Tennessee DOR Issues Ruling on Application of Sales Tax to Contractors Purchasing Equipment, Materials

The Tennessee Department of Revenue (DOR) Aug. 21 issued a ruling providing guidance on the application of Tennessee sales and use tax to contractors purchasing equipment and materials to expand a freshwater treatment facility. The ruling states that the piping used in the expansion qualifies as industrial machinery, and therefore, contractors may purchase the piping without payment of sales tax. Additionally, contractors are not required to accrue and remit use tax when installing the piping to expand the facility. [Tenn. Dep’t of Revenue, Letter Ruling #24-07, 08/21/24]

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