Taxes, Sales

Plain English Breakdown

The exact amount of additional revenue and local government increases are based on estimates and cannot be precisely determined.

Tennessee Sales Tax on Advertising Services

This bill adds a sales tax to advertising services purchased by businesses with annual revenue of $100 million or more in Tennessee, starting January 1, 2027.

What This Bill Does

• Adds a new type of service taxable under the state's sales and use tax law: advertising services for large businesses.
• Defines 'advertising' as any communication meant to promote brands, products, or services through written, electronic, or printed means, including sponsorships and various media types like TV, digital, radio, billboards, and print.
• Gives the Department of Revenue permission to create rules about how this new tax will be applied.

Who It Names or Affects

• Businesses with annual revenues of at least $100 million who purchase advertising services.

Terms To Know

Sales and use tax

A tax on goods and some services when they are sold or used in Tennessee.

Advertising

Any communication meant to promote a brand, product, or service through written, electronic, or printed means, including sponsorships and various media types like TV, digital, radio, billboards, and print.

Limits and Unknowns

• The exact amount of additional revenue the state will collect cannot be precisely determined.
• Local governments will receive a mandatory increase in revenue from this new tax, but the specific amounts are estimates.

Official Summary Text

Present law provides that t
here is levied a tax at the rate of the tax levied on the sale of tangible personal property at retail on the sales price of all services taxable under
state sales tax law
.
As of January 1, 2027, this bill adds a
dvertising services purchased by or on behalf of a business entity that generates annual revenue in an amount equal to or greater than
$100
million
as another service that is so taxed
.

"ADVERTISING" DEFINED

As used in
this
bill
, "advertising" means any written, electronic, or printed communication for the purpose of promoting a brand, product, or service to the public in order to create an interest in the brand, product, or service, or induce a person to purchase or use a produ
ct or service and includes sponsorships and television, digital, radio, billboard, and print advertising.

RULEMAKING

This bill authorizes the department of revenue to promulgate rules to effectuate this bill.

Current Bill Text

SENATE BILL 2568
By Haile

HOUSE BILL 2493
By Williams
HB2493
009485
- 1 -

AN ACT to amend Tennessee Code Annotated, Title 67,
relative to the sales and use tax.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Section 67-6-205(c), is amended by adding
the following as a new subdivision:
(10) Advertising services purchased by or on behalf of a business entity that
generates annual revenue in an amount equal to or greater than one hundred million
dollars ($100,000,000). For purposes of this subdivision (c)(10), "advertising" means
any written, electronic, or printed communication for the purpose of promoting a brand,
product, or service to the public in order to create an interest in the brand, product, or
service, or induce a person to purchase or use a product or service and includes
sponsorships and television, digital, radio, billboard, and print advertising.
SECTION 2. The Department of Revenue is authorized to promulgate rules to
effectuate this act. The rules must be promulgated in accordance with the Uniform
Administrative Procedures Act, compiled in Tennessee Code Annotated, Title 4, Chapter 5.
SECTION 3. For purposes of promulgating rules, this act takes effect upon becoming a
law, the public welfare requiring it. For all other purposes, this act takes effect January 1, 2027,
the public welfare requiring it.