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Out-of-state dealers told to check nexus, price by customer address and note business-tax differences
Summary
Revenue presenters told out-of-state dealerships with Tennessee nexus to calculate sales tax using the customer's Tennessee address, pointed to a local-rate lookup, and reminded dealers that business tax (a privilege tax) applies differently than sales/use tax.
The Department of Revenue's webinar included guidance for out-of-state dealerships that have Tennessee tax nexus: sales tax for Tennessee customers must be calculated based on the customer's Tennessee address, and the department provided a county local-rate lookup map and links to a webinar on nexus and out-of-state sales reporting. "If you're selling a car in another state, but it's getting delivered to a customer in Tennessee, the sales tax is gonna be based on where they live in Tennessee," the presenter said.
Panelists also stressed the difference between business tax and sales/use tax. A panel member explained business tax is a privilege tax owed by a company doing business in Tennessee and may apply even when a purchaser uses a 3-day affidavit to avoid sales tax, because the sale occurred at a Tennessee place of business. Dealers were advised to consult the department's webinars specific to business-tax return filing and nexus.
