SALES Help and FAQs
Using Sales and Use Tax Online Filing
If you have questions about filing sales and use tax online or need assistance in filing, contact:
Tennessee Department of Revenue
Attention: Taxpayer Services
500 Deaderick Street
Nashville, Tennessee 37242
Phone: (615) 253-0704 For Technical Assistance: 866-368-6374 (ln State Toll-Free)
To register for the Sales and Use Tax Online Filing service, you must create a TN.gov account. TN.gov accounts allow you to enter, store, and manage information needed for accessing TN.gov services. Once your TN.gov account is set up, you can add or remove services at any time.
There is no charge for creating a TN.gov account or for using the Sales and Use Tax Online Filing service.
Sales and use tax returns must be filed by the 20th (or the first work day after the 20th, if the 20th falls on a weekend or holiday) of the month following the period for which the tax is due. For example, a January return for a monthly filer would be due February 20. A return for January through March for a quarterly filer would be due April 20. There are special filing requirements for accounts filing payments in excess of $2,500.
This feature allows you to start a return and complete it later.
If you edit your Filing Period Ending year (yyyy) after you have already started a return, you will need to re-enter all your amounts so that calculations will be correct.
No, you do not have to make a payment with your filing. You have the option of filing with a payment amount of your choice or filing only. But, if you choose to not pay at this time, when you do pay it will have to be an Electronic Funds Transfer payment because you filed online. If you are not set up to submit your payment by EFT, you must set up your account to make payments by ACH Debit, ACH Credit, or Fed Wire transmission. Please contact the Department of Revenue for additional details.
Credit cards accepted are MasterCard, American Express, and Discover. A 2.49% processing fee will be added to your payment.
Payment warehousing is when you choose to file a return with payment, and you select a future settlement date for the payment. The settlement date must be at least 2 days in the future and can only be used when filing a current period return. It will not be available after the 17th of the month and cannot be used when paying by credit card. If the due date falls on a weekend or holiday, please enter the 20th for settlement date and Revenue will still recognize this as a timely payment.
Some taxpayers have special accounts setup with their banks where they only allow certain Company Name's and Id's to debit their accounts. If taxpayers are filing with payment on the portal, they should use the following:
TDOR's Company Name: TENN DEPT OF REV
TDOR's Company ID#: E626001445
Note: Tennessee Department of Revenue has several Company I. D. #'s. The above Company I. D. # is only valid for this Sales Tax Portal Application.
No. Figures from an amended return replace amounts reported on the original return. Any payment filed with the original return will be applied to the amended return. If the liability on the amended return is greater than the amount originally reported, pay the difference in liability only. If the amended liability is less than what was originally reported, do not make a payment with the amended return. A credit will be applied to the sales and use tax account.
A zero return should be a return with no sales, no exemptions, no Penalty & Interest, and no payment.
You can close an account online or by contacting Tennessee Department of Revenue at (615) 253-0704.
If you filed on the new site, you can log back into the account administration screen and click on the confirmation number; this will allow you to print a copy of the return.
An electronic payment or return is considered timely if it is filed on or before 11:59:59 PM on the due date of the return. If you are filing state and local sales & use taxes late, you must pay a penalty of 5% of the tax for each 1 to 30 day period for which tax is delinquent, the total penalty not to exceed 25% of the tax. The minimum penalty is $15 regardless of the amount of tax or whether or not tax is due. If filed late, compute interest at 7.25% per annum on the tax.
Please log in to this online application and on the Account Administration page, you will see the date last filed, ending period, confirmation number, along with payment amount, and settlement date if filing with payment.
If you need to make a payment in excess of $99,999,999.99, please contact the Tennessee Dept. of Revenue at 1-866-368-6374.
Yes. The T.C.A. 67-1-1702 Confidentiality documentation states: Notwithstanding any provision of law to the contrary, returns, tax information and tax administration information shall be confidential and, except as authorized by this part, no officer or employee of the state and no other person (or officer or employee thereof) who has or had access to such information shall disclose any such information obtained by such officer or employee in any manner in connection with such officer's or employee's service as an officer or employee, or obtained pursuant to the provisions of this part, or obtained otherwise. [Acts 1977, ch. 152, § 1; T.C.A., § 67-132; 2000, ch. 982, § 40.]
Registering to Collect Sales and Use Tax
Business registration for sales or other taxes requires the completion of a no cost application. You can complete and submit the application online or download a paper application. When completed properly and received by the department, a registration number will be issued to qualified applicants.
Once your business is registered, you can create a TN.gov account to use the Sales and Use Tax Online Filing service.
Any person that sells, leases or rents tangible personal property or provides a taxable service in Tennessee is required to register for sales or use tax purposes, even though the product sold may be tax exempt. Persons that sell, on the average, less than $400 per month and pay tax to their suppliers do not need to register until their average monthly sales exceed that amount. Persons that do not sell tangible personal property or taxable services, but buy untaxed merchandise from out-of-state for use and consumption in Tennessee must register and pay the use tax directly to the Department of Revenue. Returns are due monthly, quarterly or annually dependent upon the filing status.
Collecting Sales and Use Tax
Nexus, also known as sufficient physical presence, is the determining factor of whether an out-of-state business selling products into Tennessee is liable for collecting the tax on sales in Tennessee. Nexus may be established by a corporate presence, ownership of real or tangible personal property in this state, the lease or rental of tangible personal property in this state, resident employees, or similar other types of existence.
All labor inherent to the creation, installation, or repair of tangible personal property, as well as the parts or materials are subject to the tax. Labor to install or repair real property is not subject to the sales tax.
Both computer hardware and software are defined as tangible personal property, subject to sales tax when sold to a consumer. When a seller includes a charge for consulting or training within the total sale, lease, or rental price for software, these become a part for the tax base. However, consulting or training charges not part of the agreed price for purchase, lease, or rental of hardware or software are not generally taxable unless the consultant upgrades, modifies, changes or repairs the hardware or software during such consulting or training.
Qualified organizations, with a user and consumer exemption from sales and use tax, are generally required to register as dealers when selling tangible personal property or taxable services. The exemption of the organization cannot be used to buy goods or services free of tax which the organization will sell.
Other Tax Questions
Generally, the state sales and use tax rate is 7.00% and the local rate is 2.25%. However, the local rate found at: http://tn.gov/assets/entities/revenue/attachments/taxlist.pdf, will vary from 1.00% to 2.75%. Certain circumstances may create exemptions from one or both of the taxes, while qualified consumer types may enjoy reduced rates of tax. Certain food items are taxed at 5%.
Use tax, at the same rates as sales tax, becomes due when the user and consumer of taxable merchandise does not pay tax to the supplier. Examples include purchases of tangible personal property for use from an out-of-state vendor who does not collect the tax, extraction from inventory purchased on a resale certificate for personal use and consumption. Generally, contractors become liable for a use tax on materials used in realty construction even when the contractee first purchases the materials on an exemption certificate. Use tax is due even on purchases made by citizens from another state which are not taxed by the seller.
These laws are in T.C.A. Section 67-6-101 et seq.
The sales and use tax law limits the local option tax found at: http://tn.gov/assets/entities/revenue/attachments/taxlist.pdf, to the first $1,600 of the purchase or use of a single article of tangible personal property. A single article is generally defined as one pre-assembled, self contained unit of tangible personal property in the form that it comes from the manufacturer. Examples of single articles are motor vehicles, earth moving equipment and television sets. Public Chapter 856 (effective July 15, 2002) imposed a 2.75% rate (in addition to the regular state rate) on the amount in excess of $1,600 up to $3,200.
A business, registered for sales and use tax can use a resale certificate only when the merchandise being purchased is to be resold by the business. A business cannot use a resale certificate to purchase merchandise that they will use and consume in the conduct of business. Any merchandise obtained upon resale certificate is subject to the Sales and Use Tax if it is used or consumed by the vendee in any manner, and must be reported and the tax paid thereon direct to the Department of Revenue.
Pre-authorized manufacturers are eligible for complete exemption from sales and use tax on qualified industrial machinery equipment, including repair parts and labor, that are necessary for product creation for sale. Pollution control facilities required of manufacturers are included in the exemption. Substantially reduced rates of sales and use tax are available for energy and water used by manufacturers.