Tennessee: Governor Signs Marketplace Facilitators Sales Tax Law, Effective October 1, 2020


A new Marketplace Facilitators Sales Tax bill was signed by Governor Bill Lee on April 1, 2020, and will go into effect on October 1, 2020.

The new bill, Public Chapter 646, requires marketplace facilitators that make or facilitate more than $500,000 in sales to Tennessee customers during the previous 12-month period to collect and remit Tennessee sales tax on sales made by third-party sellers to Tennessee customers. The purpose of this new Tennessee law is to expressly require marketplace facilitators to be responsible for collecting and remitting sales tax unless specifically relieved from that obligation under the terms of this law.

As stated in the bill, “When a marketplace seller uses a marketplace facilitator to facilitate sales of tangible personal property or any of the things or services taxable under this chapter, the marketplace facilitator is liable for the taxes imposed by this chapter on the sales price of the tangible personal property or the things or services taxable under this chapter regardless of whether the marketplace seller has a sales tax certificate of registration or would have been required to collect sales or use taxes had the sale not been facilitated by the marketplace facilitator.”

Unless:

(1) The marketplace facilitator made or facilitated total sales to consumers in this state of five hundred thousand dollars $500,000 or less during the previous twelve-month period;

(2) The marketplace facilitator demonstrates, to the satisfaction of the commissioner, that substantially all of the marketplace sellers for whom the marketplace facilitator facilitates sales are registered dealers under this section, in which case the commissioner is authorized to waive the requirements of this subsection (f). If a waiver is granted pursuant to this subdivision (f)(2), the taxes levied under this chapter shall be collectible from the marketplace sellers; or

(3) The marketplace facilitator and the marketplace seller contractually agree that the marketplace seller will collect and remit all applicable taxes under this chapter.


For more information: Department of Revenue

Tennessee Department of revenue
April 28, 2020