Current status of Wayfair court case in Tennessee

In light of the June ruling by U.S. Supreme Court in South Dakota v. Wayfair, many are asking if Tennessee is any closer to requiring remote sellers to collect sales and use tax.

South Dakota v. Wayfair Eliminates Physical Presence Rule
On June 21, 2018, the U.S. Supreme Court issued its decision in South Dakota v. Wayfair, Inc. and overturned the physical presence rule that previously applied under Quill Corp. v. North Dakota.
Prior to Wayfair, a state could not require an out-of-state dealer to collect its sales tax unless the dealer had a physical presence in the taxing state.
After Wayfair, that physical presence rule no longer exists.
However, in May 2017, the Tennessee General Assembly passed legislation that prohibits the Tennessee Department of Revenue from enforcing the practice until the General Assembly reviews the Wayfair decision.
The Tennessee legislature in not set to convene until Jan. 8, 2019.
In the meantime, the Tennessee Department of Revenue released the following important notice on how the ruling will affect sales tax collections from remote sellers.

Sales Tax Rule 129(2) Not
Currently Enforced
As detailed in Important Notices 17-01 and 17-12, Tennessee has established an economic nexus rule, Rule 129(2).
However, in May 2017, the Tennessee General Assembly passed legislation that prohibits the Tennessee Department of Revenue from enforcing Rule 129(2) until the General Assembly reviews the Wayfair decision.

Current status in Tennessee
If a seller has no physical presence in Tennessee, the seller is not required to collect Tennessee sales and use tax until the Department of Revenue issues public notice stating the specific date and circumstances under which such businesses must begin to collect and remit the tax.
However, the Department of Revenue encourages these businesses to voluntarily collect and remit the tax as a convenience to their customers.
Additionally, remember that all businesses with a physical presence in Tennessee have always been required to collect and remit the tax.
Businesses may register through the online Tennessee Taxpayer Access Point (TNTAP) under “Register a New Business.”
Sellers may also register with Tennessee by accessing the Streamlined Sales Tax Registration System.

No Retroactivity
The Department of Revenue will not apply Rule 129(2) retroactively.
As stated above, businesses without a physical presence in Tennessee will not be required to collect sales and use tax until the Department of Revenue provides public notice stating the specific date and circumstances under which such businesses must begin to collect and remit the tax.
Sellers that had no physical presence in Tennessee and did not collect the tax will not be assessed for any periods that precede the Department of Revenue’s notice.
To review the notice, visit https://www.tn.gov/content/dam/tn/revenue/documents/notices/sales/sales18-11.pdf.
For more information visit www.tn.gov/revenue.