This article was updated on March 8, 2023, to provide additional information regarding tax ID numbers and to update line references to the Streamlined Certificate of Exemption. The previous article is available here.
Packaging materials, including pallets, containers, labels, sacks, bags, or bottles used for packaging products that will accompany the products when sold in a retail sale or sale for resale are exempt from sales and use tax.
The dealer should present a completed Streamlined Certificate of Exemption to its supplier to purchase the packaging materials exempt from sales and use tax. On Line 3 of the exemption certificate, the purchaser should select its type of business (e.g., retail trade, manufacturing, or wholesale trade). On Line 4 of the exemption certificate, the purchaser should select Box L “other” and include the explanation “packaging used incidental to the sale of products.” A Tennessee sales and use tax ID number for registered purchasers, and for out of state nonregistered purchasers a sales and use tax ID number or other business tax ID number issued by its home state may be included as the tax ID number on the Streamlined certificate to claim exemption for packaging materials used incidental to the sale of products.
Reference: Tenn. Code Ann. § 67-6-329(a)(13). Tenn. Comp. R. & Regs. 1320-05-01-.11(1). Important Notice 18-16.