Is software that is purchased, downloaded onto a server in another state, then accessed by the purchaser’s employees located throughout the U.S., including Tennessee, considered remotely accessed software for Tennessee sales and use tax purposes?

No.  If the purchaser of software takes possession of the software, then it is not remotely accessed software for Tennessee sales and use tax purposes, even if the purchaser’s employees gain access to the software remotely.  In order to qualify as remotely accessed software, the seller must remain in possession of the software. 

The example in the question is not a sale of remotely accessed software, since the purchaser gained possession of the software.  Because the software sale occurred outside the state (i.e., the software was downloaded onto a server in another state), it is not subject to Tennessee sales tax, even if the purchaser’s employees in Tennessee accessed the software from Tennessee.

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