eft. 7-1-042007 P.C. 602Sec. 162

Eft. datechanged to

7-1-19 by 2017 P.C. 193

2007 P.C. 602 Sec. 162 rewrites thelanguage T.C.A. 67-6-539 in conjunctionwith the effective date of the bundledtransaction definition 7-1-19.

330030 2. For transactions that includeproducts subject to different taxrates, the total price may betreated as attributable to theproducts subject to tax at thehighest tax rate unless the providercan identify by reasonable andverifiable standards the portion ofthe price attributable to the

Yes T.C.A. 67-6-539(b)(2)

2004 P.C. 782Sec. 12

Eft. 7-1-042007 P.C. 602Sec. 162

Eft. datechanged to

7-1-19 by 2017 P.C. 193

2007 P.C. 602 Sec. 162 rewrites thelanguage T.C.A. 67-6-539 in conjunctionwith the effective date of the bundledtransaction definition 7-1-19.

8/13/2018 Tennessee v2017.0

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products subject to tax at the lowerrate from its books and recordsthat are kept in the regular courseof business for other purposes,including, but not limited to, non-tax purposes?

330040 SSTGB RULE 330.3

D. If the state otherwise has notspecifically imposed tax on theretail sales of computer softwaremaintenance contracts, does thestate treat software maintenancecontracts as provided in thissection?

YesT.C.A. 67-6-102 (19) and67-6-231(b)

2009 P.C. 530Secs. 50-52

Eft. 7-1-09

Tennessee specifically imposes tax onsales and use of computer softwaremaintenance contracts.

Section331

Relief from certainliability for purchasers

A. Does the state provide relief forpurchasers from liability for penaltyto that state and its localjurisdictions for having failed to paythe correct amount of sales or usetax in the following circumstances:

331010

1. A purchaser's seller or CSPrelied on erroneous data providedby the state on tax rates,boundaries, taxing jurisdictionassignments, or in the taxabilitymatrix completed by the statepursuant to Section 328?

Yes

T.C.A. 67-6-533(a)(c)and 67-6-537(d)

2007 P.C. 602Sec. 114

Eft. 1-1-08

331020

2. A purchaser holding a direct paypermit relied on erroneous dataprovided by the state on tax rates,boundaries, taxing jurisdictionassignments, or in the taxabilitymatrix completed by the statepursuant to Section 328?

Yes

T.C.A. 67-6-533(a)(c)and 67-6-537(d)

2007 P.C. 602Sec. 114

Eft. 1-1-08

3310303. A purchaser relied on erroneousdata provided by the state in thetaxability matrix completed by thestate pursuant to Section 328?

Yes T.C.A. 67-6-537 (d)

2007 P.C. 602Sec. 114

Eft. 1-1-08

331040

4. A purchaser using databasespursuant to subsections (F), (G),and (H) of Section 305 relied onerroneous data provided by thestate on tax rates, boundaries, ortaxing jurisdiction assignments?

Yes T.C.A. 67-6-533

2007 P.C. 602Sec. 114

Eft. 1-1-08

331050

B. (Except where prohibited by amember state's constitution) Doesthe state relieve a purchaser fromliability for tax and interest to thestate and its local jurisdictions forhaving failed to pay the correctamount of sales or use tax in thecircumstances described inSection 331 A, provided that, withrespect to reliance on the taxabilitymatrix completed by the statepursuant to Section 328, suchrelief is limited to the state'serroneous classification in thetaxability matrix of terms includedin the Library of Definitions as"taxable" or "exempt", "included insales price" or "excluded fromsales price" or "included in thedefinition" or "excluded from thedefinition".

Yes T.C.A. 67-6-537 (d)

2007 P.C. 602Sec. 114

Eft. 1-1-08

Section332

Specified DigitalProducts

332010 SSTGB RULES 332.1 and332.2

A. Does the state include specifieddigital products, digital audio-visualworks, digital audio works, ordigital books in its definition ofancillary services, computersoftware, telecommunicationservices or tangible personalproperty?

No T.C.A. 67-6-233

2008 P.C. 1106Secs. 18 & 19Eft. 1-1-09

332020

D1. Is the state's tax on specifieddigital products, digital audio-visualworks, digital audio works, ordigital books construed to applyonly to the end user unlessspecifically imposed on someoneother than the end user?

Yes T.C.A. 67-6-233 (f)

2008 P.C. 1106Secs. 18 & 19Eft. 1-1-09

332030

D2. Is the state's tax on specifieddigital products, digital audio-visualworks, digital audio works, ordigital books construed to applyonly on a sale with the right ofpermanent use unless specificallyimposed on a sale with less thanpermanent use?

YesT.C.A. 67-6-233(b)(1)

2008 P.C. 1106Secs. 18 & 19Eft. 1-1-09

332040 D3. Is the state's tax on specifieddigital products, digital audio-visualworks, digital audio works, ordigital books construed to applyonly on a sale which is notconditioned upon continuedpayment from the purchaser

Yes T.C.A. 67-6-233(b)(2)

2008 P.C. 1106Secs. 18 & 19Eft. 1-1-09

8/13/2018 Tennessee v2017.0

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unless specifically imposed on asale which is conditioned uponcontinued payment from thepurchaser?

332050

D4. Does the state's taxabilitymatrix indicate if the state's tax isimposed on a product transferredelectronically to a person otherthan the end user or on a sale withthe right of less than permanentuse granted by the seller or whichis conditioned upon continuedpayment from the purchaser?

Yes T.C.A. 67-6-233 (f)

2008 P.C. 1106Secs. 18 & 19Eft. 1-1-09

332060

G. Is the state's tax treatment ofthe sale of a digital code the sameas the tax treatment of specifieddigital product or product deliveredelectronically to which the digitalcode relates?

Yes T.C.A. 67-6-233 (c)

2008 P.C. 1106Secs. 18 & 19Eft. 1-1-09

Section333

Use of Specified DigitalProducts Effective January 1, 2010

333010

Excluding prewritten computersoftware, does the state includeany product transferredelectronically in its definition oftangible personal property?

NoT.C.A. 67-6-102 (89) and

67-6-231

2008 P.C. 1106Secs. 18 & 19Eft. 1-1-09

Section334

Prohibited replacementtaxes

334010 SSTGB RULE 334 Does the state have any prohibitedreplacement taxes? No

Section335

Tax AdministrationPractices

335010

No state shall be found outof compliance with theAgreement because theeffect of the state's laws,rules, regulations, andpolicies do not follow eachof the tax administrationpractices adopted by theGoverning Board.

Did the state complete the TaxAdministration Practices section ofthe taxability matrix by the first dayof the calendar month that is atleast 60 days after the date theGoverning Board selects adisclosed and/or best practice andsubmit it to the Executive Directorfor posting on the GoverningBoard's website?

No Completed latest matrix 8-1-2017

Section401 Seller participation

401010 SSTGB RULE 401.1A. Does the state participate in theGoverning Board's onlineregistration system?

Yes T.C.A. 67-6-608

2007 P.C. 602Sec. 117

Eft. 1-1-08

Since Tennessee became an associatemember state, it has particpated in theStreamlined Central Registration Systempursuant to actions of the commissionerauthorized by T.C.A. 67-6-805(a)

401020

B. Does the state provide that itwill not use a seller's registrationwith the central registration systemand collection of taxes in memberstates in determining whetherseller has nexus with state for taxat any time?

Yes T.C.A. 67-6-608 (c)

2007 P.C. 602Sec. 117

Eft. 1-1-08

Since Tennessee became an associatemember state, it has particpated in theStreamlined Central Registration Systempursuant to actions of the commissionerauthorized by T.C.A. 67-6-805(a)

Section402 Amnesty for registration

402010CRIC INTERPRETIVEOPINIONS 2006-8 and2006-9

A.1. Does the state provideamnesty to a seller who registersto pay or collect and remitapplicable tax in accordance withAgreement, provided the sellerwas not so registered in state in12-month period precedingeffective date of state'sparticipation in the Agreement?

YesT.C.A. 67-6-537(a-c)

2005 P.C. 499Sec. 65

Eft. 6-22-052007 P.C. 602Sec. 114

Eft. 1-1-08

402020

A.2. Does the state provide thattheir amnesty will precludeassessment for tax together withpenalty and interest for sales madeduring the period the seller was notregistered in the state, providedregistration occurs within 12months of the effective date ofstate's participation in theAgreement?

Yes T.C.A. 67-6-537 (b)

2005 P.C. 499Sec. 65

Eft. 6-22-052007 P.C. 602Sec. 114

Eft. 1-1-08

402030

A.3. For states that join theAgreement after the seller hasalready registered under theAgreement, does the state provideamnesty to those sellers inaccordance with A.1. and A.2.above?

NAT.C.A. 67-6-537(a)(1)

2005 P.C. 499Sec. 65

Eft. 6-22-052007 P.C. 602Sec. 114

Eft. 1-1-08

402040 CRIC INTERPRETIVEOPINION 2006-2

B. Does the state provide that itsamnesty is not available to a sellerwho has received a notice of auditfrom that state and the audit is notyet resolved, including any relatedadministrative and judicialprocesses?

YesT.C.A. 67-6-537(a)(3)

2005 PC 499Sec. 65

Eft. 6-22-052007 PC 602Sec. 114

Eft. 1-1-08

402050 CRIC INTERPRETIVEOPINION 2006-1

C. Does the state provide that itsamnesty does not apply to taxes

Yes T.C.A. 67-6-537

2005 P.C. 499Sec. 65

8/13/2018 Tennessee v2017.0

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already paid to the state or totaxes already collected by a seller?

(c)(1) Eft. 6-22-052007 P.C. 602Sec. 114

Eft. 1-1-08

402060CRIC INTERPRETIVEOPINIONS 2006-6, 2006-8and 2006-9

D. Does the state provide that itsamnesty is fully effective, absentfraud or misrepresentation ofmaterial fact, as long as the sellercontinues registration andcontinues payment of taxes forperiod of at least 36 months? Didthe state toll its statute applicableto asserting a tax liability during 36month period?

YesT.C.A. 67-6-537(c)(3-4)

2005 P.C. 499Sec. 65

Eft. 6-22-052007 P.C. 602Sec. 114

Eft. 1-1-08

402070

E. Does the state provide that itsamnesty is applicable only to taxesdue from a seller in its capacity asseller and not in its capacity as abuyer?

YesT.C.A. 67-6-537 (a)(1) and(c)(1)

2005 P.C. 499Sec. 65

Eft. 6-22-052007 P.C. 602Sec. 114

Eft. 1-1-08

Section403 Method of remittance

403010Does the state provide that theseller may select one of thetechnology models?

YesT.C.A. 67-6-504(j)(1)

2007 P.C. 602Sec. 68 & 106Eft. 1-1-08

403020A. Model 1-seller selects CSP asagent to perform all functionsexcept remit tax on its ownpurchases?

YesT.C.A. 67-6-504(j)(1)

2007 P.C. 602Sec. 68 & 106Eft. 1-1-08

403030B. Model 2-seller selects CASwhich calculates amount of taxdue?

YesT.C.A. 67-6-504(j)(3)

2007 P.C. 602Sec. 68 & 106Eft. 1-1-08

403040C. Model 3-seller utilizes ownproprietary system that has beencertified as a CAS?

Yes2007 P.C. 602Sec. 68

Eft. 1-1-08

Section404 Registration by an agent

404010Does the state provide that theseller may be registered by anagent?

Yes

T.C.A. 67-6-102 (11)certifiedserviceproviderdefinition Eft. 6-27-06T.C.A. 67-6-504 (j-l)

2007 P.C. 602Sec. 117

Eft. 1-1-08

404020This isn't a complianceissue but is somethingsellers and their agentsshould know.

Does the state require that thewritten agent appointments besubmitted to the state?

No

Section501

Provider and SystemCertification

501010SSTGB RULES 501.1,501.2, 501.3, 501.4, 501.5,501.6, 501.7 and 501.8

A. Does state law provide forprovider and system certification toaid in the administration of salesand use tax collection?

Yes

T.C.A. 67-6-102 (11)certified

serviceproviderdefinition Eft. 6-27-06

T.C.A. 67-6-504 (j-l)

2007 P.C. 602Sec. 68 & 106Eft. 1-1-08

Section502

State review andapproval of CertifiedAutomated SystemSoftware and CertainLiability Relief

502010A. Can the state confirm that itreviews software submitted forcertification as a CAS underSection 501?

YesT.C.A. 67-6-102 (10) and

67-6-504 (j)(3)

2007 P.C. 602Sec. 106

Eft. 1-1-08

502020B. Does the state provide liabilityrelief to CSP's and model 2 sellersfor reliance on the certification?

YesT.C.A. 67-6-504 (j)(2)(A)and67-6-504 (j)(3)

2007 P.C. 602Sec. 106

Eft. 1-1-08

502030C. Does the state provide liabilityrelief to CSP's in the same manneras provided to sellers underSection 317?

YesT.C.A. 67-6-533 (a) and

67-6-537(d)

2007 P.C. 602Secs. 110 & 114Eft. 1-1-08

502040

E. Does the state allow the CSP ormodel 2 seller 10 days to correctclassification of items found to bein error before holding the CSP ormodel 2 seller liable?

YesT.C.A. 67-6-504(j)(2)(A) & (B)

2007 P.C. 602Sec. 106

Eft. 1-1-08

Section601

Monetary allowanceunder Model 1

601010 A. Does the state provide amonetary allowance to a CSP inModel 1 in accordance with theterms of the contract between thegoverning board and the CSP?

Yes T.C.A. 67-6-509 (d)

2005 P.C. 499Sec. 67

Eft. 6-22-05 2006 P.C. 1019

Sec. 43 Eft. 6-27-06

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T.C.A. 67-6-542 2007 P.C. 602Sec. 108.

Eft. 1-1-08.T.C.A. 67-6-509(c-e) & Sec. 109Eft. 1-1-08(repeals T.C.A.67-6-542)

Section602

Monetary allowance forModel 2 sellers

602010 SSTGB RULES 602.1 and602.2

Does the state provide monetaryallowance to Model 2 sellerspursuant to the Governing Board'srules?

Yes T.C.A. 67-6-509 (d)

2005 P.C. 499Sec. 67

Eft. 6-22-05 2006 P.C. 1019

Sec. 43 Eft. 6-27-06

T.C.A. 67-6-542 2007 P.C. 602Sec. 108.

Eft. 1-1-08.T.C.A. 67-6-509(c-e) & Sec. 109Eft. 1-1-08(repeals T.C.A.67-6-542)

APPENDIX C - LIBRARY OFDEFINITIONS

Please verify for each item thatthe state uses the definitionprovided by the Agreement. Ifthe item is not applicable in yourstate, answer "N/A."

Part I Administrativedefinitions

AD010 SSTB RULE 330.1 Bundled transaction Yes Eft. 7-1-19

2007 P.C. 602Sec. 133Eft. Date

changed to 7-1-19 by

2017 PC 193

AD020SSTGB RULE 327.4 andCRIC INTERPRETIVEOPINION 2015-2

Delivery charges Yes T.C.A. 67-6-102 (25)

2007 P.C. 602Sec. 68

Eft. 1-1-08

AD030SSTGB RULE 327.6 andCRIC INTERPRETIVEOPINIONS 2006-12 and2008-2

Direct mail Yes T.C.A. 67-6-102 (30)

2007 P.C. 602Sec. 68

Eft. 1-1-08

AD040 Lease or rental Yes T.C.A. 67-6-102 (49)

2007 P.C. 602Sec. 68

Eft. 1-1-08

AD050 Purchase price Yes T.C.A. 67-6-102(72)

2007 P.C. 602Sec. 68

Eft. 1-1-08

AD060 Retail sale or Sale at retail Yes T.C.A. 67-6-102 (76)

2007 P.C. 602Sec. 68

Eft. 1-1-08

AD070

SSTGB RULES 327.4,327.7 and 327.9 andAMENDED DEFINITIONON SEPTEMBER 16, 2015RELATING TO THEEXCLUSION FORCERTAIN FEDERALEXCISE TAXES ANDFEES

Sales price Yes See Comments T.C.A. 67-6-102 (79)

2007 P.C. 602Sec. 68

Eft. 1-1-08

Legislation to repeal sales price bundlingprovision (T.C.A. 67-6-102(79)(A)(vi) isneeded by effective date of bundledtransaction language 7-1-19.

AD080 Telecommunications nonrecurringcharges NA

AD090 CRIC INTERPRETIVEOPINION 2009-1 Tangible personal property Yes T.C.A. 67-6-

102 (89)2007 P.C. 602Sec. 68

Eft. 1-1-08

Part II Product definitions CLOTHING

PD010 Clothing Yes T.C.A. 67-6-102 (12)

2006 P.C. 398Sec. 2

Eft. 7-1-06

PD020 Clothing accessories or equipment Yes T.C.A. 67-6-102 (13)

2006 P.C. 398Sec. 2

Eft. 7-1-06

PD030 Essential clothing NA

PD040 CRIC INTERPRETIVEOPINION 2006-5 Fur clothing NA

PD050 Protective equipment Yes T.C.A. 67-6-102 (71)

2006 P.C. 398Sec. 2

Eft. 7-1-06

PD060 Sport or recreational equipment Yes T.C.A. 67-6-102 (87)

2006 P.C. 398Sec. 2

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Eft. 7-1-06

COMPUTER RELATED

PD070 Computer Yes T.C.A. 67-6-102 (17)

2007 P.C. Sec.68 Eft. 1-1-08

PD080 CRIC INTERPRETIVEOPINION 2009-1 Computer software Yes

T.C.A. 67-6-102 (18) and

67-6-231 (a)

2007 P.C. Sec.68 Eft. 1-1-08

PD090 Delivered electronically Yes T.C.A. 67-6-102 (24)

2007 P.C. Sec.68 Eft. 1-1-08

PD100 Electronic Yes T.C.A. 67-6-102 (35)

2004 P.C. 782Sec. 3Eft. 7-1-04

PD110 Load and leave NA

PD120SSTGB RULES 309.2 amd309.5 and CRICINTERPRETIVE OPINION2009-1

Prewritten computer software Yes T.C.A. 67-6-102 (68)

2007 P.C. Sec.68 Eft. 1-1-08

Effective, July 1, 2015 Public Chapter 514Acts of 2015 Section 22 provides salesand use tax also applies to the sale, lease,license, subscription and use of computersoftware that remains in the possession ofthe seller, or its designee, that is remotelyaccessed and used by the customer froma Tennessee location.

See Important Notice 15-14, ImportantNotice 15-24, and Remotely AccessedSoftware Direct Pay Permit Form.

PD130 SSTGB RULES 309.4 and327.5

Computer software maintenancecontract Yes

T.C.A. 67-6-102 (19) and67-6-231(b)

2009 P.C. 530Secs. 50-52

Eft. 7-1-09

PD140 Mandatory computer softwaremaintenance contract NA T.C.A. 67-6-

231 (b)2009 P.C. 530Secs. 50-52

Eft. 7-1-09

PD150 Optional computer softwaremaintenance contract NA T.C.A. 67-6-

231 (b)2009 P.C. 530Secs. 50-52

Eft. 7-1-09

SSTB RULE 332.1 DIGITAL PRODUCTS

PD160 Specified digital products Yes T.C.A. 67-6-102 (86)

2008 P.C. 1106Secs. 18, 19,20, 21, 22

Eft. 1-1-09

PD170 Digital audio-visual works Yes T.C.A. 67-6-102 (28)

2008 P.C. 1106Secs. 18, 19,20, 21, 22

Eft. 1-1-09

PD180 Digital audio works Yes T.C.A. 67-6-102 (27)

2008 P.C. 1106Secs. 18, 19,20, 21, 22

Eft. 1-1-09

PD190 Digital books Yes T.C.A. 67-6-102 (29)

2008 P.C. 1106Secs. 18, 19,20, 21, 22

Eft. 1-1-09

FOOD AND FOOD PRODUCTS

PD200 Alcoholic beverages Yes T.C.A. 67-6-102 (6)

2007 P.C. 602Sec. 68

Eft. 1-1-08

PD210 Bottled water NA

PD220

SSTGB RULE 327.8 andAPPENDIX N and CRICINTERPRETIVEOPINIONS 2007-3, 2009-4, 2009-5 and 2013-2

Candy Yes T.C.A. 67-6-102 (9)

2007 P.C. 602Secs. 68 & 83Eft. 1-1-08T.C.A. 67-6-228

PD230 Dietary supplement Yes T.C.A. 67-6-102 (26)

2007 P.C. 602Secs. 68 & 83Eft. 1-1-08T.C.A. 67-6-228

PD240CRIC INTERPRETIVEOPINIONS 2010-3 and2011-1

Food and food ingredients Yes T.C.A. 67-6-102 (41)

2007 P.C. 602Secs. 68 & 83Eft. 1-1-08T.C.A. 67-6-228

PD250 Food sold through vendingmachines NA

PD260CRIC INTERPRETIVEOPINIONS 2006-4, 2006-11 AND 2013-3

Prepared food Yes T.C.A. 67-6-102 (66)

2007 P.C. 602Secs. 68 & 83Eft. 1-1-08T.C.A. 67-6-228

PD270CRIC INTERPRETATIVEOPINIONS 2009-2 and2013-1

Soft drinks NA

PD280 Tobacco Yes T.C.A. 67-6-102 (93)

2007 P.C. 602Secs. 68 & 83Eft. 1-1-08T.C.A. 67-6-228

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HEALTH-CARE

PD290 CRIC INTERPRETIVEOPINION 2007-1 Drug Yes T.C.A. 67-6-

102 (33)

2007 P.C. 602Sec. 68 & 92

Eft. 1-1-08T.C.A. 67-6-320

PD300 CRIC INTERPRETIVEOPINION 2015-1

Durable medical equipment(effective 1/1/08) Yes T.C.A. 67-6-

102 (34)

2007 P.C. 602Sec. 68 & 89

Eft. 1-1-08T.C.A. 67-6-314

PD305 Feminine Hygiene Products(adopted 5/11/17)

NA

PD310 Grooming and hygiene products Yes T.C.A. 67-6-102 (42)

2007 P.C. 602Sec. 68 & 92

Eft. 1-1-08 T.C.A. 67-6-320

PD320 Mobility enhancing equipment Yes T.C.A. 67-6-102 (53)

2007 P.C. 602Sec. 68 & 89

Eft. 1-1-08T.C.A. 67-6-314

PD330 Over-the-counter-drug Yes T.C.A. 67-6-102 (59)

2007 P.C. 602Sec. 68 & 92

Eft. 1-1-08 T.C.A. 67-6-320

PD340 Prescription Yes T.C.A. 67-6-102 (67)

2007 P.C. 602Sec. 68 & 92

Eft. 1-1-08T.C.A. 67-6-314and 67-6-320

PD350 CRIC INTERPRETIVEOPINION 2015-1 Prosthetic device Yes T.C.A. 67-6-

102 (70)

2007 P.C. 602Sec. 68 & 92

Eft. 1-1-08 T.C.A. 67-6-320

SSTGB RULE 327.2 TELECOMMUNICATIONS

The following are TaxBase/Exemption terms:

PD360 Ancillary services Yes T.C.A. 67-6-102 (7)

PD370 Conference bridging service YesT.C.A. 67-6-102(7)(A)

PD380 Detailed telecommunicationsbilling service Yes

T.C.A. 67-6-102(7)(B)

PD390 Directory assistance YesT.C.A. 67-6-102(7)(C)

PD400 Vertical service YesT.C.A. 67-6-102(7)(D)

PD410 Voice mail service YesT.C.A. 67-6-102(7)(E)

PD420 Telecommunications service Yes T.C.A. 67-6-102 (90)

PD430 800 service NA

PD440 900 service NA

PD450 Fixed wireless service NA

PD460 Mobile wireless service NA

PD470 CRIC INTERPRETIVEOPINION 2010-2 Paging service NA

PD480 SSTGB RULE 327.2(l) Prepaid calling service Yes T.C.A. 67-6-102 (64)

2007 P.C. 602Sec. 68 & 85

Eft. 1-1-08 T.C.A. 67-6-230(a)

PD490 SSTGB INTERPRETIVEOPINION 2015-3 Prepaid wireless calling service Yes T.C.A. 67-6-

102 (65)

2007 P.C. 602Sec. 68 & 85

Eft. 1-1-08 T.C.A. 67-6-230(a)2007 P.C. 602Sec. 176

Eft. Datechanged to

7-1-19 by 2017 P.C. 193

Tennessee interprets the statute to mean"units or dollars." Tennessee does notexclude from the definition of prepaidwireless calling services offers that havebeen advertised as "unlimited minutes"that expire over a prescribed unit of timesuch as weeks or months.

PD500 Private communications service Yes T.C.A. 67-6-102 (69)

PD510 Value-added non-voice dataservice

NA

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The following are Modifiers ofSales Tax Base/Exemption Terms:

PD520 Coin-operated telephone service Yes T.C.A. 67-6-102 (14)

PD530 International Yes T.C.A. 67-6-102 (45)

PD540 Interstate Yes T.C.A. 67-6-102 (46)

PD550 Intrastate Yes T.C.A. 67-6-102 (47)

PD560 Pay telephone service NA

PD570 Residential telecommunicationsservice NA

Part III Sales Tax HolidayDefinitions

HD010 Disaster Preparedness Supply NA

HD020 Disaster Preparedness GeneralSupply NA

HD030 Disaster Preparedness SafetySupply NA

HD040 Disaster Preparedness Food-Related Supply NA

HD050 Disaster Preparedness FasteningSupply NA

HD060 Eligible property Yes T.C.A. 67-6-393 (e)

HD070 Energy Star qualified product NA

HD080 Layaway sale YesT.C.A. 67-6-102 (48) and 67-6-393(d)(1)

HD090 Rain check YesT.C.A. 67-6-102 (74) and

67-6-393 (d)(4)

HD100 CRIC INTERPRETIVEOPINION 2011-2 School supply Yes

T.C.A. 67-6-102 (83) and

67-6-393 (a)(2)

HD110 School art supply YesT.C.A. 67-6-102 (80) and

67-6-393 (a)(3)

HD120 School instructional material YesT.C.A. 67-6-102 (82) and 67-6-393 (b)(5)

HD130 School computer supply YesT.C.A. 67-6-102 (81) and 67-6-393 (b)(6)

HD140 WaterSense products NA