RS-3 - How to Apply Sales Threshold

Out-of-state dealers who have no physical presence in Tennessee but make sales exceeding $100,000 (for periods beginning on or after October 1, 2020) to consumers in Tennessee during the previous 12-month period must register with the Department and begin collecting and remitting Tennessee sales and use tax.

The sales threshold was set at $500,000 beginning October 1, 2019. For periods between October 1, 2019 and September 30, 2020, out-of-state dealers should use the $500,000 threshold. Out-of-state dealers should use $100,000 threshold for periods on or after October 1, 2020.

To apply this threshold, you include all retail sales that occurred during the previous 12 months, regardless of where you are in the year. This includes retail sales to individuals, businesses, organizations, and any other purchaser, whether the sale is taxable or exempt. However, you should exclude sales to another dealer for resale.

Note: This article was updated on December 22, 2021 for clarification purposes. The previous version of RS-3 is available here.

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