Tennessee Challenges Physical Presence Nexus Standard

As we continue to monitor how states are attacking the physical presence standard to determine sales tax nexus, I recently saw that Tennessee is getting ready to introduce a new regulation.

This new regulation would require out-of-state businesses to collect and remit the applicable sales tax provided they have more than $500,000 in sales in the preceding twelve months.

It’s a bit more generous from a threshold perspective than the Alabama regulation which is $250,000 but still is a slap in the face to the Quill physical presence standard. If this gets approved, I would expect an almost immediate legal challenge.

See the full article as reported by McDermott Will & Emery.