Once your business has a Tennessee sales tax license and begins to make sales, you are required to start collecting sales taxes on behalf of the Tennessee government and filing regular sales tax returns. This page will help you understand the basics of your tax collection and filing responsibilities.
If the seller has an in state location in the state of Tennessee, they are legally required to collect sales tax at the rate of the their own location, where the sale was made, as Tennessee is an origin based sales tax state.
If the seller's location is out of state, and the seller has tax nexus, then the state of Tennessee gives the seller two options. You could collect the sales tax at the buyer's local sales tax rate, following a destination based sales tax sourcing plan, or you are allowed to charge a flat rate of 9.25%.
Tennessee allows merchants to keep a small percentage of the sales tax they collect as a collection discount, which serves as compensation for the work required to comply with the Tennessee sales tax regulations
While there are no collection discounts, it must be noted that out-of-state taxpayers who file voluntarily are allowed to apply a 2% discount for the first two thousand and five hundred dollars and a 1.15% discount for the excess amount collected.
To file sales tax in Tennessee, you must begin by reporting gross sales for the reporting period, and calculate the total amount of sales tax due from this period.
The state of Tennessee provides all taxpayers with two choices for filing their taxes. One option is to file online by using the Tennessee Department of Revenue online service. the other option is the online system AutoFile. Both of these online systems also allow the taxpayer to remit payment online as well..
Tax payers should be aware of a late filing of state and local sales taxes penalty of 5% of the tax due for each month or fraction of a month that it is late. The maximum compounded percentage penalty is 25%. The minimum penalty payment is fifteen dollars. If filed late, the interest can be calculated at 7.25% of the tax per year.
The state of Tennessee requires that every seller who owns a sales tax permit to file a sales tax return on the required day, even if it is a "zeroes-out" tax return, and there is nothing to report.
Your business's sales tax return must be filed by the 20th of the month following reporting period. For a list of this year's actual due dates, see our calendar of Tennessee sales tax filing due dates.
Tennessee supports electronic filing of sales tax returns, which is often much faster than filing via mail.
E-filing is required if your average sales tax liability is $500 or more, and is optional for other taxpayers.
Tennessee allows businesses to make sales tax payments electronically via the internet.
Electronic payments are required if the owed tax is required to be paid in connection with a return that is at least one thousand dollars. As of January first, 2013, electronic payment is required if taxpayer's average sales tax liability is at least five hundred dollars.
You can process your required sales tax filings and payments online using the official Tennessee Sales and Use Tax Online Filing website, which can be found here . You should have received credentials to access your Tennessee Sales and Use Tax Online Filing account when you applied for your Tennessee sales tax license.
While it is highly recommended that you file online using the Tennessee Sales and Use Tax Online Filing website, it is possible to file your required sales tax reportings offline using Tennessee filing frequency, which you can download and print here . Once you have completed your required reportings, you can mail it to the state at this address:
Tennessee Sales Tax Filing Address: Tennessee Department of Revenue
Andrew Jackson State Office Building
Nashville, Tennessee 37242
Taxpayers may also file Tennessee sales tax returns by completing and mailing Form SLS 450: State and Local Sales and Use Tax Return to the following address:
Tennessee Department of Revenue
Andrew Jackson State Office Building
Nashville, Tennessee 37242
Please note that if you file your Tennessee sales taxes by mail, it may take significantly longer to process your returns and payments.
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