Tennessee State Tax Updates

Our Dash of SALT Blog provides the most recent developments and changes in state and local tax regulations. Here are the latest updates for Tennessee.

June 2, 2026

Tennessee Sales Tax on Money Transmission Services

Authored by: Breea Boylan, CPA and Courtney Easterday, MSA

The Tennessee Department of Revenue has issued Notice #26-12 explaining a new sales tax on money transmission services enacted by Public Chapter 1035 (2026). Effective January 1, 2027, sales tax applies to the service of transmitting money from a location in Tennessee to a location outside the United States or its territories. The tax applies only to entities licensed under the Tennessee Money Transmission Modernization Act; financial institutions described in Tenn. Code Ann. § 67-4-2004 are not subject to the tax unless they are also licensed under that act.

The tax is computed per transaction as follows:

$10 on each transaction
An additional 2% on the portion of the amount transmitted that exceeds $500

For example, a $1,500 transmission is taxed at $30, consisting of the $10 base plus 2% of the $1,000 over the $500 threshold.
This tax is a state-level tax only and is not subject to local option sales tax.

If you have questions about Tennessee’s sales tax on money transmission services, please reach out to a member of the Withum SALT Team.

April 20, 2026

Winter Storm Prompting Tennessee to Extend Tax Deadlines

Authored by: Brandon Spinella and Katie Nguyen, CPA

The Tennessee Department of Revenue announced that it has extended franchise and excise tax filing and payment deadlines to June 8, 2026, in accordance with IRS winter storm relief provisions. The extension applies to deadlines originally falling between January 22 and June 8, 2026, for taxpayers located in state-designated disaster areas, including numerous counties such as Davidson, Rutherford, Williamson, and Wilson, as well as any additional disaster areas designated in the future. Eligible taxpayers with a primary address on file in the affected areas will automatically receive the extension. Extensions for sales and use tax, business tax, and other taxes may be granted on a case-by-case basis, and practitioners in the affected areas may request extensions on behalf of their clients.

If you have any questions about the state disaster relief provisions, please reach out to a member of the Withum SALT Team.

January 14, 2026

Tennessee Department of Revenue Rules Cryptocurrency Sales and Related Transaction Fees Are Exempt From Business Tax

Authored by: Bonnie Susmano, JD, MBA and Joe Petrucci

In Revenue Ruling #25-10 (dated December 16, 2025), the Tennessee Department of Revenue concluded that a taxpayer’s receipts from the sale of Bitcoin and other cryptocurrencies are not subject to Tennessee business tax because the taxpayer is buying and selling intangible personal property. The Department also ruled that the taxpayer’s transaction fees earned for facilitating cryptocurrency transactions are not subject to business tax, characterizing the fees as receipts from currency/commodities exchange services that are excepted from the business tax under the applicable classification rules. Consistent with existing Department guidance, Tennessee treats virtual currency as intangible property for state tax purposes and notes that taxable goods/services purchased with virtual currency remain taxable based on the advertised price.

If you have questions about Tennessee’s Business Tax Exemption regarding Crypto Sales and Related Transaction Fees, please reach out to a member of the Withum’s SALT Team.

December 17, 2025

Tennessee Addresses Sales Tax Treatment of Healthcare Software Subscriptions

Authored by: Emilia Jarrin and Katie Nguyen, CPA

The Tennessee Department of Revenue recently issued Revenue Ruling 25-08 addressing the sales and use tax treatment of subscription fees for a mobile healthcare solution. While services are generally exempt from sales tax in Tennessee, the ruling emphasizes that subscriptions granting access to remotely accessed software or digital platforms may be taxable when the software is the primary object of the transaction. In this case, the Department concluded the subscription fee was taxable because its core purpose was access to software used to track and manage health data. The ruling also highlights that bundled subscriptions containing both taxable and nontaxable components may be fully taxable unless the provider clearly segregates the exempt portion. Licensed medical services remain exempt, but digital platforms used alongside those services are not automatically excluded from taxation.

If you have questions about the state tax treatment of digital goods and services, please reach out to a member of the Withum’s SALT Team.

December 10, 2025

Tennessee Reduces Interest Rates

Authored by: Bonnie Susmano, JD, MBA and Jessie Racioppi

On November 1, 2025, the Tennessee Department of Revenue issued a Notice 25-11 regarding the Hemp-Derived Cannabinoid Products Tax Notice originally issued in June of 2025. The updated guidance clarifies that taxpayers with valid licenses from the Department of Agriculture are not subject to the hemp-derived cannabinoid products (HDCP) wholesale tax. Once a taxpayer’s Agriculture license expires and the taxpayer obtains an Alcoholic Beverage Commission license, the taxpayer will be subject to the 6% wholesale tax on HDCP sales effective January 1, 2026. The notice further clarifies that the 6% tax does not apply to retail HDCP sales.

If you have questions about state cannabis taxes, please reach out to a member of the Withum’s SALT Team.

June 24, 2025

Tennessee Reduces Interest Rates

Authored by: Katie Nguyen, CPA and Ryan Schupp

On June 11, 2025, the Tennessee Department of Revenue issued a notice to reduce the interest on assessments effective July 1, 2025. The interest rate change is applicable to underpayments and overpayments, and the rate will be reduced from 12.5% to 11.50%. This rate will apply until June 30, 2026. The 13.25% interest rate on installment payment plans remains unchanged.

If you have questions about the application of interest to tax underpayments and overpayments, please reach out to a member of the Withum’s SALT Team.

October 16, 2024

Tennessee Taxpayers Affected by Hurricane Helene Receive Tax Filing Extensions

Authored by: Bonnie Susmano, JD, MBA and Brandon Spinella

Individuals and businesses will be provided tax relief and filing extensions by the Tennessee Department of Revenue in the eight (8) counties affected by Hurricane Helene. The state extended the due date for excise and franchise tax filings, and payment is May 1, 2025. The affected counties include Carter, Cocke, Greene, Hamblen, Hawkins, Johnson, Unicoi, and Washington.

Tennessee residents who suffered casualty losses to a primary residence caused by Hurricane Helene may apply for sales tax refunds of up to $2,500 on the purchase of major appliances, furniture, or residential building supplies.

If you have questions about state disaster relief provisions, please reach out to a member of the Withum’s SALT Team.

Disclaimer: Please note this is the information that is readily available at this time, it is subject to change so please consult your Withum tax advisor.