Beginning Oct. 1, 2019, wineries that hold a Tennessee Direct Wine Shipper license will no longer have the option to collect and remit the local sales tax at a standard 2.25% local rate. For sales that occur on or after Oct. 1, 2019, out-of-state sellers, including wineries, must apply the specific sales tax rate of the local tax jurisdiction into which the sale was shipped or delivered. Additionally, sales must be reported by the shipped to or delivery destination in the local tax schedule on the sales tax return.
Wineries and/or their certified software provider can use the boundary database on the Department of Revenue’s website to lookup the local tax rate for each of the jurisdictions. The local tax rate is imposed by the city and/or county and cannot exceed 2.75%.
Tenn. Code Ann. § 57-3-217 requires direct shipper licensees to remit the 7% general state sales tax and applicable local sales tax on all wine sales shipped to consumers in the State of Tennessee. There are no economic nexus thresholds that apply or that a direct shipper licensee must meet before their sales tax collection obligation begins.
For more information see the recent Department of Revenue Notice regarding local sales tax reporting by out-of-state dealers.