Tennessee § 67-6-537 - Release from liability for sales or use taxes for certain sellers — Exceptions.

§ 67-6-537. Release from liability for sales or use taxes for certain sellers — Exceptions.

This section applies to sellers who satisfy all of the following requirements: The seller registers to pay or to collect and remit applicable sales or use tax on sales made to purchasers in this state, in accordance with the terms of the Streamlined Sales and Use Tax Agreement within twelve (12) months of the effective date of this state's becoming a member in substantial compliance with the agreement; During the twelve-month period preceding the state's becoming a member in substantial compliance with the agreement, the seller was not registered to collect and remit tax under this chapter; or During the twelve-month period preceding the state's becoming an associate member of the agreement, the seller was not registered to collect and remit tax under this chapter; and There is no audit or assessment pending with respect to the seller, and the department has not notified the seller that it will be the subject of an audit. A seller who satisfies the criteria set out in subsection (a) is not liable for sales or use tax not collected from its customers prior to the date of its registration, nor liable for any related interest or penalty, subject to the limitations contained in subsection (c). A seller remains liable for tax collected from its customers but not remitted to the state, and remains liable for any related interest and penalty. A seller remains liable for any use tax due that arises from its capacity as a buyer and user or consumer of taxable items. The release from liability provided by subsection (b) is void, unless the seller maintains its registration and continues to collect and remit applicable sales and use taxes for at least thirty-six (36) months. The statute of limitations provided in § 67-1-1501 is tolled during the thirty-six month period. Fraud or intentional misrepresentation of a material fact voids the release from liability provided by subsection (b). A dealer or certified service provider shall not have any additional liability for state or local option taxes imposed by this chapter, if the taxpayer or certified service provider charged and collected or remitted an incorrect amount of sales or use tax in reliance on erroneous data in the taxability matrix provided by the department pursuant to § 328(A) of the Streamlined Sales and Use Tax Agreement. The erroneous data in the taxability matrix provided by the department shall be the most recent published information utilized by the taxpayer or certified service provider that is effective on the date of the transaction. Taxpayers and certified service providers shall provide records evidencing reliance on the erroneous data. Section 328(A) does not apply to errors in charging and collecting or remitting sales or use tax that are the result of classifying the item or transaction within a defined term or defined category included in the taxability matrix. Acts 2003, ch. 357, § 61; 2004, ch. 959, §§ 22, 68; 2005, ch. 311, §§ 1, 2; 2005, ch. 499, §§ 65, 66; 2007, ch. 602, §§ 51, 114. Compiler's Notes. Acts 2007, ch. 602, § 51 provided that Acts 2003, ch. 357, § 61, as amended by Acts 2004, ch. 959, §§ 22, 68, as amended by Acts 2005, ch. 311, §§ 1, 2, is repealed in its entirety, effective June 28, 2007. Acts 2007, ch. 602, § 53 provided that Acts 2005, ch. 499, § 66 is repealed in its entirety. Section 328(A) of the Streamlined Sales and Use Tax Agreement, referred to in this section, provides: “To ensure uniform application of terms defined in the Library of Definitions each member state shall complete a taxability matrix adopted by the governing board. The member state’s entries in the matrix shall be provided and maintained in a database that is in a downloadable format approved by the governing board. A member state shall provide notice of changes in the taxability of the products or services listed in the taxability matrix as required by the governing board.” Section 328(A), as amended through December 19, 2017, provides: “A. Taxability Matrix (1) Library of Definitions (Library): To ensure uniform application of terms defined in the Library adopted by the Governing Board pursuant to Section 327, each member state shall complete, to the best of its ability, the section of the taxability matrix titled “Library of Definitions”. (2) Tax Administration Practices: To inform the general public of its practices regarding certain tax administration practices as selected by the Governing Board pursuant to Section 335, each member state shall complete, to the best of its ability, the section of the taxability matrix titled “Tax Administration Practices”. The Streamlined Sales and Use Tax Agreement, as amended through December 19, 2017, may be found on the website of the Streamlined Sales Tax Governing Board, Inc., at http://www.streamlinedsalestax.org/.