Around 60% of Tennessee’s general fund comes from the state’s sales tax, making it a significant source of funding. Most tangible personal property sales, including sales of products, certain services, and rentals, are subject to the tax. But who covers Tennessee’s sales tax?
Sales tax on purchases is often the responsibility of the final customer. This implies that you will be charged sales tax at the point of sale if you purchase a new pair of shoes or a television. The location and the kind of item being sold determine the Tennessee sales tax rate.
Tennessee will have a 7% state sales tax as of 2021. Local sales taxes, however, can raise the rate by an extra 2.75% in some places, reaching a maximum of 9.75%. This means that sales tax can have a substantial impact, particularly on expensive items.
Certain people or companies might, however, occasionally be excluded from paying sales tax. For instance, certain purchases made by government agencies and nonprofit organizations may not be subject to sales tax. Additionally, some things, including food and prescription medicines, could not even be subject to sales tax.
If you own a company in Tennessee, you might need to collect sales tax from your clients and send it to the government. However, you might be able to get a resale certificate if you’re buying things to sell so you can avoid paying sales tax on them.
Do Tennessee resale certificates have an expiration date? They do, indeed. Resale certificates are valid in Tennessee for four years after the date of issuance. To continue making purchases tax-free for resale after that point, you’ll need to get a new certificate.
You can use the Tennessee Department of Revenue’s website to search for a Tennessee resale certificate if you need to. To obtain the information, just type in the certificate number or the name of the company that issued the certificate.
Last but not least, it’s important to keep in mind that some states, like Washington, may accept out-of-state resale certificates. This, however, varies according to the state and the particular situation. It’s crucial to review the laws and norms in each state before conducting cross-state business to ensure compliance.