Tennessee Gov. Bill Haslam has signed legislation that codifies the terms of an agreement between the state and Amazon, under which the company agreed to collect Tennessee sales and use tax beginning in 2014. The bill provides that the activities of distribution facilities operated by a company’s affiliates in Tennessee are not considered in determining whether the company has a physical presence in the state sufficient to establish nexus for sales and use tax purposes. The company is required to provide notice of use tax liability to Tennessee purchasers. The company must also send each Tennessee purchaser an annual statement of the total sales made to the purchaser during the preceding calendar year. The provisions will be repealed on the earliest of: January 1, 2014; upon an affiliate’s failure to satisfy investment or job creation requirements; or the effective date of any federal legislation that authorizes the state to require remote sellers to collect tax.
H.B. 2370, Laws 2012, effective March 26, 2012