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Streamlined Sales Tax Delayed in Tennessee

Tennessee-State-Sign_GI-667575914-BW-MDTennessee’s road to becoming a full member of the Streamlined Sales Tax Governing Board is delayed by two years due to recent legislation passed by the Tennessee General Assembly. The new law pushes back the effective date of certain sales and use tax provisions which are required to comply with the Streamlined Sales and Use Tax Agreement (SSUTA). Now, these provisions are scheduled to be implemented July 1, 2021, a two year extension from the previous effective date of July 1, 2019.

The legislation (Public Chapter No. 602) specifically delays the following changes to Tennessee’s sales and use tax provisions that are required by SSUTA:

1) changes to the single article limitation on local option sales taxes;

2) use of a single sales and use tax return covering multiple dealer locations instead of a consolidated filing;

3) implementation of certain privilege taxes in lieu of sales tax; and

4) changes allowing an out-of-state dealer to use its foreign resale certificate for purchases resold and drop shipped to a Tennessee consumer.

The purpose of the Streamlined Sales and Use Tax Agreement is to simplify sales and use tax collection and administration for remote sellers by establishing uniform methods of compliance among multiple states. Currently, there are 23 Streamlined Sales Tax member states. Tennessee is the only associate member, which is defined as a state that is working toward becoming fully compliant and/or is waiting for certain statutes or rules to be effective in the state to qualify for full compliance.

The U.S. Supreme Court’s ruling in the South Dakota v. Wayfair case on June 21, 2018 resulted in a record number of remote sellers being required to collect and remit sales tax to multiple states because they meet new economic nexus requirements. These increased sales tax obligations re-focus attention on the pros and cons of the SSUTA.

For a complete list of states with economic nexus requirements, download our free chart:
Cherry Bekaert's Nexus ChartsVisit the Cherry Bekaert sales and use tax website for more information. 

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Lauren Stinson, CMI
Written by Lauren Stinson, CMI
As a Principal with Cherry Bekaert, Lauren serves as the National Leader for the Sales & Use Tax practice within the Firm’s State & Local Tax group. Based in Cherry Bekaert’s Atlanta practice, Lauren is an expert on sales and use tax issues that directly impact manufacturers, technology businesses and eCommerce sellers on the state and national levels.