This article has been updated to clarify the application of the Remotely Accessed Software Direct Pay Permit and the Streamlined Exemption Certificate.
A customer with a Tennessee sales and use tax account may use either the Remotely Accessed Software Direct Pay Permit or the Streamlined Sales and Use Tax Certificate of Exemption when purchasing a remotely accessed software product. A purchaser that is not registered for Tennessee sales and use tax purposes may only use the Streamlined Certificate to claim the exemption for the portion of the price that corresponds to the percentage of users located outside of Tennessee.
Therefore, if the customer has a Tennessee sales tax account, then the vendor may obtain a fully completed Remotely Accessed Software Direct Pay Permit from the customer for a remotely accessed software product that is accessed and used both in Tennessee and other states. This permit allows the vendor to sell the remotely accessed software without collecting tax from the customer, and it allows the customer to directly pay to the Department the sales tax on the portion of the sales price that corresponds to the percentage of users in Tennessee.
If the customer does not have a Tennessee sales tax account, then you may accept a fully completed Streamlined exemption certificate for the portion of the sales price of the remotely accessed product that corresponds to the percentage of out-of-state users. However, you must collect sales tax on the portion of the sales price that corresponds to the percentage of users in Tennessee. Please see Important Notice 15-24 and Important Notice 15-14 for more details.
Note: This article was updated on October 26, 2022. The previous version of RAS-4 is available here.
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