Sales/Use:
Tennessee: Online Platform Uninvolved with Payment Processing is Not a Marketplace Facilitator
Letter Ruling No. 21-05, Tenn. Dept. of Rev. (4/28/21). In a letter ruling involving an online platform that enables participating dealers to create an inventory listing and make business-to-business sales to certain customers, the Tennessee Department of Revenue (Department) held that, under the provided facts, the platform is not a “marketplace facilitator” under state law because it is not involved in collecting payments from customers and/or transmitting them to the dealers. Rather, the online platform’s role is limited to listing the dealers’ inventory information on the platform (i.e., electronically displaying the dealers’ inventory) and confirming/communicating a preliminary order approval or rejection. According to the Department, this minimal role does not meet the definition of a marketplace facilitator under state law, and thus the online platform is not required to collect and remit Tennessee sales and use tax on sales made to Tennessee consumers that use the platform. Please contact us with any questions.
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