This article has been updated to reflect the repeal of Sales and Use Tax Rule 96 and is effective January 10, 2022.
Sales and use tax Rule 1320-05-01-.96, the Tennessee drop ship rule, has been repealed.
An out- of- state dealer that has a Tennessee supplier drop ship products or taxable services to a customer in Tennessee may provide the Tennessee supplier with its resale certificate issued by another state or a fully completed Streamlined Sales and Use Tax Exemption Certificate including the sales tax ID number issued by the other state to purchase the drop shipped products for resale without tax.
To learn more information about claiming a resale exemption for purchases drop shipped to Tennessee customers, please read SUT-35 - Sale for Resale - Drop Shipments to Tennessee Customers.
Reference: Tenn. Code Ann. §§ 67-6-102 and 67-6-409, Tenn. Comp R. and Regs. 1320-05-01-.29(2) and 1320-05-01-.68(1-3).
Note: This article was updated on January 4, 2022. The previous version of SUT-36 is available here.