[Effective 7/1/2024]

(a) For purposes of this section:

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Terms Used In Tennessee Code 67-6-904

  • 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
  • Direct mail: includes tangible personal property supplied directly or indirectly by the purchaser to the direct mail seller for inclusion in the package containing the printed material. See Tennessee Code 67-6-102
  • Person: includes any individual, firm, co-partnership, joint venture, association, corporation, estate, trust, business trust, receiver, syndicate, any governmental agency whose services are essentially a private commercial concern, or other group or combination acting as a unit, in the plural as well as the singular number. See Tennessee Code 67-6-102
  • Sale: includes the furnishing of any of the things or services taxable under this chapter. See Tennessee Code 67-6-102
  • Sales price: includes consideration received by the seller from third parties, if:
    (i) The seller actually receives consideration from a party other than the purchaser, and the consideration is directly related to a price reduction or discount on the sale. 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
  • United States: includes the District of Columbia and the several territories of the United States. See Tennessee Code 1-3-105
(1) “Advertising and promotional direct mail” means printed material that is direct mail, for which the primary purpose is to attract public attention to a product, person, business, or organization, or to attempt to sell, popularize, or secure financial support for a product, person, business, or organization;
(2) “Direct mail” has the same meaning as defined in § 67-6-102;
(3) “Other direct mail”:

(A) Means direct mail that is not advertising and promotional direct mail regardless of whether advertising and promotional direct mail is included in the same mailing; and
(B) Includes, but is not limited to:

(i) Transactional direct mail that contains personal information specific to the addressee, including, but not limited to, invoices, bills, statements of account, and payroll advices;
(ii) Any legally required mailings, including, but not limited to, privacy notices, tax reports, and stockholder reports; and
(iii) Other nonpromotional direct mail delivered to existing or former shareholders, customers, employees, or agents, including, but not limited to, newsletters and informational pieces; and
(C) Does not include the development of billing information or the provision of a data processing service that is more than incidental; and
(4) “Product” means tangible personal property, a product transferred electronically, or a service.
(b) The sale of direct mail is sourced as follows:

(1) For the sale of advertising and promotional direct mail and other direct mail made from a place of business in this state to a purchaser where delivery is made by the seller to a carrier or United States postal service location for distribution or delivery to direct mail recipients within the physical limits of this state, the sale is sourced to the seller’s place of business;
(2) To the extent the seller knows based on information provided by the purchaser showing the jurisdictions to which the direct mail will be delivered to recipients in another state, the portion of the sales price that equals the percentage of direct mail delivered to recipients in another state is not sourced to this state;
(3) In lieu of providing the delivery information in accordance with subdivision (b)(2), a purchaser may provide the streamlined certificate of exemption to claim the direct mail exemption for the portion of the sales price that equals the percentage of direct mail delivered to recipients in another state; and
(4) In the absence of bad faith, where the seller sourced the sale according to the delivery information provided by the purchaser in accordance with this section, the seller is not liable for tax if it is determined the purchaser provided incorrect delivery information.
(c) This section does not impose tax on billing services or data processing services.
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