A summary of Senate Bill 500 by the Tennessee Department of Revenue explains that dealers are allowed a deduction equal to 2 percent of the state sales tax due, not to exceed $25 per return. This allowance for the vendor’s compensation does not apply to local sales tax. The legislation enacted in 2022 “revises dealer’s deduction for accounting for and remitting sales tax for items sold during the period of time beginning July 1, 2022, and ending June 30, 2023. – Amends TCA Title 67, Chapter 6, Part 5.”
Florida and a few other states offer vendor’s comp or similar discounts for timely collecting and remitting sales tax on behalf of the state.
Be sure your tax systems and processes are in place to take advantage of and account for the discount. Although minor, this is cash back to the taxpayer.
(Fiscal Note, HB536-SB500, Tennessee General Assembly Fiscal Review Committee, April 22, 2021)