Rules & Regulations of the State of Tennessee
Title 1320 - Revenue
Subtitle 1320-05 - Sales and Use Tax Division
Chapter 1320-05-01 - State Sales and Use Tax Rules
Section 1320-05-01-.55 - SALES TO THE STATE OR POLITICAL SUBDIVISIONS

(1) Sales of tangible personal property and taxable services to the State, or a County, or Municipality within the State of Tennessee are not subject to the Sales or Use Tax provided that such governmental institution furnishes the vendor with a properly executed exemption certificate; however, any sale made to a State other than Tennessee, or a County or Municipality not located within Tennessee, is subject to the Sales Tax.

(2) In order to be a sale to the State of Tennessee, or a County or Municipality in this State, the State, County, or Municipality must make the purchase of the property or taxable service, obtain title to the property or service immediately when it is delivered, and pay directly to the dealer supplying the property or service the purchase price of such property or taxable service.

(3) Sales of tangible personal property and taxable services to a contractor or other person for the use and later benefit of the State or a County, or Municipality in this State, are subject to the appropriate Sales or Use Tax.

(4) Dealers must have an appropriate Governmental Exemption Certificate for any tangible personal property or taxable service which is sold to governmental institutions from whom the Sales or Use Tax is not collected, and keep such certificate as a part of their records to show that such sales are exempt from the Sales or Use Tax.