Tennessee State Tax Rulings
Free plain-English summaries of state tax letter rulings and advisory opinions issued in Tennessee, with full citations and the original source on every page.
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Which med-spa treatments, products, and memberships are subject to Tennessee sales and use tax?
It splits three ways. Prescription drugs for human use are exempt: IV nutrition therapy, injectable neurotoxins (Botox), dermal fillers, the chemical solution in medium-to-deep skin peels, and hyperba…
Is a flat subscription fee for a mobile health-tracking app, bundled with a blood-pressure monitor and support, subject to Tennessee sales tax?
Yes — it's taxable. A flat annual subscription to a mobile heart-health program is subject to Tennessee sales tax because, applying the true-object test, what the customer is really buying is remotely…
Are the computers, software, and related equipment a Tennessee manufacturer uses to run its production lines exempt from sales tax as industrial machinery?
Mostly yes for the systems that actually run the production lines. For a manufacturer, the computer hardware and software used to monitor and control production — line-optimization (MLO) and quality/s…
Which quality-assurance testing machines and supplies used by a Tennessee food manufacturer qualify for the industrial machinery exemption?
It depends on when the testing happens. For a manufacturer, equipment and supplies used to test the product during manufacturing are exempt: in-process testing equipment (metal detectors, fat analyzer…
Is the equipment and supplies a Tennessee manufacturer uses to treat its incoming process water and its wastewater exempt from sales tax as pollution control facilities?
It depends on which side of the process the item is on. For a manufacturer, the equipment that treats the wastewater the plant discharges — equalization tanks, pumps, circulators, feed pumps, instrume…
Which freezing-plant machinery, equipment, and supplies qualify for Tennessee's industrial machinery exemption for a frozen-food manufacturer?
Mostly yes. For a frozen-food manufacturer, Tennessee's industrial machinery exemption covers the freezing system (freezers, compressors, evaporators, refrigerant/ammonia, chillers, piping/controls/va…
Can a contractor expanding a municipal water-treatment plant buy the treatment piping exempt from Tennessee sales and use tax as industrial machinery?
Yes — the process piping is exempt. A municipal water utility that draws river water and treats it into drinking water sold to customers is a 'manufacturer' for Tennessee tax purposes (water is tangib…
Are repair services performed in Tennessee on equipment that is then shipped to an out-of-state customer subject to Tennessee sales tax?
It changed on July 1, 2024. Before then, repairing tangible personal property in Tennessee was a taxable service even if the repaired item was shipped back to an out-of-state customer, and the shippin…
Are streetlights, photocells, smart nodes, and poles a contractor installs for a public power authority subject to Tennessee sales and use tax?
No — they're exempt. When a contractor buys and installs streetlights, photocells, smart nodes, and poles as part of an electric distribution system owned or operated by a Tennessee government body (a…
Does a company that sells automotive window information labels to car dealers have to charge Tennessee sales tax on them?
No — the labels are exempt. A company that sells auto-window information labels (warranty, fuel-economy, and similar vehicle data) to car dealers does not have to charge Tennessee sales tax on them. T…
Are on-hold telephone messaging, digital video-signage programming, and overhead music services subject to Tennessee sales tax, and does the provider owe use tax on the equipment it hands customers for free?
They're taxable. The Department ruled (in an advisory, non-binding revenue ruling) that a provider's On-Hold Messaging, VideoCast (digital video-signage) Programming, and Overhead Music services are a…
A company imports printed gift cards into a Tennessee warehouse and ships them to restaurants and retailers across the country. Does it owe Tennessee sales or use tax on the cards, and can it buy them tax-free for resale?
It depends on where the cards end up. The company imports printed gift cards from an out-of-state vendor, stores them in a third-party Tennessee warehouse, and ships them to its restaurants and retail…
If a company has advertising materials printed out of state and ships them to its own Tennessee distribution center before sending them on to retail locations across the country, does it owe Tennessee use tax on all of them, just the ones that end up in Tennessee, or none at all?
Only the materials that end up distributed within Tennessee are taxed. The Department ruled that printed advertising materials manufactured out of state and shipped to the Taxpayer's Tennessee distrib…
Is a computer software maintenance contract sold to a Tennessee customer taxable, and does it matter where the vendor and customer are located or where repairs are performed?
Yes, sourced by computer location, not contract-signing location. The Department ruled that whether a computer software maintenance contract is subject to Tennessee sales tax depends entirely on WHERE…
Does an out-of-state printer of clinical research materials have to collect Tennessee use tax on products it warehouses out of state and ships to Tennessee pharmaceutical customers months or years after the sale, and does that extend to shipping and handling charges?
Yes, if the taxpayer has Tennessee nexus: use tax is owed on the initial shipment and on every later shipment to a Tennessee customer, collected when each shipment actually goes to Tennessee (with cre…
Is a monthly application-service-provider (ASP/SaaS) hosting fee, and its bundled add-on services like database setup, installation, bank reconciliation, and training, subject to Tennessee sales tax — and does the taxpayer owe use tax on the software licenses and hosting services it buys to run the ASP business?
The monthly ASP fee and related standalone services (database setup, bank reconciliation, training) are not subject to Tennessee sales tax as long as they're billed separately, but on-site installatio…
Is a publisher's weekly newsprint publication exempt from Tennessee sales and use tax, and is its separate free annual publication also exempt?
Split result. The weekly publication is exempt from Tennessee sales and use tax because it's printed entirely on newsprint and distributed at least every 14 days, but the annual publication is taxable…
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These are official tax letter rulings and advisory opinions issued by Tennessee's revenue authority in response to questions from specific taxpayers about how the tax law applies to their facts. A ruling is binding on the department only for the taxpayer who requested it and cannot be relied on by anyone else, but it is strong evidence of how the state reads the law. Every ruling above has a plain-English question and short answer, plus a link to the full original source.