Tennessee House Passes Nexus Bill

On February 16, 2012, the Tennessee House of Representatives unanimously passed H2370, which is the result of a compromise between the state and Amazon.com regarding affiliate nexus. Federal case law establishes that a seller must have sufficient connections, or nexus, with Tennessee in order for the state constitutionally to subject a seller in the state to sales and use tax collection responsibilities. This bill would provide requirements for determining whether affiliates have physical presence in Tennessee sufficient to establish nexus with the state. The law would sunset by January 1, 2014, if not before. It is expected to be taken up by the Tennessee Senate shortly.