If the vendor offers any kind of incentive that is reimbursed by a third party, such as a manufacturer's rebate, that brings the price you pay to under the threshold amount, the original sales price of the item before application of the reimbursable incentive will be the price that determines tax application.
For example, if you purchase a computer that normally sells for $1,800, but the vendor offers a $300 manufacturer's rebate that brings the price you pay to $1,500, the $1,800 original sales price will be the price that determines taxability. In this case, because the actual sales price exceeds $1,500, the computer will remain subject to tax.
However, if the vendor offers a store discount that is not reimbursed by any third party, then the discounted sales price will determine sales tax application.
Reference: Tenn. Code Ann. § 67-6-393(d)(2).