Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the SaaS Taxation topic
No spam. Unsubscribe anytime.
Tennessee guidance: SaaS is taxable and sourcing depends on where users access the software
Summary
The department said remotely accessed software (SaaS) is generally taxable in Tennessee; taxable amount is allocated to users in Tennessee and the department pointed to Important Notice 15‑14 for details.
Department presenter Katie Julian described remotely accessed software (commonly called SaaS) as software that remains in the dealer’s possession while customers access it over the Internet. "This has become huge," she said, and noted Tennessee has had tax treatment for remotely accessed software in place since 2015.
The department emphasized sourcing is based on user location: if a Tennessee purchaser has users both inside and outside Tennessee, the sales price is allocated by users (the department gave an example of 400 in‑state and 200 out‑of‑state users, resulting in 66.7% Tennessee taxable use). Julian also said the physical location of the server or cloud host is immaterial to Tennessee taxability — what matters is where the users access and use the software.
Panelists pointed attendees to Important Notice 15‑14 and the department's web resources for the direct‑pay permit and other implementation details; they recommended sellers with multistate customers consult the department or the nexus webinar for apportionment guidance.
