Tennessee Implements New Sourcing Provisions in Sales and Use Tax Laws

• House Bill 323 enacted on May 11, 2023, made significant changes to Tennessee’s sales and use tax laws
• A sales tax holiday on food was introduced from August 1 to October 31, 2023
• Sourcing provisions consistent with Streamlined Sales and Use Tax Agreement (SSUTA) were adopted effective July 1, 2024
• Sales sourced to seller’s business location if purchaser receives product there
• If purchaser receives product elsewhere, sale is sourced to that location
• Destination sourcing adopted for sales of services performed on tangible personal property and computer software
• Sales and services made through a marketplace facilitator’s marketplace are sourced to where product is received
• Sourcing for leased property follows destination sourcing
• Origin sourcing remains intact for intrastate sales and leases
• Detailed sourcing rules provided for leases, rentals, transportation equipment sales, repair services, laundering, installation services, direct mail, and calling services.

Source: salestaxinstitute.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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