The Tennessee Department of Revenue has announced that the special collection rules for drop shipments will be eliminated on January 10, 2022 and in-state registration will no longer be required in order to generate a valid resale exemption certificate.

If a Tennessee supplier sells tangible personal property or taxable services to an out-of-state dealer for resale and drop ships the goods to the out-of-state dealer’s Tennessee customer after January 10, 2022, the Tennessee supplier may accept a resale certificate issued by another state or a fully completed Streamlined Sales and Use Tax Exemption Certificate that includes the sales tax ID number issued by the other state to make tax-free drop-shipped sales. An out-of-state dealer (including a marketplace seller) who is not registered for sales tax in any state (e.g., home state does not levy sales tax) may provide a Tennessee supplier with a fully completed Streamlined Sales and Use Tax Exemption Certificate that includes a tax ID number for another tax type (e.g., business tax or excise tax) issued by its home state or its federal identification number (FEIN).

A foreign seller that is not registered in any state in the United States can use a completely completed Streamlined Sales and Use Tax Exemption Certificate and a tax ID number given by its home country to acquire tax-free products from a Tennessee supplier and drop ship them to a Tennessee consumer.