Tennessee § 67-4-717 - State and local privilege tax imposition for persons with a substantial nexus in the state and engaged in any vocation, occupation, business or business activity — Distributing state and local business tax.

§ 67-4-717. State and local privilege tax imposition for persons with a substantial nexus in the state and engaged in any vocation, occupation, business or business activity — Distributing state and local business tax.

Except as otherwise provided in this part, all persons with a substantial nexus in this state during the tax period and engaged in this state in any vocation, occupation, business, or business activity set forth as taxable under § 67-4-708(1)-(5), with or without establishing a physical location, outlet, or other place of business in the state, shall be subject to the tax levied by § 67-4-704. For purposes of this section, the phrase “engaged in this state” shall include, but not be limited to, any of the following: The sale of tangible personal property that is shipped or delivered to a location in this state; The sale of a service that is delivered to a location in this state; The leasing of tangible personal property that is located in this state; or Making sales as a natural gas marketer to customers located within this state through the presence in this state of the seller's property, through the holding of pipeline capacity by the seller on pipelines located in this state, or through the presence in this state of the seller's employees, agents, independent contractors, or other representatives acting on behalf of the seller to solicit orders, provide customer service, or conduct other activities in furtherance of such sales. For purposes of this subdivision (a)(1)(D), the phrase “presence in this state of the seller's property” shall include property owned by the seller in this state during delivery to the customer, whether in a pipeline or otherwise. All persons that are subject to the tax levied by § 67-4-704 and have a physical location, outlet, or other place of business within a municipality in this state shall be subject to the tax levied by § 67-4-705. Persons that do not have a physical location, outlet, or other place of business within a municipality in this state shall not be subject to the tax levied by § 67-4-705. For purposes of distributing the state business tax as provided in § 67-4-724(a), receipts from sales made by a person subject to the tax levied by § 67-4-704 shall be sourced to the county in which the person's established physical location, outlet, or other place of business is located. Receipts from sales made by persons operating from an established physical location, outlet, or other place of business in one (1) county who extend their operations into other counties without establishing a physical location, outlet, or other place of business therein shall be sourced to the county in which the person's established physical location, outlet, or other place of business is located. If the person has no established physical location, outlet, or other place of business in the state, then such receipts shall be sourced to the state and the taxes shall be earmarked and allocated to the state's general fund in accordance with § 67-4-724(a)(5). Notwithstanding subdivision (b)(1), receipts from all taxable sales of any services or tangible personal property by a provider of video programming services, as defined in § 67-6-102, shall be sourced to the county where the property or service is received by the customer, regardless of whether the provider has a physical location, outlet, or other place of business in that county. Notwithstanding subdivision (b)(1), compensation of more than fifty thousand dollars ($50,000) from contracts performed in one (1) county by a person described in § 67-4-708(4)(A) shall be sourced to that county as provided in § 67-4-709(4)(A)(i) and the tax on such compensation shall be distributed to that county pursuant to § 67-4-724(a). Compensation of fifty thousand dollars ($50,000) or less from contracts performed in one (1) county by a person described in § 67-4-708(4)(A) shall be sourced to the county of such person's domicile or location. If such person does not have a domicile or location in the state, such compensation shall be earmarked and allocated to the state's general fund in accordance with § 67-4-724(a)(5). For purposes of levying the tax set forth in § 67-4-705, receipts from sales made by a person subject to the tax levied by § 67-4-705 shall be sourced to the incorporated municipality in which the person's established physical location, outlet, or other place of business is located and shall be subject to the tax, if any, that is levied by such incorporated municipality. Receipts from sales made by persons operating from an established physical location, outlet, or other place of business in one (1) incorporated municipality who extend their operations outside the boundaries of the incorporated municipality that levied the tax without establishing a physical location, outlet, or other place of business outside such incorporated municipality shall be sourced to the incorporated municipality in which the person's established physical location, outlet, or other place of business is located and shall be subject to the tax, if any, that is levied by such incorporated municipality. If the person has no established physical location, outlet, or other place of business in the state, then such receipts shall not be subject to tax under § 67-4-705. Notwithstanding subdivision (c)(1), receipts from all taxable sales of any services or tangible personal property by a provider of video programming services, as defined in § 67-6-102, shall be sourced to the incorporated municipality where the property or service is received by the customer, regardless of whether the provider has a physical location, outlet, or other place of business in that incorporated municipality. Notwithstanding subdivision (c)(1), compensation of more than fifty thousand dollars ($50,000) from contracts performed in one (1) incorporated municipality by a person described in § 67-4-708(4)(A) shall be sourced to that incorporated municipality as provided in § 67-4-709(4)(A)(i) and such compensation shall be subject to the tax, if any, that is levied by such incorporated municipality. Compensation of fifty thousand dollars ($50,000) or less from contracts performed in one (1) incorporated municipality by a person described in § 67-4-708(4)(A) shall be sourced to the incorporated municipality of such person's domicile or location; provided, if such person does not have a domicile or location in the state, such compensation shall not be subject to tax under § 67-4-705. Acts 2013, ch. 313, § 18; 2014, ch. 942, § 5; 2015, ch. 514, § 5. Compiler's Notes. Former § 67-4-717 (Acts 1971, ch. 387, § 7; modified; Acts 1972, ch. 850, § 7; 1973, ch. 172, § 1; 1973, ch. 208, §§ 1, 2; 1977, ch. 314, § 1; T.C.A., § 67-5807; Acts 1989, ch. 16, § 1), concerning fees for collecting or recording taxes, was repealed by Acts 2009, ch. 530, § 85, effective July 1, 2009. Acts 2013, ch. 313, § 1 provided that the act, which enacted this section, shall be known and may be cited as the “Uniformity and Small Business Relief Act of 2013.” Acts 2013, ch. 313, § 23 provided that the act, which enacted this section, shall apply to tax periods that begin on or after January 1, 2014. Acts 2014, ch. 942, § 8 provided that the act shall apply to tax periods that begin on or after July 1, 2014. Acts 2015, ch. 514, § 1 provided that the act shall be known and may be cited as the “Revenue Modernization Act”. For the Preamble to the act concerning the need to modernize the sales and use taxes, franchise and excise taxes and business tax in the state to address the engagement in business within the state by out-of-state companies, see Acts 2015, ch. 514. Acts 2015, ch. 514, § 31 provided that the act, which rewrote (a), shall apply to all tax years beginning on or after January 1, 2016. Amendments. The 2014 amendment in the first sentence of (a) substituted “§ 67-4-708(1) -(5)” for “§ 67-4-708(1) -(4)” and added (a)(5). The 2015 amendment rewrote (a), which read: “(a) Any person engaged in this state in any vocation, occupation, business, or business activity enumerated, described, or referred to in § 67-4-708(1) -(5) without establishing a physical location, outlet, or other place of business in the state shall be subject to the tax levied by § 67-4-704 and shall be exempt from the tax levied by § 67-4-705 . For purposes of this section, the term "engaged in this state" shall be limited to the following activities:“(1) Performing any service in this state, to the extent such service is received by a customer located in the state;“(2) Leasing tangible personal property that is located in this state;“(3) Delivering tangible personal property to a buyer in this state, when delivered by the seller in the seller's own vehicle;“(4) Purchasing and subsequently selling tangible personal property in this state in a wholly in-state transaction, where the purchase and subsequent sale are accomplished through the presence in this state of the seller's employees, agents, or independent contractors acting on behalf of the seller; and“(5) Making sales as a natural gas marketer to customers located within this state through the presence in this state of the seller's property, the holding of pipeline capacity by the seller on pipelines located in this state, or through the presence in this state of the seller's employees, agents, independent contractors, or other representatives acting on behalf of the seller to solicit orders, provide customer service, or conduct other activities in furtherance of such sales. For purposes of this subdivision (a)(5), the phrase “presence in this state of the seller's property” shall include property owned by the seller in this state during delivery to the customer, whether in a pipeline or otherwise.” Effective Dates. Acts 2013, ch. 313, § 23. January 1, 2014. Acts 2014, ch. 942, § 8. July 1, 2014. Acts 2015, ch. 514, § 31. January 1, 2016.