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State reminds online shoppers of Consumer Use Tax filing

NASHVILLE — Holiday shopping is upon us. As shoppers search for the perfect gifts, the Tennessee Department of Revenue reminds all online shoppers, mail-order customers and out-of-state bargain hunters that they can e-file their consumer use tax, the counterpart to the state’s sales tax. The Department of Revenue offers online filing of consumer use tax via its Web site,

“The Department of Revenue is becoming a ‘digital department’ by adding online tax-filing options like the consumer use application we launched last December,” said Revenue Commissioner Loren L. Chumley. “We encourage our customers to utilize all of our convenient and secure e-filing options to voluntarily comply with Tennessee’s tax laws.”

An online demonstration of the online consumer use application is available at

What is the consumer use tax?

Contrary to popular opinion, online and catalog sales are subject to use tax. This tax has been on the law books since 1947 and is the same rate as the sales tax. When someone buys merchandise online or through a catalog and the seller of the merchandise does not collect sales tax, the consumer who bought the item has a legal obligation to file and pay use tax on the merchandise.

And, purchasing merchandise outside of Tennessee, whether done physically or electronically, will not exempt someone from paying use tax if an equal amount of sales tax was not paid to another state at the time of purchase.

Online Tax Filing Options

Currently, the department’s Web site,, offers online filing of the following taxes: the individual income tax, professional privilege tax, sales and use tax, consumer use tax, and franchise and excise tax minimum and estimated payment returns and extensions. Many business tax registration activities also can be done online. Information about motor fuel tax electronic data interchange and sales and use tax certified software providers is available on Revenue’s Web site. Electronic funds transfer is also available on the Web site.

Computer Access

The Department of Revenue offers computer access to customers who don’t have such technology, so they can file their taxes online. Computer access is available in the department’s offices located in Chattanooga, Jackson, Johnson City, Knoxville, Memphis and Nashville. Interested tax filers must be registered and have an account with the Department of Revenue.

The Department of Revenue collects approximately 92 percent of total state tax revenue. During the 2003-2004 fiscal year, the department collected $9.1 billion in state taxes and fees. In addition to collecting state taxes, $1.6 billion of local sales tax was collected by the department for local governments during the 2003-2004 fiscal year. Besides collecting taxes, the department enforces the revenue laws fairly and impartially in an effort to encourage voluntary taxpayer compliance. The department also apportions revenue collections for distribution to the various state funds and local units of government. To learn more about the department, log on to


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