Rules & Regulations of the State of Tennessee
Title 1320 - Revenue
Subtitle 1320-04 - Miscellaneous Tax Division
Chapter 1320-04-05 - Business Tax Rules and Regulations
Section 1320-04-05-.01 - ACCOMMODATION SALES AND OTHER SIMILAR TRANSACTIONS

(1) The term "accommodation sales" means occasional and incidental sales for resale by persons regularly engaged in the business of making sales of the type of property so sold to other persons similarly engaged in the business of selling such property, provided the following condition is met: The amount paid by the buyer to the seller does not exceed the amount paid by the seller to his vendor in the acquisition of the article, but to which may be added the cost of freight, in storage cost, and transportation cost incurred in the transfer from the seller to the buyer. Receipts from a bona fide accommodation sale shall not be deemed to be taxable under the Business Tax Act and may be deducted from the gross sales in determining the tax base, provided such sales have been included in the gross sales reported on the Business Tax Return.

(2) Where a person transfers property to another for resale on a memorandum basis, and in turn receives property in kind for the property transferred, there is deemed to be no sale and no Business Tax payable on the transaction.