Out-of-state sellers making sales into Tennessee need to be on top of local sales tax rates in the state. Beginning October 1, 2019, these sellers must apply the local sales tax rate for the jurisdiction where products or services are shipped or delivered. No longer will remote sellers be allowed to apply the uniform local rate of 2.25%.
In addition, Tennessee sales tax returns must identify all the jurisdictions in which remote sellers ship or deliver sales into the state. This reporting allows the Tennessee Department of Revenue to correctly distribute the sales tax dollars to local jurisdictions.
Another caveat, if sales are shipped or delivered into an incorporated municipality which is within an unincorporated county in Tennessee, these sales must be reported on separate returns.
Get an up-to-date list of all states with economic nexus requirements for out-of-state sellers.
Tennessee has more than 200 city or county jurisdictions, each with specific sales tax rates. For more information on the specifics of this local sales tax reporting change, visit the Tennessee Department of Revenue website.
