(a) When a purchaser claims an exemption:

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Terms Used In Tennessee Code 67-6-409

  • 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
  • Certified service provider: means an agent certified under the Streamlined Sales and Use Tax Agreement to perform all of the seller's sales and use tax functions, other than the seller's obligation to remit tax on its own purchases. See Tennessee Code 67-6-102
  • Commissioner: means and includes the commissioner of revenue or the commissioner's duly authorized assistants. See Tennessee Code 67-6-102
  • Electronic: means relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities. 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
  • 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
  • Use tax: includes the "use" "consumption" "distribution" and "storage" as defined in this section. See Tennessee Code 67-6-102
(1) The seller or certified service provider shall obtain identifying information of the purchaser and the reason for claiming a tax exemption at the time of the purchase in accordance with the rules and regulations promulgated by the commissioner. The identifying information shall include: name, address, type of business, reason for exemption and a tax identification number issued by this state or other governmental authority as required by the commissioner;
(2) The seller or certified service provider shall obtain either a copy of the purchaser’s authorization for exemption issued by the commissioner or obtain, either in paper or electronic medium, a fully completed Streamlined Sales Tax certificate of exemption as approved by the governing board of the Streamlined Sales and Use Tax Agreement. The seller or certified service provider is not required to obtain a purchaser’s signature for an electronic form of a certificate of exemption; however, the seller or certified service provider shall obtain from the purchaser all other information for proof of a claimed exemption regardless of the medium in which the transaction occurred;
(3) The commissioner may utilize a system in which purchasers qualifying to make tax exempt purchases are issued an identification number that must be presented to the seller at the time of the sale; and
(4) The seller and certified service provider shall maintain proper records of exempt transactions and provide them to the commissioner when requested.
(b)

(1) Sellers and certified service providers that follow the requirements of this section are not liable for the tax imposed by this chapter otherwise applicable, if it is determined that the purchaser improperly claimed an exemption, in which case the purchaser shall be liable for the tax. In the event a seller has a recurring business relationship with a purchaser, the seller and certified service provider are relieved from the tax imposed by this chapter, if the seller has obtained a blanket exemption certificate from the purchaser. A seller and a certified service provider shall not be required to update or renew blanket exemption certificates when there is a recurring business relationship.
(2) The seller or certified service provider shall remain liable for the tax if the purchaser claims an entity-based exemption and the subject of the transaction sought to be covered by the exemption certificate is actually received by the purchaser at a location operated by the seller in this state, and the standard exemption certificate clearly and affirmatively indicates the claimed exemption is not available in this state.
(3) For purposes of subdivision (b)(1), a “recurring business relationship” means at least one (1) sale transaction within a period of twelve (12) consecutive months.
(c) Sellers or certified service providers that do not follow the requirements of this section shall be liable for the tax.
(d) Sellers that fraudulently fail to collect tax or that solicit a purchaser to participate in the unlawful claim of an exemption shall be liable for the tax.
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