67-6-537 - Release from liability for sales or use taxes for certain sellers Exceptions. - Tennessee Statutes

67-6-537. Release from liability for sales or use taxes for certain sellers Exceptions.

(a)  This section applies to sellers who satisfy all of the following requirements:

     (1)  The seller registers to pay or to collect and remit applicable sales or use tax on sales made to purchasers in this state, in accordance with the terms of the Streamlined Sales and Use Tax Agreement within twelve (12) months of the effective date of this state's becoming a member in substantial compliance with the agreement;

     (2)  (A)  During the twelve-month period preceding the state's becoming a member in substantial compliance with the agreement, the seller was not registered to collect and remit tax under this chapter; or

          (B)  During the twelve-month period preceding the state's becoming an associate member of the agreement, the seller was not registered to collect and remit tax under this chapter; and

     (3)  There is no audit or assessment pending with respect to the seller, and the department has not notified the seller that it will be the subject of an audit.

(b)  A seller who satisfies the criteria set out in subsection (a) is not liable for sales or use tax not collected from its customers prior to the date of its registration, nor liable for any related interest or penalty, subject to the limitations contained in subsection (c).

(c)  (1)  A seller remains liable for tax collected from its customers but not remitted to the state, and remains liable for any related interest and penalty.

     (2)  A seller remains liable for any use tax due that arises from its capacity as a buyer and user or consumer of taxable items.

     (3)  The release from liability provided by subsection (b) is void, unless the seller maintains its registration and continues to collect and remit applicable sales and use taxes for at least thirty-six (36) months. The statute of limitations provided in § 67-1-1501 is tolled during the thirty-six month period.

     (4)  Fraud or intentional misrepresentation of a material fact voids the release from liability provided by subsection (b).

(d)  A dealer or certified service provider shall not have any additional liability for state or local option taxes imposed by this chapter, if the taxpayer or certified service provider charged and collected or remitted an incorrect amount of sales or use tax in reliance on erroneous data in the taxability matrix provided by the department pursuant to § 328(A) of the Streamlined Sales and Use Tax Agreement. The erroneous data in the taxability matrix provided by the department shall be the most recent published information utilized by the taxpayer or certified service provider that is effective on the date of the transaction. Taxpayers and certified service providers shall provide records evidencing reliance on the erroneous data. Section 328(A) does not apply to errors in charging and collecting or remitting sales or use tax that are the result of classifying the item or transaction within a defined term or defined category included in the taxability matrix.

[Acts 2003, ch. 357, § 61; 2004, ch. 959, §§ 22, 68; 2005, ch. 311, §§ 1, 2; 2005, ch. 499, §§ 65, 66; 2007, ch. 602, §§ 51, 114.]