Sales Tax Obligations of Purchasers in Tennessee

April 13, 2006

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Tennessee imposes various requirements on purchasers doing business in Tennessee. We recommend that you go through the items below to help you with the most frequently asked questions concerning purchasers and sales and use tax issues.

Tax exemption certificates. An exemption certificate may be issued by a purchaser of a nontaxable item. The exemption certificate may be based on the type of transaction (such as a resale exemption) or on the item itself.

Resale exemptions. Sales made under a certificate of resale are not subject to the sales tax. Sellers must obtain a certificate of resale from you, the purchaser, in order to not collect the sales tax. The Commissioner may revoke the seller's registration certificate and assess the sales or use tax on the seller if the seller knew, or should have known, that the merchandise obtained with the certificate was not the sort normally sold by you in the usual course of business.

Resale exemption certificate. You may use the Tennessee Blanket Certificate of Resale or the Multistate Tax Commission's uniform sales and use tax certificate. You may claim the resale exemption by providing a seller with a resale certificate that includes:

your signature as the purchaser
your name and address
your sales tax license number
a description of the types of tangible personal property and services being purchased for resale

Blanket resale certificates. Sellers may accept blanket certificates from you as a purchaser if you repeatedly purchase the same type of property or service for processing or resale. However, blanket certificates may not be used to purchase property or services not covered by a blanket certificate. The Tennessee Blanket Certificate of Resale that includes the information noted above for a resale certificate is used by purchasers to claim the resale exemption.

Purchases from out-of-state vendors. Property brought into Tennessee on which a sales or use tax has been paid in another state equal to or in excess of the Tennessee tax is not subject to tax in Tennessee.