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VOL. 41 | NO. 13 | Friday, March 31, 2017

Trade groups sue to block Tennessee online sales tax rule

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NASHVILLE (AP) — Tennessee is being sued by two trade groups seeking to block a requirement to collect state sales taxes for online purchases.

The lawsuit has been filed by the American Catalog Mailers Association of America and the NetChoice trade association in chancery court in Nashville. They cite current federal law that says online retailers can only be required to collect sales taxes if they have a physical presence in the state, such as a store or office.

Under a new tax rule, Republican Gov. Bill Haslam's administration has extended the requirement to collect the tax to any retailer with sales of more than $500,000 per year in Tennessee.

While consumers ordering from any out-of-state retailer are legally required to pay the tax to the state Revenue Department, few do in practice.