Tennessee has stated that leases are subject to the sales and use tax 1% rate increase from CH. 856 (S.B. 3110), Laws 2002.

All lease payments made after July 15, 2002 are effected by this law change regardless of when the lease originally started. In addition, changes contained in TCA Sec. 67–6-702(d) will effect leases of tangible personal property with single items that require a payment of more than $1,600 dollars beginning after July 15, 2002. An increase in the tax rate of 2.75% will be applied to the amount of the lease payment for each item that is greater than $1,600. If a lease payment amount is more than $3,200 on a single item, the original state rate is applied on any amount that exceeds the cap of $3,200. (Important Notice, Tennessee Department of Revenue, July 12, 2002)

Posted on October 15, 2002