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.

About Davis & Davis LLC – Sales Tax Experts: Headquartered in Dallas, Texas, Davis & Davis LLC – Sales Tax Experts specializes in sales/use tax refund recovery and audit defense. Our team of consultants is comprised of former Big 4 sales tax consultants and state sales tax auditors. Each of our consultants has 15 to 20 years of experience, providing our clients with access to a highly specialized team of sales/use tax professionals. At Davis & Davis, we are committed to maintaining the highest standards in our talent pool. We work hard to meet our clients’ needs by ensuring that you view our firm as an extension of your company and a member of your team.

For sales/use tax compliance questions or audit-related concerns, we are here to help!

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