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Revenue clarifies military, agricultural and updated 3-day removal exemptions and audit risks
Summary
Department staff outlined common exemptions (government, nonprofit, motor carrier, agricultural limits), detailed military-exemption paperwork rules, and warned dealers about the revised 3-day removal affidavit that now requires a vehicle be 'primarily used' outside Tennessee to qualify, with audit and civil-penalty risks for misuse.
Panelists reviewed multiple exemption categories and stressed documentation requirements for each. Katie listed government and nonprofit exemptions requiring fully completed Tennessee exemption certificates, explained that agricultural exemptions cannot be used to purchase ordinary cars or trucks (only certain trailers/off-highway equipment), and reviewed motor-carrier weight/usage stipulations. On military exemptions the presenter said qualifying buyers must be active-duty full time and stationed in Tennessee on the date of purchase, or otherwise meet Title 10/recognized combat zone criteria to qualify.
On the updated 3-day removal affidavit, the department emphasized the recent addition that the vehicle must be "primarily used" outside Tennessee to qualify for the exemption and dealers must obtain a fully completed affidavit that includes buyer and dealer certifications. Will Binkley warned the change was intended to prevent misuse (for example, Montana LLC arrangements) and Anna Stovall said auditors look for VIN, buyer, seller, date and signatures — without such records the sale will be treated as nonexempt and the dealer liable for sales tax.
