New Guidance on Vendors’ Compensation, Tax Holiday

Date: June 06, 2022

Tennessee’s Department of Revenue has issued guidance on the upcoming restoration of vendors’ compensation beginning in July for one year, as well as the sales tax holiday for certain food sales during the month of August and computer software developed for personal use.

Vendors’ Compensation Guidance

NFIB supported passage of “vendors’ comp” legislation in the recently completed session and will fight to have a permanent restoration next year. Learn more about this win for retailers and reporting requirements at the link above.

Sales Tax Holiday Guidance

During August, food and food ingredients may be purchased tax free. Food and food ingredients purchased from a micro market or vending machine remain subject to sales tax. In short, groceries will be tax exempt but prepared foods will not be. Read more at the link above.

Computer Software Developed for Personal Use

Tennessee law exempts from sales and use tax computer software developed by a person for that person’s own use. Under the version of the law in effect until July 1, 2022, if the user of the software was a business, the exemption only applied when the individual fabricating the software was a direct employee of that business. Public Chapter 1065, effective July 1, 2022, extends the exemption to include fabrication, installation, and repair of computer software performed by an agent of the business. Learn more at the link above and always consult a tax professional for specific guidance to your business.

Related Content: Small Business News | Tennessee

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