Tennessee Sales and Use Tax Return (Instructions)

Sales and Use Tax Return (Instructions)
sls450_instruct0723
INSTRUCTIONS: Tennessee Sales and Use Tax Return
These instructions apply to Tennessee’s sales and use tax return for periods beginning on or after July 1, 2023.
The due date for the sales and use tax return is the 20th of the month following the end of the reporting period.
Taxpayers are required to file this return electronically, and should submit online their fully completed return,
along with the amount from Line 23, by visiting the Department’s website at https://tntap.tn.gov/eservices.
Alternatively, they may mail the return and payment to the following address. Checks should be made out to the
Tennessee Department of Revenue.
Tennessee Department of Revenue
Andrew Jackson State Office Building
500 Deaderick Street
Nashville, TN 37242
Return - Round to the nearest whole dollar

Line 1: 	
             	
	
	

Enter the amount of all sales. Include: (a) cash sales, (b) credit sales, (c) conditional sales, (d) sales exempt 	
from tax, (e) leases and rentals of tangible personal property, (f)  charges for fabricating personal
property for consumers, (g) sales of specified digital products, and (h) taxable services.
Exclude: The amount of sales tax collected or accrued.

Line 2: 	 Enter the cost of all tangible personal property which was purchased from a dealer without the payment 	
	
of sales or use tax that was not resold, but used and consumed in the conduct of business. Do not enter 	
	
the cost of items remaining in inventory for resale.
Line 3: 	
             	
             	
             	

Enter the cost of all tangible personal property purchased or imported from out-of-state, including online 	
purchases, for use and consumption in Tennessee where no Tennessee sales tax was paid to the supplier    	
at time of purchase. Do not include items purchased from out-of-state that are to be resold in the conduct 	
of business.

Line 4: 	
             	
             	
             	

Enter the fair market value of tangible personal property fabricated, produced, compounded, or severed           	
from the earth for use in Tennessee. In addition, the purchase price or fair market value, whichever is           	
applicable, of all property furnished to, or used by, a contractor when a sales or use tax has not been      	
previously paid must be included.

Line 5: 	 Add Lines 1 through 4 to determine total sales and purchases for the reporting period.
Line 6: 	 Enter the exempt transactions from Schedule A, Line 11.
Line 7: 	 Subtract Line 6 from Line 5 to determine the state net taxable total.
Line 8:	 Multiply the amount of non-food and food ingredient sales (Line 7) by 7% to determine the general state 	
	
sales tax due.
Line 9: 	 Multiply the total net taxable sales of food and food ingredients from Schedule A, Line 1 by 4% to
	
determine the food sales tax due.
Line 10: 	Enter the local sales tax due from Schedule B, Line 8.
Line 11: 	Add any excess state and/or local tax collected.
Line 12: 	Enter the amount of state sales tax on single articles and special tax rates from Schedule C, Line 9.
	
(See instructions for Schedule C.)
Line 13: 	Enter the amount of local tax on transactions subject to the special tax rates from Schedule C, Line 15.   	
	 (See instructions for Schedule C.)										
							
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Line 14: 	Enter the Central Business Improvement District (CBID) fees from Schedule D, Line 10.  This fee only
	
applies to certain businesses in downtown Nashville.
Line 15: 	Multiply the number of prepaid 911 surcharge transactions made by $1.50. Subtract the 2% administrative 	
	fee. Enter the result.
Line 16:  Enter the total local occupancy tax due on short-term rentals from Schedule F, Column H.
Line 17:  Enter the total tax due on the sale of hemp-derived cannabinoids from Schedule H, Column C.
Line 18: 	Calculate the total tax and fees due before addition of penalty and interest. Add Lines 8, 9, 10, 11, 12, 13, 	
               	14, 15, 16, and 17.
Line 19:  Vendor's compensation is allowed for timely (Annual Filers only) filed and timely paid returns of sales 	
	
tax collected from January 1, 2023 to June 30, 2023.  Vendor's compensation is calculated at 2% of the 	
	
state tax due from Lines  8, 9, and 12, not to exceed $25. Vendor's compensation does not apply to the 	
	
local sales tax.  Failure to timely file or timely pay the total tax due on the return will result in the loss of 	
	
the vendor's compensation deduction. Note: For Monthly and Quarterly filers, Line 19 should not be 	
	
used after the June 2023 return.
Line 20: 	If your account has a credit balance from an overpayment on a prior return, enter the amount on this line.
Line 21: 	If filed late, compute penalty at 5% of the tax due (Line 18 minus Line 20) for each 30 day period or
	
                portion thereof for which the tax is delinquent, up to a maximum of 25% of the delinquent amount.        	
	
The minimum penalty is $15 for the delinquent filing of a return.
Line 22: 	Interest is due on any amount of tax that is paid after the statutory due date of the return. The interest 	                	
	
rate is determined in accordance with Tenn. Code Ann. § 67-1-801. The current interest rate can be found 	                	
	
at www.tn.gov/revenue. If the payment is late, apply the interest rate to the total tax due (Line 18 minus      	               	
	
Line 20) x  Interest Rate x Number of Days Delinquent divided by 365.25).  The interest amount due is       	                	
	
recorded on Line 22.
Line 23: 	Total tax due. When the return is timely filed, deduct Line 19 and 20 from Line 18. On late filed returns, 	
	
	
deduct Line 20 from Line 18, and add amounts calculated on Lines 21 and 22.	
	
	
	
	
																
																
																
																
																
																
																
																
																
																
																
																
																
																
																
																
																
																
																
																
																
							
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Schedule A - Exempt Transactions

The law provides for the deduction from gross sales and purchases those items specifically exempt from tax.
Schedule A is used to identify these items. Schedule A, Line 1 is also used to identify the total food sales subject to
the reduced state tax rate. Any amount claimed as an exemption on Line 6 must be itemized on this schedule.
Line 1: 	 Enter the net total sales of food and food ingredients that are subject to the tax.
Line 2:  	 Include all sales which were made to vendors or other establishments for resale, or for rental or leasing, 	
	
and sales of items to be used in processing for sale. These transactions must be supported by valid 	
	
certificates of resale, to be retained in the dealer’s files.
Line 3: 	 Enter sales of items paid for with Supplemental Nutrition Assistance Program (SNAP) Benefit Security 	
	
Cards 	or EBT cards.
Line 4: 	
	
	
	

Enter all sales to the federal government, the State of Tennessee, its political subdivisions, and sales 	
to qualified nonprofit institutions such as churches, nonprofit schools, hospitals, homes for the aged,
and orphanages. Dealers must retain exemption certificates to support exemptions for sales to
tax-exempt purchasers.

Line 5: 	
	
             	
             	

Enter amount of taxable items voluntarily returned by the purchaser which have been included in Gross   	
Sales on this or a previous return and for which full credit is given to the purchaser. Do not include 		
repossessions. Amounts in excess of single article previously reported on Schedule B, Line 4 should be 	
included on this return on Schedule B, Line 2.

Line 6: 	
             	
	
	

Enter sales of industrial machinery, research and development machinery, agricultural items, qualified 	
data center items, and material handling and racking systems which have been sold to qualified
tax-exempt purchasers. Dealers must retain exemption certificates to support tax-exempt sales to 		
qualified purchasers.

Line  7:  	 Enter those sales originating in Tennessee where the purchaser takes possession outside of Tennessee 	
	for use or consumption outside this state. Also deduct sales of motor vehicles and trailers delivered 	
               	out-of-state by dealers; sales of motor vehicles and boats removed by non-resident purchasers within 	
               	three (3) days; and sales of aircraft removed by non-resident purchasers within thirty (30) days. Dealers 	
              	 must retain affidavits to support non-resident removal of vehicles, boats, and aircraft.
Line  8:  	 Enter that portion of the unpaid principle balances due on tangible personal property repossessed 		
	
from the customer in excess of $500. (See instructions for Schedule B, Lines 2 and 6, below.)
Line  9:  	 Enter deductions not included elsewhere on Schedule A. Include taxable sales subject to special state
	
tax rates such as water and energy fuel sold to qualified manufacturers, aviation fuel and water carrier 	
               	energy fuel sales reported in Schedule C. Enter amounts related to sales of manufactured homes,
	
trade-in allowances, sales of food paid for with WIC vouchers.  Include sales of items specifically
	
exempted by law such as gasoline sales, prescription drugs, prescription mobility enhancing
	
equipment, kerosene dispensed at a blocked pump, and other such items. Do not include trade
	
discounts, or manufacturer’s coupons.  Include: cash discounts given only when included in gross sales 	
	
on this or a previous return.
Line 10: 	Enter the total amount of sales not subject to tax during the temporary exemption period. Include 	 	
	
exempt purchases that would otherwise be subject to use tax. This is the total reported on Schedule G 	
	
Column C. The temporary exemption list includes the following: Sales Tax Holiday (Last Friday of July to     	
	
the following Sunday), Food Sales Tax Holiday (August 1, 2023 to October 31, 2023), and Broadband 	
	
Infrastructure Exemption (July 1, 2022 to June 30, 2025).
Line 11: 	Add the amounts appearing on Lines 1 through 10 and enter on this line. This total must also be 	
	
entered on Line 6 on the first page.	 	
	
	
	
	
	
	
	
						
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Schedule B - Computation of Local Sales and Use Tax

Use this schedule if local taxable sales do not equal state taxable sales. (This will occur if transactions include
energy fuel sales, “single article” sales subject to a maximum local tax, food or food ingredients subject to the state
tax rate of 4%, or other items requiring an adjustment of tax.)
Line 1: 	Enter the State Net Taxable Total from Line 7 on the Front Page.
Line 2: 	Add items used and subject to local tax on which state tax only has been paid to supplier. Enter the 	 	
             	total amounts from Schedule A, Lines 5 and 8. (See instructions for Schedule B, Line 6.)  Also add 	
	
             	other deductions taken in Schedule A, for state tax purposes that are not deductible for local tax purposes. 	
             	Add the amount of food sales from Schedule A, Line 1.
Line 3: 	Add  Lines 1 and 2.
Line 4: 	Enter the total of the amounts in excess of the local option maximum on each single article of tangible 	
             	personal property sold or purchased for use which have not been deducted elsewhere.
Line 5: 	Enter energy fuel sales taxed at the full state rate. Do not include sales subject to reduced rates or water 	
             	carrier energy fuel included in Schedule A, Line 9.
Line 6: 	Enter other qualified local tax deduction amounts not reported on Lines 4 and 5. Include taxable sales 	
             	of specified digital products subject to 2.50% local tax rate and sales of merchandise made through 	 	
	
vending machines. A deduction may be taken on this line to receive credit of a portion of the local option 	
	
tax previously paid on repossessed tangible personal property.
Line 7: 	Deduct the total of the entries on Lines 4, 5, and 6 from the amount on Line 3. This becomes the base for 	
	the local option tax.
Line 8: 	Determine the local sales tax due. Multiply the amount on Schedule B, Line 7 by the applicable local tax 	
            	 rate. Enter the result on this line and on Line 10 on the first page.

Schedule C - State Single Article Tax and Special Rates

Line  1:  	 Enter the total sales from $1,600 through $3,200 on the sales price of all single articles sold.
Line  2:  	 Multiply the amount on Schedule C, Line 1 by 2.75% and enter the result.
Line  3:  	 Enter taxable amount of sales of industrial water subject to the reduced state tax rate of 1% and the 	
local tax rate of ½ of 1% (.005) sold to qualified manufacturers. Manufacturers that did not pay tax to their 	
	
suppliers must enter purchases of water subject to the reduced industrial tax rates.
Line  4:  	 Enter 1% of Line 3.
Line  5:  	 Enter taxable amount of sales of industrial energy fuel subject to the reduced state tax rate of 1.5% 	
	
sold to qualified manufacturers. Manufacturers that did not pay tax to their suppliers must enter 	 	
	
purchases of energy fuel subject to the reduced industrial tax rate.	 	
	
	
	
	
							
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Line  6:  	 Enter 1.5% of Line 5.
Line  7:  	 Calculate state aviation fuel tax. Enter amount of sales and purchases for use on Lines A and B in dollars 	
	
and gallons. Multiply the dollar amounts by 4.25%.
Line  8:  	 Calculate the water carrier energy fuel tax. Enter amount of sales and purchases for use Lines A and B in 	
	
dollars and gallons. Multiply the dollar amounts by 7.00%.
Line  9:   Enter the total state tax from Lines 2, 4, 6, 7, and 8. Enter here and on Line 12 on the first page.
Line 10: 	Calculate the local sales tax on sales of industrial water. Multiply the total industrial water sales on     	
	
Line 3 by 0.50%.
Line 11: 	Enter the total sales and purchases for use of specified digital products during the reporting period.
Line 12: 	Calculate the local tax on sales of specified digital products. Multiply Line 11 by 2.50%.
Line 13: 	Enter the total sales of merchandise made through vending machines.
Line 14: 	Calculate the local tax on sales of merchandise made through vending machines. Multiply Line 13 by   	
	
2.25%.
Line 15: 	Enter the local tax from Lines 10, 12, and 14. Enter here and on Line 13 on the first page.

Schedule D – Central Business Improvement District (CBID) Fee
To be completed only by certain businesses in downtown Nashville that are subject to the CBID fee.
Line 1:  	 Enter Gross Sales from Line 1, subtract Exempt Transactions from Line 6, and add total Net Taxable Food
	
Sales from Schedule A, Line 1.  	
Line 2: 	 Enter sales of professional services to the extent any such professional services are included in Line 1 of 	
	
this schedule (included in Gross Sales and not deducted as Exempt Transactions).
Line 3: 	 Enter net sales taxable amount of overnight lodging. (Be sure to exclude sales tax exempt overnight 	
	
lodging sales deducted on Line 1 of this schedule.)
Line 4: 	 Enter net sales taxable amount of tickets to sporting events or other live ticketed events. (Be sure to 	
	
exclude sales tax exempt ticket sales for such events deducted on Line 1 of this schedule.)
Line 5:  	 Enter net sales taxable amount of alcoholic beverages subject to the liquor-by-the-drink tax. (Be sure to 	
	
exclude sales tax exempt alcoholic beverage sales deducted on Line 1 of this schedule.)
Line 6:  	 Enter net sales taxable amount of publications. (Be sure to exclude sales tax exempt sales of newspapers 	
	
and other publications deducted on Line 1 of this schedule.)
Line 7:  	 Enter net sales taxable amount of overnight and long-term parking. (Be sure to exclude sales tax exempt 	
	
overnight and long-term parking sales deducted on Line 1 of this schedule.)
Line 8:  	 Calculate the total CBID exempt sales. Add Lines 2 through 7.
Line 9:  	 Net sales subject to the CBID fee. Subtract Line 8 from Line 1.
Line 10:	 CBID Fee - Multiply the amount on Line 9 by 0.50%. Enter here and on Line 14 of the first                   		
page.							
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Schedule E – For Sellers Located Outside Tennessee Destination Sales Report
Beginning October 1, 2019, this schedule is to be completed for all sales that originate from a business located
outside of Tennessee and sold to a destination inside Tennessee.  Sales must be reported using the tax rate
applicable to the delivery destination.  Report all your sales made by location on Schedule E, columns B through
I, and bring total sales over to Lines 1 through 8 on Schedule B.

Schedule F – Local Occupancy Tax on Short-term Rentals

Beginning January 1, 2021, this schedule is to be completed by all short-term rental unit marketplaces for all
short-term rentals of residential units rented through the marketplace. Do not report rentals of hotel rooms
or bed and breakfast homestays rented through the marketplace. Rentals must be reported using the tax rate
applicable to the rental unit location.
Column A: Enter the city or county location of the rental unit. List the city when a short-term rental unit is
located within the city limits and county when the rental unit is located in an unincorporated area of the county.
Column B: Enter the amount of gross short-term rental receipts for the city or county identified in Column A.
List the location and receipts for the location only once. Where the receipts are subject to the city and county
occupancy tax, the total of the two occupancy tax rates will apply.  For example, if a short-term rental unit is
located in City A, which is within County B, report the rental receipts for that unit under the City A jurisdiction.
The tax rate for City A will include the total of both the City A and County B tax rates, if both rates are applicable.
If a short-term rental unit is located in an unincorporated portion of County B, report the rental receipts for that
unit under the County B jurisdiction.
Column C: Enter the total deductible and/or excludable receipts. This includes rooms rented for more than 30
continuous days and rooms rented by local, state, and federal government agencies.
Column D: Calculate the taxable rental receipts. Subtract Column C from Column B.
Column E: Calculate the occupancy tax due. Multiply Column D by the applicable local tax rate.
Column F: This line is applicable only to rooms rented in the city of Memphis or in Nashville/Davidson County.  
Enter the net rooms rented per night. ”Net rooms rented per night” is the total number of rooms rented per
night less the number of nightly rentals not subject to the tax, e.g., number of rooms rented for more than 30
days.
Column G: Calculate the nightly occupancy fee for rooms rented in Memphis and Nashville/Davidson County.
Memphis: $2 per room; Nashville/Davidson County: $2.50 per room.
Column H: Calculate the total tax due. Add Column E and Column G.
Enter total from Column H to Line 16 on first page.	 	
	
	
	
	
	
	
	
															
							
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Schedule G – Temporary Exemptions

Beginning July 1, 2023, this schedule is to be completed by any taxpayer who is claiming any of the following
temporary exemptions:
- Sales Tax Holiday (Last Friday in July to the following Sunday)
- Food Sales Tax Holiday (August 1, 2023 to October 31, 2023)
- Broadband Infrastructure Exemption (July 1, 2022 to June 30, 2025)
Column A: If the taxpayer is an in-state taxpayer, the city or county location will be the Location ID where
the sale took place. If the taxpayer is located out-of-state, enter the situs of the location where the item was
shipped.
Column B: Enter one of the temporary exemptions you are claiming from the list above. If you have multiple
temporary exemptions or multiple locations to report, make each temporary exemption or location a separate
entry.
Column C: Enter the temporary exempt amount for each entry. Enter the total from Schedule G, Column C to
Schedule A, Line 10.
Column D: If applicable, enter the total temporary exempt amount in excess of the local option maximum
($1,600) on each single article of tangible personal property sold or purchased for use.

Schedule H – Hemp-Derived Cannabinoids
Beginning July 1, 2023, this schedule is to be completed by any taxpayer who is selling any of the following
products:
- Delta-8 tetrahydrocannabinol
- Delta-10 tetrahydrocannabinol
- Hexahydrocannabinol
-Tetrahydrocannabiphorol (THCp)
-Tetrahydrocannabivarin (THCv)
-Tetrahydrocannabinolic acid (THCa)
-Other:____________________________

Column A: Enter one of the product types sold from the list above. If you have multiple product types or
multiple locations to report, make each product type or location a separate entry.  If you choose other, specify
product.
Column B: Enter the gross sales sold for each entry.
Column C: Multiply the gross sales in Column B for each entry by 6%. Enter the total for all entries on Line 17 on
the first page.	 	
	
	
	
	
	
	
	
	
	
	
	
	
															
															
															
															
						
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