- Tennessee Department of Revenue issued a ruling on sales and use tax applicability to employee recognition programs.
- The ruling covers consulting, startup, and website design fees, transaction fees on certificate issuance, and merchandise and gift cards.
- Consulting, startup, and website design fees are not subject to tax as the primary service is managing the recognition program, not the website.
- Transaction fees associated with certificate issuance are not taxable as they do not qualify as a sale of tangible personal property.
- Merchandise is considered tangible personal property and is subject to sales tax.
- Gift cards are not considered tangible personal property and are not subject to tax.
- The ruling emphasizes the importance of structuring transactions to separate non-taxable administrative services from taxable sales of tangible personal property.
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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