Is the transference of virtual currency subject to sales and use tax or business tax?

No. Virtual currency (e.g., bitcoin) is intangible property for Tennessee taxation.  Therefore, when an individual purchases virtual currency, the transaction is not subject to sales or use tax or business tax.  However, sales of taxable goods or services that are purchased with virtual currency are still taxable sales.  The tax base for such transactions for sales and use tax and business tax would be the advertised price of the taxable good or service.

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