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Encouraging News from Tennessee

Although Tennessee also has affiliate tax legislation pending the news there is encouraging. The bills, SB 1741 and HB 1947 are quite similar to NY Affiliate Tax law but the interpretation seems quite different. The Tennessee version allows for rebuttal but threshold is lower, just $2,000 in sales.

The most important comment is in the Fiscal Impact Report and that is where the encouraging news can be found.  From the Fiscal Impact Report (link at end of post)

• According to the Department of Revenue (DOR), out-of-state dealers with commissioned representatives in this state, who merely solicits sales for such dealers, and whereby customers pay dealers directly, does not make such dealers responsible for sales tax unless they have some form of traditional nexus in the state.

• DOR acknowledges that this bill seems to require out-of-state dealers to be responsible for sales tax and infer that the existence of the commissioned representatives creates a sufficient physical presence or nexus enabling the department to require registration of the dealer under certain circumstances. However, the Department has indicated that this bill alone would not be deemed sufficient for broadening the definition of traditional physical nexus in order for the department to require registration by such dealers. As a result, any increase to state revenue is considered to be not significant.

Find all information at SB 1741 and HB 1947 you have links to all the bill information including the Fiscal Impact Report.

It looks like good news from Tennessee. If the law passes it seems like it will have little impact on affiliates and out of state merchants.

{ 1 comment… add one }

  • Fred Waters March 15, 2010, 2:44 pm

    I recently moved from North Carolina to Tennessee because of the affiliate tax that passed and the subsequent termination of Amazon affiliates by the company.

    Previously Tennessee tabled the affiliate tax billed, feeling that the revenue would not justify the cost to affiliates in the state. Now that Colorado has passed a bill, and a number of states are considering it, I hope Tennessee will not reconsider voting on the bill, making my move to Tennessee an act of futility.

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