Tennessee Issues Update After Supreme Court’s Wayfair Decision

The Tennessee Department of Revenue recently issued a special notice that provides additional guidance regarding how Tennessee is reacting to the recent South Dakota vs. Wayfair U.S. Supreme Court decision.  Here is a brief summary of the notice:

  • There is no current change in Tennessee’s application of sales tax to sales made into Tennessee by out-of-state vendors with no physical presence in Tennessee.
  • Notification will be made regarding the effective date the change will take place.
  • Even though Tennessee has already passed a law establishing an “economic nexus” rule that aligns with the Supreme Court decision, the law has been prohibited from being enforced by the legislature until the Department fully reviews the Supreme Court Ruling and decides how to proceed.
  • At some point, this application will change to align with the Supreme Court ruling and Tennessee’s economic nexus law.
  • Taxpayers are encouraged to voluntary comply with the new decision and Tennessee’s law and for such taxpayers to begin charging and collection Tennessee sales tax.

The good news is the notice indicates that when the rule does eventually go into effect in Tennessee, there will be no retroactivity.  When the new date is announced, there will be no assessment by the Department of Revenue on that basis prior to that date.

To read the Department of Revenue’s Special Notice #18-11, please click here.

In the Notice #18-11, there is also an opportunity to sign up to receive notification when the Department does issue the effective date of the changes.

The State and Local Tax group at Crosslin stands ready to assist you in understanding the ramifications and putting into place a strategy to be in compliance with these potential changes for your business.     Please feel free SALT Director Mark Loftis at 615-320-5500 ext. 472 or mark.loftis@crosslinpc.com.  As always, we appreciate your business!