The state of Tennessee recently enacted the Revenue Modernization Act (the "Act"). According to the state, while the legislation does not introduce any new taxes, it should raise revenue and create an even playing field in Tennessee for both in - state and out- of- state businesses by updating Tennessee's tax laws to reflect the realities of the constantly growing e- commerce economy. Although new taxes are not created, the Act does expand the state's taxing authority in a number of ways that will affect both in- state and, more importantly, out-of-state companies generating revenue in Tennessee.
In adopting the Act, Tennessee joins the movement by the states to determine a taxpayer's nexus (for purposes of levying business, franchise, and excise taxes) based upon the taxpayer's economic relationship to the state. The following factors are specifically incorporated by the Act and are considered indicia of Tennessee nexus...
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