Sales/Use:
Tennessee DOR Addresses New Law Allowing Some Customers to Directly File Sales Tax Refund Claims

Notice No. 21-18, Tenn. Dept. of Rev. (9/21). The Tennessee Department of Revenue (Department) issued a notice reflecting legislation enacted earlier this year [see S.B. 883 (2021), and State Tax Matters, Issue 2021-20, for more details on this new law] that, effective October 1, 2021, allows customers/purchasers to file sales tax refund claims on taxes paid to dealers directly with the Department under certain circumstances. According to the notice, the new procedure applies “in limited instances when the dealer is unresponsive or declines to credit or refund the tax collected in error.” To claim refund of sales tax paid to the seller with the Department, the customer must ensure that the claim meets the following requirements:

• The claim for refund must exceed $2,500 per dealer;
• The dealer must have collected the tax from the customer and remitted it to the Department; and
• The customer must have requested a refund from the dealer on at least two separate occasions and the dealer failed or declined to issue the refund.

The notice details other underlying procedural requirements, including that prior to filing a claim for refund directly with the Department, the customer also must request that the dealer complete a “dealer attestation form.” Please contact us with any questions.