State Tax Day - Current, S.8, Tennessee—Multiple Taxes: Various Tax Manuals Updated, (Sep 8, 2026)

Tennessee released updated versions of a number of its tax manuals, including those outlined below.

Car dealerships. The automobile dealership manual was updated to remove references to the federal clean vehicle credit, which has been repealed, and to note that beginning June 30, 2026, lienors who contract with certain service providers may discharge the lien electronically through the Department of Revenue's electronic lien and title system.

Business tax. The business tax manual was updated (1) to state that sellers of exempt taxable tangible personal property and services are not exempt from tax on sales of tangible personal property and services subject to business tax, (2) to provide additional information on the application of the common carrier exemption to transportation companies, and (3) to provide new information on the taxability of software, cloud hosting, and cloud-based services as a result of the opinion in SAP America, Inc. v. Gerregano, No. M2024-01399-COA-R3-CV (Tenn. Ct. App. May 13, 2026) (TAXDAY, 2026/05/20, S.11).

Contractors. The contractors tax manual was updated to address when sales and use tax is due on fabrication services and when a contractor is responsible for paying sales tax on leased property.

Franchise and excise tax. The updated franchise and excise tax manual addresses a number of topics, including family-owned noncorporate entities (FONCE), net operating loss (NOL) and tax credit carryforwards, consolidated net worth, and the community investment tax credit.

Motor fuel tax. The motor fuel tax manual was updated to provide additional information on refund application due dates and on the payment of liquified fuel tax.

Nonprofits. The nonprofit manual was updated to clarify which 501(c) organizations are exempt under the Tenn. Code Ann. Sec. 67-4-708(3)(C)(iv) exemption from business tax.

Sales and use tax. The revised sales and use tax manual addresses the Central Business District, the penny phaseout, telecommunications services, the county food tax rate, the industrial machinery exemption, the sourcing of certain sales, and money transmission services.

Short-term rentals. The short-term rental unit manual was updated to address the application of occupancy tax to the consideration paid for accommodations and to address a recent law that authorizes local governments to provide occupancy tax relief after natural disasters.

Tobacco tax. The tobacco tax manual was updated to provide additional guidance on the taxation of bulk liquids used in vapor products, to incorporate the new definition of "consumable material," and to revise the definition of "vapor product."

Tax Manual Updates, Tennessee Department of Revenue, June 2026