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-.54 - TRADE-INS

(1) When an item of tangible personal property is taken in trade as a credit or part payment on the sale of new or used articles, the Business Tax shall be computed on the difference between the sales price of the new or used article sold and any credit actually given for the used article accepted in the trade.

(2) A credit will not be allowed for trade-ins unless the item so traded is of a like kind and character of that which is purchased and indicated as a trade-in by model and serial number, where applicable, on an invoice given to the customer.