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-.24 - LEASE OR RENTAL

(1) Leases and rentals of tangible personal property are deemed sales of tangible personal property and subject to the Business Tax. When real property and tangible personal property are leased or rented, that portion of the charges made for or properly attributable to lease or rental of tangible personal property shall be considered as sales subject to the Business Tax. The tax shall apply to all leases of tangible personal property delivered to a lessee or rentee in this state, regardless of where the property may be taken or used, whether within or without the state, and the tax will apply to whatever charges are made.

(2) Persons engaged in the business of leasing or renting tangible personal property to users or consumers are taxable as retailers and persons leasing or renting tangible personal property to persons who in turn will lease or rent the property to others are taxable as wholesalers.