Saturday, September 17, 2011

Attorney General reviews whether the Retailers' Sales Tax imposes an unconstitutional tax on imports and exports

In this opinion, the Attorney General reviews the Retailers' Sales Tax Act in order to determine whether it violates the Import-Export Clause of the U.S. Constitution. After analyzing Commerce Clause jurisprudence, he determines that the "imposition of Tennessee;s sales and use taxes on out-of-state businesses with respect to items delivered or used in Tennessee is thus constitutionally permissible, provided that “substantial nexus” is established."

He concludes that the Retailers' Sales Tax Act imposes a privilege tax on the retail sale and use of tangible personal property in Tennessee, but that it does not impose a tax on imports from and exports to foreign countries in violation of the United States Constitution.

Read the full opinion here: