[Effective 7/1/2024]

(a) The sale, including lease or rental, of a product made from a place of business within the physical limits of this state where delivery is made by the seller or lessor to a purchaser or lessee within the physical limits of this state, or to a carrier or United States postal service location for delivery to a place within the physical limits of this state, is sourced to the seller’s or lessor’s place of business in this state.
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Terms Used In Tennessee Code 67-6-903

  • Business: includes occasional and isolated sales or transactions of aircraft, vessels, or motor vehicles between corporations and their members or stockholders and also includes such transactions caused by the merger, consolidation, or reorganization of corporations. See Tennessee Code 67-6-102
  • Computer: means an electronic device that accepts information in digital or similar form and manipulates it for a result based on a sequence of instructions. See Tennessee Code 67-6-102
  • Computer software: means a set of coded instructions designed to cause a computer or automatic data processing equipment to perform a task. See Tennessee Code 67-6-102
  • Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
  • Lease or rental: includes agreements covering motor vehicles and trailers where the amount of consideration may be increased or decreased by reference to the amount realized upon sale or disposition of the property as defined in 26 U. See Tennessee Code 67-6-102
  • Personal property: All property that is not real property.
  • Personal property: includes money, goods, chattels, things in action, and evidences of debt. See Tennessee Code 1-3-105
  • Property: includes both personal and real property. See Tennessee Code 1-3-105
  • Sale: includes the furnishing of any of the things or services taxable under this chapter. See Tennessee Code 67-6-102
  • Software: means computer software. See Tennessee Code 67-6-102
  • State: when applied to the different parts of the United States, includes the District of Columbia and the several territories of the United States. See Tennessee Code 1-3-105
  • Tangible personal property: includes electricity, water, gas, steam, and prewritten computer software. See Tennessee Code 67-6-102
  • United States: includes the District of Columbia and the several territories of the United States. See Tennessee Code 1-3-105
  • Use: means and includes the exercise of any right or power over tangible personal property incident to the ownership thereof, except that it does not include the sale at retail of that property in the regular course of business. See Tennessee Code 67-6-102
(b) The location of where the purchaser may take or use the product is not determinative of where the sale is sourced.
(c) For the sale of a product made from a place of business within the physical limits of this state that is delivered by the seller to the purchaser or the purchaser’s designee outside the physical limits of this state or to a carrier for delivery to a place outside the physical limits of this state, the sale is not sourced to this state.
(d) For a lease or rental of property, excluding transportation equipment as defined in § 67-6-902(b)(1), delivered to the lessee or renter in this state that requires recurring periodic payments, the periodic payments made subsequent to the first payment that cover periods where the primary property location is no longer within the physical limits of this state are not sourced to this state. The lessor is not liable for the tax imposed under this chapter on the periodic payments that cover periods where the primary property location is no longer in this state. The primary property location is determined in accordance with § 67-6-902(b)(2)(B).
(e) For the sale of repairing of tangible personal property or computer software; laundering or dry cleaning of tangible personal property; and installing of tangible personal property that remains tangible personal property after installation; and installing of computer software, made from a place of business within the physical limits of this state where the serviced tangible personal property or computer software is delivered by the seller to the purchaser or the purchaser’s designee outside the physical limits of this state or to a carrier for delivery to a place outside the physical limits of this state, the sale is not sourced to this state.
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