Tennessee Adopts Streamlined Sales Tax Sourcing Rules
Effective July 1, 2024, the Tennessee Legislature adopted the Streamlined Sales Tax sourcing rules for a retail sale of a product from outside of Tennessee into Tennessee. Sales are generally sourced to the location where the goods or services are delivered or used.
Key changes include:
- Destination-Based Sourcing: Most sales of tangible personal property are now sourced to the destination state, where the product is delivered.
- Service Sourcing: Services performed on tangible personal property and computer software are also sourced to the destination.
- Marketplace Facilitator Sourcing: Sales made through marketplace facilitators are sourced to the location where the product is received by the purchaser.
- Lease Sourcing: Leases of property are generally sourced to the location where the property is primarily used.
These changes will impact businesses operating in Tennessee, particularly those involved in e-commerce and remote sales. Businesses should review their tax compliance procedures to ensure they are following the new sourcing rules.
Please note that this is only an overview. For specific guidance, connect with our sales and use tax team here.