Tennessee – In State Warehouse or Distribution Facility Creates Nexus

SALT Report 1134 – The Tennessee Attorney General has issued an opinion regarding out-of-State dealer’s nexus and in-state distribution centers.

A retailer who directly maintains or owns an in-state warehouse or distribution facility has sales and use tax nexus with the state. However, if the in-state facility is owned by a retailer’s subsidiary, nexus is established only if the subsidiary’s in-state activities are associated with the retailer’s ability to establish and maintain a sales market in Tennessee.

In situations where nexus can be established, the acceptance of electronic purchase orders by the retailer will not affect the retailer’s liability regarding the collection and remittance of Tennessee sales tax.

For Further Information:

Tennessee Attorney General Opinion No. 11-71