Businesses that qualify for Nexus in Tennessee collect and remit sales and use tax on the sales, lease, or rental of tangible personal property (an item you can touch, smell, or taste), recreational activities, and digital products. Digital products are subject to a special local rate unless the products are also available as tangible product. For example, an eBook version of a book in print. In cases like that, the digital products are taxed at the normal rate.
While most services are exempt from tax in Tennessee, some have specific laws making them taxable. Taxable services include lodging services and rooms, short-term rental space for making sales, cleaning/repairing/installation of tangible personal property including animal bathing or computer software installation, parking or storage of motor vehicles, telecommunication & ancillary telecommunication services, and enriching of uranium materials.
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