HELP AND FREQUENTLY ASKED QUESTIONS

Who to contact for Help

Why do I need to pay sales tax on merchandise purchased out of state?

What are the tax rates?

When is the return due?

What is the maximum payment I can make online?

Is all the information I provide confidential?


WHO TO CONTACT FOR HELP

If you have questions about Tennessee Consumer Use Tax, contact
Tennessee Department of Revenue

Attention: Taxpayer Services
500 Deaderick Street
Nashville, Tennessee 37242
Phone: (615) 253-0704 For Technical Assistance
1-866-368-6374 (In State Toll-Free)
E-mail: TN.Revenue@state.tn.us

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Why do I need to pay sales tax on merchandise purchased out of state?
The state sales and associated use tax is the largest source of funding for Tennessee state government. The Department of Revenue is concerned that increasing use of the Internet and catalog sales could mean lost sales and tax revenue on purchases from out-of-state vendors.

Tennessee, like other states that impose a sales tax, also taxes the use of property that is brought into the state untaxed when purchased. This "use" tax was enacted in 1947, the same year as the sales tax, to complement the sales tax by taxing merchandise purchased from out-of-state sources that do not collect the state’s sales tax. The use tax is designed to raise revenue and to protect local merchants, who must collect the sales tax, from unfair competition from out-of-state sellers who do not collect Tennessee’s sales tax. Effective January 1, 2009, the local use tax rate on purchases or downloads of digital videos, digital books, and digital music, as defined in Tenn. Code Ann. Section 67-6-102, is established at 2.50% regardless of the actual local tax rate in effect in the jurisdiction of the user and consumer.

We urge you to report your tax liability.

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What are the tax rates?
The use tax rate is a combination of the state tax rate of 7% (6% on food or food ingredients) plus the rate levied by your local government, generally 2.25%. (See local government tax rate chart.) The tax is applied to the purchase price of the merchandise plus any shipping and handling charges that the merchant adds to your bill.

The local rate is applicable on the first $1600 dollars of the purchase price of any single article. Effective July 1, 2002, there is a state single article rate of 2.75% that is applicable to the purchase price amount of any single article purchase from $1600.01 to a maximum of $3200.

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When is the return due?
You must file the consumer use tax return and pay the taxes at least annually. You may also file monthly, quarterly, or semiannually. The return is due on the 20th of the month following the close of the applicable period. For example, if you file annually, the return is due on January 20. If you are filing quarterly, returns are due on April 20, July 20, October 20, and January 20 of the following year. For your convenience, if you are reporting use tax on items, some of which are taxed at the 6% state rate and others that are taxed at the 7% rate, you may wish to file a separate return for each state tax rate.

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What is the maximum payment I can make online?

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.

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Is all the information I provide confidential?

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.]

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