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. To qualify as remotely accessed software, the seller must remain in possession of the software.
For example, a customer purchased and downloaded software onto a server in another state. The software is then accessed by the purchaser’s employees located throughout the U.S., including Tennessee. This is not a sale of remotely accessed software because 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.