2023 Tennessee Code › Title 67 - TAXES AND LICENSES (§§ 67-1-101 — 67-10-107) › Chapter 4 - PRIVILEGE AND EXCISE TAXES (§§ 67-4-101 — 67-4-3206) › Part 7 - BUSINESS TAX ACT (§§ 67-4-701 — 67-4-730) › Section 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

(a)
(1)
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:
(A)
The sale of tangible personal property that is shipped or delivered to a location in this state;
(B)
The sale of a service that is delivered to a location in this state;
(C)
The leasing of tangible personal property that is located in this state; or
(D)
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.
(2)
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
.
(b)
(1)
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)
.
(2)
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.
(3)
Notwithstanding subdivision (b)(1), compensation of more than one hundred thousand dollars ($100,000) 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)(ii)
and the tax on such compensation shall be distributed to that county pursuant to §
67-4-724(a)
. Compensation of one hundred thousand dollars ($100,000) 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)
.
(c)
(1)
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
.
(2)
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.
(3)
Notwithstanding subdivision (c)(1), compensation of more than one hundred thousand dollars ($100,000) 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)(ii)
and such compensation shall be subject to the tax, if any, that is levied by such incorporated municipality. Compensation of one hundred thousand dollars ($100,000) 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
.
Amended by 2023 Tenn. Acts, ch. 377,s 8, eff. 5/11/2023, app. to tax years ending on or after December 31, 2023.
Amended by 2023 Tenn. Acts, ch. 377,s 7, eff. 5/11/2023, app. to tax years ending on or after December 31, 2023.
Amended by 2015 Tenn. Acts, ch. 514, s 5, eff. 1/1/2016.
Amended by 2014 Tenn. Acts, ch. 942,s 5, eff. 7/1/2014.
Added by 2013 Tenn. Acts, ch. 313, s 18, eff. 1/1/2014.