A 501(c)(3) nonprofit runs an on-demand vehicle-share program in a Tennessee city. Are its membership fees, single-use rental fees, and penalty fees exempt from sales tax because it's a nonprofit — or are they taxable?

Plain-English summary

The taxpayer is a 501(c)(3) nonprofit whose main activity is running an on-demand shared-vehicle program in a Tennessee city. (The Department redacted the vehicle type; the facts — vehicles parked in hubs around the city, checked out on demand, used for 60-minute periods, and docked back — describe a bike-/scooter-share-style program.) Customers either pay a Single Use Fee for one 60-minute trip or buy a Membership (weekly, monthly, or yearly) giving unlimited 60-minute trips for that period. Extra fees can apply: a $5 Usage Fee for each additional 60-minute period (capped at $100/day), a $10 Out-of-Hub Fee for not docking properly, a $25 Out-of-Service-Area Fee, and a $2,000 Stolen-Vehicle Fee if a vehicle isn't returned within 24 hours.

The nonprofit asked whether its fees were exempt because it's a 501(c)(3). The Department said all of the fees are taxable:

1. Membership Fees — taxable; not exempt nonprofit "dues." A 501(c)(3)'s membership application fees, dues, and contributions are exempt from the amusement tax under § 67-6-330(a)(3). But under the true-object test, what the customer is really buying with a "membership" is the right to rent a vehicle — the membership confers no other benefit, and there's no extra charge for simply checking a vehicle out. So the fees are charges for the lease or rental of tangible personal property (taxable under § 67-6-204(a)), not membership dues, and the exemption doesn't apply.

2. Single Use Fees — taxable; not an exempt nonprofit "admission." A 501(c)(3)'s admission charges to amusement or recreational activities it conducts are exempt under § 67-6-330(a)(5)(A)(ii). But a Single Use Fee isn't an admission to an activity the nonprofit conducts — it's payment to rent a vehicle for an allotted time. That's a taxable rental of tangible personal property under § 67-6-204(a).

3. The extra fees — taxable too. The Usage, Out-of-Hub, Out-of-Service-Area, and Stolen-Vehicle fees, whatever they're called, are additional consideration for the rental. "Sales price" is the total consideration for the rental (§ 67-6-102(79)(A)), and "consideration" includes an obligation the customer takes on (Nashville Clubhouse). The customer accepts these fee obligations specifically in exchange for the right to rent, so they're part of the taxable rental price.

The throughline: being a nonprofit doesn't make a rental tax-free. When the true object of the deal is renting tangible personal property, neither the membership-dues exemption nor the nonprofit-admission exemption applies, and every related charge rides into the taxable rental price.

What this means for you

Nonprofits running rental, share, or "membership" programs

A 501(c)(3) determination does not automatically exempt what you charge. Tennessee's exemptions are activity-specific: membership dues (§ 67-6-330(a)(3)) and admissions to recreational activities you conduct (§ 67-6-330(a)(5)(A)(ii)) can be exempt, but renting equipment or vehicles is a taxable sale of tangible personal property no matter who does it. If your "membership" mainly buys the right to use your property, expect the Department to treat the fee as a taxable rental, not exempt dues.

Bike-share, scooter-share, and equipment-share operators

Time-based access to vehicles or equipment you own is a lease/rental of tangible personal property subject to Tennessee sales tax (§ 67-6-204(a)) — on the base fee and on overage, penalty, re-docking, out-of-area, and lost/stolen-property charges, because those are all part of the total consideration for the rental. Build sales tax into single-use fees, memberships, and the rest of the fee schedule.

Why the labels didn't matter

Calling a charge a "membership," an "admission," or a "fee/fine" didn't change the result — the Department looked at the true object (renting a vehicle) and the substance of the consideration. A label that doesn't match the economic substance won't create an exemption.

Accountants and tax professionals

The analysis: (1) lease/rental of TPP is taxable on the full sales price (§ 67-6-204(a); "lease or rental" § 67-6-102(49); "sales price" § 67-6-102(79)(A)); (2) the true-object/primary-purpose test (Qualcomm, AOL v. Roberts; note Penske — a transaction can have multiple true objects analyzed separately) treats the membership as a rental, not dues; (3) the § 67-6-330(a)(3) dues exemption and the § 67-6-330(a)(5)(A)(ii) nonprofit-admission exemption are construed against the rental; (4) "consideration" includes obligations the promisee assumes (Nashville Clubhouse v. Johnson, 27 S.W.3d 542; Trailer Conditioners v. Huddleston, 897 S.W.2d 728), so the penalty-type fees are part of the taxable price.

Common questions

Q: We're a 501(c)(3) — aren't our membership fees automatically exempt from Tennessee sales tax?
A: No. The nonprofit dues exemption (§ 67-6-330(a)(3)) covers true membership dues. Here the "membership" only buys the right to rent a vehicle, so the Department treated the fee as a taxable rental of tangible personal property under § 67-6-204(a).

Q: Is a single-use / walk-up rental fee taxable?
A: Yes. It's payment to rent a vehicle for a set time — a taxable rental of tangible personal property — and it's not an exempt admission to a recreational activity the nonprofit conducts (§ 67-6-330(a)(5)(A)(ii)).

Q: What about overage charges and penalty fees like a lost/stolen-vehicle fee?
A: Those are taxable too. They're additional consideration the customer takes on in exchange for the right to rent, so they're part of the total taxable rental price (§ 67-6-102(79)(A)).

Q: Can I rely on this letter ruling?
A: No. A Tennessee letter ruling is binding on the Department only as to the specific taxpayer and facts it was issued to, and it can be revoked or modified. Confirm your own facts with a tax professional.

Citations and references

Tennessee statutes (Tenn. Code Ann.):

• § 67-6-204(a) (tax on the sales price of all leases and rentals of tangible personal property)
• § 67-6-330(a)(3) (exemption for membership application fees, dues, or contributions paid to 501(c)(3)/(8)/(19) organizations — held not to apply); § 67-6-330(a)(5)(A)(ii) (exemption for admissions to amusement/recreational activities conducted by a 501(c)(3) — held not to apply)
• § 67-6-212, § 67-6-212(a), § 67-6-212(a)(1) (amusement tax; "dues or fees to membership sports and recreation clubs")
• § 67-6-202 (retail sales tax); § 67-6-102(78)(A) ("sale"); § 67-6-102(76) ("retail sale"); § 67-6-102(49) ("lease or rental"); § 67-6-102(79)(A) ("sales price"); § 67-6-102(89)(A) ("tangible personal property")

Rules:

• Tenn. Comp. R. & Regs. 1320-05-01-.32(1) (1987) (sales price); 1320-05-01-.115 (amusement tax)

Case law:

• "Consideration": Nashville Clubhouse, Inc. v. Johnson, 27 S.W.3d 542, 545 (Tenn. Ct. App. 2000); Trailer Conditioners, Inc. v. Huddleston, 897 S.W.2d 728, 731 (Tenn. Ct. App. 1995)
• True-object / primary-purpose: Qualcomm, Inc. v. Chumley, 2007 WL 2827513 (Tenn. Ct. App. Sept. 26, 2007); AOL, Inc. v. Roberts, 2013 WL 4067977 (Tenn. Ct. App. Aug. 12, 2013); Penske Truck Leasing Co. v. Huddleston, 795 S.W.2d 669 (Tenn. 1990) (separate true objects analyzed separately); Thomas Nelson, Inc. v. Olsen, 723 S.W.2d 621 (Tenn. 1987); AT&T Corp. v. Johnson, 2002 WL 31247083 (Tenn. Ct. App. 2002); Rivergate Toyota, Inc. v. Huddleston, 1998 WL 83720 (Tenn. Ct. App. 1998); Tenn. Dep't of Revenue Ltr. Rul. 14-10 (Oct. 14, 2014)

Source

• Landing page: https://www.tn.gov/revenue/tax-resources/legal-resources/tax-rulings.html
• Original PDF: https://www.tn.gov/content/dam/tn/revenue/documents/rulings/sales/18-05.pdf

Original ruling text

Letter rulings are binding on the Department only with respect to the individual taxpayer
being addressed in the ruling. This ruling is based on the particular facts and circumstances
presented, and is an interpretation of the law at a specific point in time. The law may have
changed since this ruling was issued, possibly rendering it obsolete. The presentation of this
ruling in a redacted form is provided solely for informational purposes, and is not intended as
a statement of Departmental policy. Taxpayers should consult with a tax professional before
relying on any aspect of this ruling.

The application of Tennessee sales and use tax to a not-for-profit entity’s lease or rental of
[TRANSPORTATION VEHICLES] for recreational use.

This letter ruling is an interpretation and application of the tax law as it relates to a specific set of
existing facts furnished to the Department by the taxpayer. The rulings herein are binding upon the
Department, and are applicable only to the individual taxpayer being addressed.
This letter ruling may be revoked or modified by the Commissioner at any time. Such revocation or
modification shall be effective retroactively unless the following conditions are met, in which case
the revocation shall be prospective only:
(A)

The taxpayer must not have misstated or omitted material facts involved in the
transaction;

(B)

Facts that develop later must not be materially different from the facts upon
which the ruling was based;

(C)

The applicable law must not have been changed or amended;

(D)

The ruling must have been issued originally with respect to a prospective or
proposed transaction; and

(E)

The taxpayer directly involved must have acted in good faith in relying upon the
ruling; and a retroactive revocation of the ruling must inure to the taxpayer’s
detriment.

[TAXPAYER] (the “Taxpayer”) is a [STATE] nonprofit corporation that is exempt from federal income
taxation under Internal Revenue Code § 501(a) as an organization described in § 501(c)(3). The

1

Taxpayer’s primary purpose is operating a [TRANSPORTATION VEHICLE] share program in
[TENNESSEE CITY]. [REDACTED].
The [TRANSPORTATION VEHICLE] share program consists of [TRANSPORTATION VEHICLES] located
in [STRUCTURES] throughout the city that are available to the public on-demand. [CUSTOMERS] can
access the [TRANSPORTATION VEHICLE] by paying a single-use walk-up fee (the “Single Use Fee”), or
by purchasing a weekly, monthly or yearly membership (collectively, a “Membership”) by paying the
appropriate fee (collectively, the “Membership Fees”).
The Single Use Fee allows a customer to use a [TRANSPORTATION VEHICLE] for sixty minutes. The
weekly membership allows a customer unlimited sixty-minute [USAGE] for one week. The monthly
membership allows a [CUSTOMER] unlimited sixty-minute [USAGE] for one month, includes a free
membership card, and automatically renews upon expiration. The yearly membership allows a
[CUSTOMER] unlimited sixty-minute [USAGE] for one year, includes a free membership card, and
automatically renews upon expiration.
The Taxpayer may also charge customers one or more of the following fees when applicable: Usage
Fees, Out of Hub Fees, Out of Service Area Fees, or Stolen [TRANSPORTATION VEHICLE] Fees. The
Taxpayer charges a Usage Fee of $5.00 for each additional sixty-minute period, or portion thereof,
that a customer keeps a [TRANSPORTATION VEHICLE] for longer than the initial sixty-minute period.
The maximum daily Usage Fee is $100.00. The Taxpayer charges a $10.00 Out of Hub Fee when a
customer does not properly dock a [TRANSPORTATION VEHICLE] after use. The Taxpayer charges a
$25.00 Out of Service Area Fee to customers who take a [TRANSPORTATION VEHICLE] out of the
designated service area. And the Taxpayer charges a Stolen [TRANSPORTATION VEHICLE] Fee of
$2,000.00 when a customer does not return a [TRANSPORTATION VEHICLE] within 24 hours.

1.

Are the Taxpayer’s Membership Fees exempt from the Tennessee sales and use tax
pursuant to TENN. CODE ANN. § 67-6-330(a)(3) (Supp. 2017)?
Ruling: No. The Membership Fees are not exempt from the Tennessee sales and use tax
pursuant to TENN. CODE ANN. § 67-6-330(a)(3). Rather, the Membership Fees are subject to the
Tennessee sales and use tax because they are charges for the retail sale or rental of tangible
personal property.

2.

Are the Taxpayer’s Single Use Fees subject to Tennessee sales and use tax?
Ruling: Yes. The Single Use Fees are subject to the Tennessee sales and use tax as charges
for the lease or rental of tangible personal property.

3.

Are the Taxpayer’s Usage Fees, Out of Hub Fees, Out of Service Area Fees, and Stolen
[TRANSPORTATION VEHICLE] Fees subject to Tennessee sales and use tax?
Ruling: Yes. The Usage Fees, Out of Hub Fees, Out of Service Area Fees, and Stolen
[TRANSPORTATION VEHICLE] Fees are subject to the Tennessee sales and use tax as charges
for the lease or rental of tangible personal property.

2

1

Under the Retailers’ Sales Tax Act, the retail sale in Tennessee of tangible personal property and
specifically enumerated services is subject to the sales and use tax, unless an exemption applies.
“Retail sale” is defined as “any sale, lease, or rental for any purpose other than for resale, sublease,
2
or subrent.”
TENN. CODE ANN. § 67-6-102(78)(A) (Supp. 2017) defines “sale,” in pertinent part, to mean “any transfer
of title or possession, or both, exchange, barter, lease or rental, conditional or otherwise, in any
3
manner or by any means whatsoever of tangible personal property for a consideration.” “Lease or
rental” is the “transfer of possession or control of tangible personal property for a fixed or
4
indeterminate period of time for consideration.”
TENN. CODE ANN. § 67-6-204(a) (2013) imposes tax on the “sales price of all leases and rentals of
tangible personal property.” The “sales price” upon which tax is due is the “total amount of
consideration paid, including cash, credit, property, and services, for which personal property or
5
services are sold, leased, or rented, valued in money, whether received in money or otherwise.”
Not all transactions readily lend themselves to classification for sales tax purposes. In order to
resolve the tension in these difficult transactions, Tennessee courts have developed a line of inquiry
6
7
that focuses on what is the “true object” of the transaction. In applying this test, the courts look at
8
the totality of the facts and circumstances to determine what objective is really being accomplished
9
by the transaction.
1

Tennessee Retailers’ Sales Tax Act, ch. 3, §§ 1-18, 1947 Tenn. Pub. Acts 22, 22-54 (codified as amended at TENN. CODE ANN.
§§ 67-6-101 to -907 (2013 & Supp. 2017)).
2

TENN. CODE ANN. § 67-6-102(76) (Supp. 2017).

3

“Tangible personal property” includes “property that can be seen, weighed, measured, felt, or touched, or that is in any other
manner perceptible to the senses.” TENN. CODE ANN. § 67-6-102(89)(A).
4

TENN. CODE ANN. § 67-6-102(49).

5

TENN. CODE ANN. § 67-6-102(79)(A). See also TENN. COMP. R. & REGS. 1320-05-01-.32(1) (1987).

6

This inquiry is sometimes stated as the “primary purpose” test. See generally Qualcomm, Inc. v. Chumley, No. M2006-01398COA-R3-CV, 2007 WL 2827513, at *4-5 (Tenn. Ct. App. Sept. 26, 2007) (giving a synopsis of the “true object” or “primary
purpose” test in Tennessee).

7

This analysis is not entirely unique to Tennessee, but the application of the test does vary in other states. See generally 2
JEROME HELLERSTEIN ET AL., STATE TAXATION: SALES AND USE, PERSONAL INCOME, AND DEATH AND GIFT TAXES AND INTERGOVERNMENTAL
IMMUNITIES ¶ 12.08[1], at 12-108 (3d ed. 1998 & Supp. 2014) (discussing the “true object” test).
8

See, e.g., AOL, Inc. v. Roberts, No. M2012–01937–COA–R3–CV, 2013 WL 4067977, at *6 (Tenn. Ct. App. Aug. 12, 2013) (basing
the holding on the “totality of the circumstances”).
9

Note that it could be possible that there is not a single true object of the transaction, but rather multiple objects of the
transaction. In that case, each object of the transaction should be analyzed separately for tax purposes. Cf. Penske Truck
Leasing Co. v. Huddleston, 795 S.W.2d 669, 670-71 (Tenn. 1990) (holding that a long-term truck lease agreement and a fuel
agreement were truly separate agreements and should be treated as separate transactions for sales tax purposes, despite
being embodied in a single contract document).

3

When a transaction involves taxable and nontaxable components and the transaction’s true object
10
11
12
13
14
or a “crucial,”
“essential,”
“necessary,”
“consequential,”
or “integral”
element of the
15
transaction is subject to tax, the entire transaction is subject to sales tax. Only if the true object of
the transaction is not independently subject to sales tax and the items that would be subject to sales
tax are “merely incidental” to the true object of the transaction will the transaction not be subject to
16
sales tax.
For the reasons explained below, the true object of the transactions at issue is the lease or rental of
a [TRANSPORTATION VEHICLE] to a retail customer. Accordingly, all of the Taxpayer’s fees are
subject to the Tennessee sales and use tax.
MEMBERSHIP FEES
The Membership Fees are subject to the Tennessee sales and use tax because the true object of
these transactions is the lease or rental of tangible personal property, which is taxable under TENN.
CODE ANN. § 67-6-204(a).

10

See, e.g., Thomas Nelson, Inc. v. Olsen, 723 S.W.2d 621, 624 (Tenn. 1987) (holding that a transaction involving the sale of nontaxable intangible advertising concepts was nevertheless subject to sales tax on the entire amount of the transaction because
advertising models, which were tangible personal property, were an “essential,” “crucial,” and “necessary” element of the
transaction).
11

Id.; see also AT&T Corp. v. Johnson, No. M2000-01407-COA-R3-CV, 2002 WL 31247083, at *8 (Tenn. Ct. App. Oct. 8, 2002)
(holding that a transaction involving the sale of engineering services along with separately itemized tangible
telecommunications systems was subject to sales tax on the entire amount of the contract because “equipment, engineering,
and installation combine in this instance to produce BellSouth’s desired result: a functioning item of tangible personal
property assembled on the customer’s premises,” and further describing the engineering services as “‘essential’” and
“‘integral’” to the sale of tangible personal property).
12

See supra note 11.

13

See Rivergate Toyota, Inc. v. Huddleston, No. 01A01-9602-CH-00053, 1998 WL 83720, at *4 (Tenn. Ct. App. Feb. 27, 1998)
(holding that a transaction involving the commission and distribution of advertising brochures was subject to sales tax on the
“‘entire cost of the transaction’” because, although the transaction involved a number of services, the brochures themselves
“were not inconsequential elements of the transaction but, in fact, were the sole purpose of the contract”).

14

See AT&T Corp. v. Johnson, 2002 WL 31247083, at *8.

15

See Tenn. Dept. of Rev. Ltr. Rul. 14-10 (Oct. 14, 2014) (discussing Tennessee law regarding the “true object” test).

16

See generally id.

4

[TRANSPORTATION VEHICLES] are clearly tangible personal property because they are “property that
17
can be seen, weighed, measured, felt, or touched.” The Taxpayer is transferring possession of
tangible personal property to its customers for a consideration, without transferring title to the
property. Thus, the Taxpayer is leasing or renting tangible personal property to its customers, and
such transfer is subject to the Tennessee sales and use tax.
One could argue that the Membership Fees are not lease or rental payments because a customer
could pay a fee to join the Taxpayer’s program, and never actually use a [TRANSPORTATION
VEHICLE]. While this may be true, it is also true that the Taxpayer does not charge additional fees for
simply checking out a [TRANSPORTATION VEHICLE]. Additionally, the Membership itself confers no
benefits other than the right to use a [TRANSPORTATION VEHICLE]. Thus, the Taxpayer’s customers
do not purchase a Membership for any reason other than to use a [TRANSPORTATION VEHICLE].
The Taxpayer has inquired whether its Membership Fees are exempt from sales and use tax under
TENN. CODE ANN. § 67-6-330(a)(3). TENN. CODE ANN. § 67-6-212 (2013), informally referred to as the
“amusement tax,” imposes “a tax at a rate equal to the rate of tax levied on the sale of tangible
18
personal property at retail by Tenn. Code Ann. § 67-6-202 (the sales tax) on the sales price” of
certain recreational and entertainment activities. One of the items listed as taxable under TENN. CODE
19
ANN. § 67-6-212 is “[d]ues or fees to membership sports and recreation clubs.”
TENN. CODE ANN. § 67-6-330(a) exempts from the amusement tax certain transactions that are
otherwise taxable as “amusements” under TENN. CODE ANN. § 67-6-212. TENN. CODE ANN. § 67-6330(a)(3) provides an exemption for “[m]embership application fees, dues or contributions except
that portion attributable to admission prices, paid to institutions and organizations that have
received a determination of exemption from the internal revenue service, pursuant to 26 U.S.C.
§ 501(c)(3), (8) and (19) that are currently operating under such exemption.” As noted above, the
Taxpayer is a 501(c)(3) organization.
The Taxpayer’s Membership Fees fail to qualify under this exemption because under the application
of the true object analysis, the Membership Fees are charges for the lease or rental of tangible
personal property and are not membership dues within the meaning of TENN. CODE ANN. § 67-6330(a)(3). Accordingly, the Membership Fees are properly subject to sales and use tax under TENN.
CODE ANN. § 67-6-204(a) as charges for the lease or rental of tangible personal property.

17

TENN. CODE ANN. § 67-6-102(89)(A).

18

TENN. CODE ANN. § 67-6-212(a) (2013). See also TENN. COMP. R. & REGS. 1320-05-01-.115.

19

TENN. CODE ANN. § 67-6-212(a)(1) (2013).

5

SINGLE USE FEES
The Single Use Fees are subject to the Tennessee sales and use tax because they are charges for the
retail sale or rental of tangible personal property. The Single Use Fees are not exempt from the
Tennessee sales and use tax pursuant to TENN. CODE ANN. § 67-6-330(a)(5)(ii).
The Single Use Fees are subject to the Tennessee sales and use tax as the rental of tangible personal
property for a consideration. As stated above, the Taxpayer is transferring possession of tangible
personal property to its customers for a consideration, without transferring title to the property.
Thus, the Taxpayer is renting tangible personal property to its customers, and such transfer is
subject to the Tennessee sales and use tax.
The Taxpayer has inquired whether its Single Use Fees are exempt from sales tax under TENN. CODE
ANN. § 67-6-330(a)(5)(ii), which exempts from the sales tax on amusements the sales price of
admissions to amusement or recreational activities conducted, produced or provided by
organizations that are exempt from federal income tax under Internal Revenue Code Section
20
501(c)(3).
Although the Taxpayer is an organization that is exempt from federal income tax under Internal
Revenue Code Section 501(c)(3), the Single Use Fee is not a fee paid for admission to an amusement
or recreational activity conducted, produced or provided by the Taxpayer. The Single Use Fee is a
payment for the rental of a [TRANSPORTATION VEHICLE] for an allotted amount of time. Therefore
the Single Use Fees are subject to sales and use tax under TENN. CODE ANN. § 67-6-204(a) as charges
for the rental of tangible personal property.
USAGE FEES, OUT OF HUB FEES, OUT OF SERVICE AREA FEES, AND STOLEN [TRANSPORTATION VEHICLE] FEES
Regardless of their characterization, the Taxpayer’s Usage Fees, Out of Hub Fees, Out of Service Area
Fees, and Stolen [TRANSPORTATION VEHICLE] Fees (collectively the “Additional Fees”) are all
additional charges for the rental of tangible personal property and as such are subject to the
Tennessee sales and use tax.
As discussed above, sales tax is due on “the sales price of all leases and rentals of tangible personal
21
property.” The “sales price” upon which tax is due is the “total amount of consideration paid,
including cash, credit, property, and services, for which personal property or services are sold,
22
leased, or rented, valued in money, whether received in money or otherwise.” Accordingly, the
Additional Fees will be included in the sales price if they constitute part of the total consideration for
the rental of a [TRANSPORTATION VEHICLE].
As noted above, the “sales price” of a lease or rental is “the total amount of consideration” for which
23
personal property is leased or rented. The Tennessee Court of Appeals has stated that, for
20

TENN. CODE ANN. § 67-6-330(a)(5)(A)(ii).

21

TENN. CODE ANN. § 67-6-204(a).

22

TENN. CODE ANN. § 67-6-102(79)(A). See also TENN. COMP. R. & REGS. 1320-05-01-.32(1) (1987).

23

Id.

6

purposes of the Tennessee sales and use tax, the term “consideration” means “either a benefit to
24
the promisor or a detriment to or obligation on the promisee.” The Additional Fees clearly
constitute an obligation on the part of the customer who is required to pay one or more of them in
the event he or she fails to timely return a [TRANSPORTATION VEHICLE], fails to properly dock a
[TRANSPORTATION VEHICLE], takes a [TRANSPORTATION VEHICLE] out of the designated service
area, or fails to return a [TRANSPORTATION VEHICLE] within 24 hours. Moreover, the customer takes
on this obligation specifically in return for the right to rent a [TRANSPORTATION VEHICLE].
Accordingly, the Additional Fees constitute part of the total consideration paid for the rental of a
[TRANSPORTATION VEHICLE]. The Additional Fees are therefore properly included in the total sales
price charged for renting a [TRANSPORTATION VEHICLE] for purposes of TENN. CODE ANN. § 67-6204(a), and as such are subject to the Tennessee sales and use tax.

Jerry Ivery
Assistant General Counsel

APPROVED:

David Gerregano
Commissioner of Revenue

DATE:

9/21/18

24

Nashville Clubhouse, Inc. v. Johnson, 27 S.W.3d 542, 545 (Tenn. Ct. App. 2000) (citing Trailer Conditioners, Inc. v. Huddleston, 897
S.W.2d 728, 731 (Tenn. Ct. App. 1995)).

7