Tennessee Says “No Presence, No Problem”
Out-of-State Dealers operating in Tennessee should register by March 1, 2017, and begin collecting Sales Tax by July 1, 2017. This rule was effective January 1, 2017, and provides that out-of-state dealers with no physical presence in Tennessee who engage in regular solicitation of consumers in Tennessee and who make sales exceeding $500,000 to consumers in Tennessee during the previous 12-month period have a substantial nexus with this state.
Rule 129(2) applies to sellers of tangible personal property or other taxable products purchased by Tennessee consumers and delivered into the state for use, consumption, distribution, or storage in Tennessee. The rule requires that these sellers deemed “dealers”, if they have not already done so, must register for Tennessee sales and use tax purposes by March 1, 2017. These dealers are also required to begin collecting and remitting sales and use tax by July 1, 2017. When registering by March 1, 2017, an out-of-state dealer acknowledges that it will begin collecting and remitting sales and use tax by July 1, 2017.
If an out-of-state dealer has no physical presence in Tennessee and does not meet the $500,000 threshold, it is not required to register, but the Department encourages all dealers to register as a convenience to their customers.
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