TCA § 67-6-102 — Chapter definitions — Definitions applicable for taxation of charges for mobile telecommunications services. [Effective until July 1, 2021. See the version effective on July 1, 2021.]

As used in this chapter, unless the context otherwise requires: “Advertising agency” means a business, more than eighty percent (80%) of whose gross receipts in the previous taxable year were, or in the first taxable year are reasonably projected to be, from charges for advertising services. For purposes of this definition, “gross receipts” does not include charges for printing, imprinting, reproduction, publishing of tangible personal property or photography to the extent that: The activity was not performed by the business itself but was contracted out to another business; and The charges for the activity were passed through the business to its client; “Advertising materials” means tangible personal property or its digital equivalent produced to advertise a product, service, idea, concept, issue, place or thing, including, but not limited to, brochures, catalogs and point-of-purchase materials, but not including preliminary artwork, and not including original sound recordings or video recordings produced by recording studios, television studios, video production studios or by or for advertising agencies, or masters produced from the original recordings, regardless of whether the original recordings or masters are produced in a tangible medium or a digital equivalent; “Advertising services” means services rendered by an advertising agency to promote a product, service, idea, concept, issue, place or thing, including services rendered to design and produce advertising materials prior to the acceptance of the advertising materials for reproduction or publication, including, but not limited to: Advice and counseling regarding marketing and advertising; Strategic planning for marketing and advertising; Consumer research; Account planning; Public relations; Design; Layout; Preparation of preliminary art; Creative consultation, coordination, media placement, direction and supervision; Script and copywriting; Editing; Supervision of the production of advertising materials, including quality control; Direct mail; and Account management services; “Advertising services” does not include the production of final artwork or advertising materials; “Agricultural purposes” means operating tractors or other farm equipment used exclusively, whether for hire or not, in plowing, planting, harvesting, raising or processing of farm products at a farm, nursery or greenhouse, operating farm irrigation systems, or operating motor vehicles or other logging equipment used exclusively, whether for hire or not, in cutting and harvesting trees, when the vehicles or equipment are not operated upon the public highways of this state; “Aircraft” has the same meaning used in § 42-1-101; “Alcoholic beverages” means beverages that are suitable for human consumption and contain one-half of one percent (0.5%) or more of alcohol by volume; “Ancillary services” means services that are associated with, or incidental to, the provision of telecommunications services, including, but not limited to, detailed telecommunications billing service, directory assistance service, vertical service, and voice mail service. As used in this subdivision (7): “Conference bridging service” means an ancillary service that links two (2) or more participants of an audio or video conference call, and may include the provision of a telephone number. Conference bridging service does not include the telecommunications services used to reach the conference bridge; “Detailed telecommunications billing service” means an ancillary service of separately stating information pertaining to individual calls on a customer's billing statement; “Directory assistance” means an ancillary service of providing telephone number information, and address information; “Vertical service” means an ancillary service that is offered in connection with one (1) or more telecommunications services, that offers advanced calling features that allow customers to identify callers and to manage multiple calls and call connections, including conference bridging services; and “Voice mail service” means an ancillary service that enables the customer to store, send or receive recorded messages. Voice mail service does not include any vertical services that the customer may be required to have in order to utilize the voice mail service; “Business” means any activity engaged in by any person, or caused to be engaged in by such person, with the object of gain, benefit, or advantage, either direct or indirect; “Business” does not include occasional and isolated sales or transactions by a person not regularly engaged in business, or the occasional and isolated sale at retail or use of services sold by or purchased from a person not regularly engaged in business as a vendor of taxable services, or from one who is such a vendor but is not normally a vendor with respect to the services sold or purchased in such occasional or isolated transaction. “Business” does not include those occasional or isolated sales or transactions by such a person involving mobile homes or house trailers, as defined by § 55-4-111, when the consummation of such exclusively involves the assumption by the purchaser of a previously existing finance contract and no other consideration is received by the seller. “Business” does not include any sales or use tax of tangible personal property of any type sold directly to consumers by any person, including, but not limited to, the Girl Scouts or county fairs; provided, however, that the tangible personal property is not regularly sold by the person or is regularly sold by the person only during a temporary sales period that occurs on a semiannual, or less frequent, basis, or, if sold by a volunteer fire department, only during a temporary sales period that occurs no more than four (4) times per calendar year. For charitable entities whose primary purpose is fundraising in support of a city, county, or metropolitan library system, “business” does not include sales, including online sales, that the charitable entity elects to make in lieu of two (2) semiannual temporary sales periods; provided, that the sales do not exceed three hundred thousand dollars ($300,000) per calendar year; and provided further, that the election by the charitable entity must remain in effect for no less than four (4) years. For a community foundation described in 26 U.S.C. § 170(c)(2), “business” does not include sales that the community foundation elects to make in lieu of two (2) semiannual temporary sales periods; provided, that in any calendar year, the sales shall take place during no more than two (2) auctions, which last no more than twenty-four (24) hours, in each county designated to receive charitable support from a fund or trust that comprises a component part of the community foundation, as described in 26 CFR § 1.170A-9(f)(11)(ii); “Business” includes occasional and isolated sales or transactions of aircraft, vessels, or motor vehicles between corporations and their members or stockholders and also includes such transactions caused by the merger, consolidation, or reorganization of corporations. “Business” also includes occasional and isolated sales or transactions of aircraft, vessels, or motor vehicles between partnerships and the partners thereof and transfers between separate partnerships. Transfers caused by the dissolution of a partnership due solely to a partner, in a partnership composed of three (3) or more persons, voluntarily ceasing to be associated in the carrying on of business of the partnership, as provided in § 61-1-128 [repealed], is not included in “business.” “Business” shall be construed to include occasional and isolated sales or transactions by such a person involving aircraft, vessels or motor vehicles, which terms include trailers and special motor equipment sold in conjunction therewith, as defined by and required to be registered under the laws of Tennessee with an agency of this state or under the laws of the United States with an agency of the federal government, unless such sales or transactions are otherwise exempt under this chapter or are sales between persons who are married, lineal relatives or spouses of lineal relatives, or siblings. Such sales or transactions involving aircraft based in this state shall be presumed to be made and taxable in this state; and any registration reflecting such aircraft that are so based shall constitute evidence thereof; “Candy” means a preparation of sugar, honey, or other natural or artificial sweeteners in combination with chocolate, fruits, nuts, or other ingredients or flavorings in the form of bars, drops, or pieces. Candy shall not include any preparation containing flour and shall require no refrigeration; “Certified automated system” means software certified under the Streamlined Sales and Use Tax Agreement (SSUTA) to calculate the tax imposed by each jurisdiction on a transaction, determine the amount of tax to remit to the appropriate state, and maintain a record of the transaction; “Certified service provider” means an agent certified under the Streamlined Sales and Use Tax Agreement to perform all of the seller's sales and use tax functions, other than the seller's obligation to remit tax on its own purchases; “Clothing” means all human wearing apparel suitable for general use; “Clothing accessories or equipment” means incidental items worn on the person or in conjunction with clothing; “Coin-operated telephone service” means a telecommunications service paid for by inserting money into a telephone accepting direct deposits of money to operate; “Commissioner” means and includes the commissioner of revenue or the commissioner's duly authorized assistants; “Common carrier” means every person holding a certificate of public convenience and necessity as a common carrier from the interstate commerce commission or the United States department of transportation or its predecessor agency of the federal government; “Computer” means an electronic device that accepts information in digital or similar form and manipulates it for a result based on a sequence of instructions; “Computer software” means a set of coded instructions designed to cause a computer or automatic data processing equipment to perform a task; “Computer software maintenance contract” means a contract that obligates a person to provide a customer with future updates or upgrades to computer software, support services with respect to computer software, or both. However, “computer software maintenance contract” does not include telephone or other support services that are optional and are sold separately and invoiced separately and do not include any transfer, repair or maintenance of computer software on the part of the seller; “Construction machinery” means machinery designed for and used exclusively in the preparation for, assembly, fabrication, and finishing of permanent improvements to real estate; “Cost price” means the actual cost of articles of tangible personal property without any deductions therefrom on account of the cost of materials used, labor, or service costs, transportation charges, or any expenses whatsoever; “Data center” means a building or buildings, either newly constructed, expanded, or remodeled, housing high-tech computer systems and related equipment; “Dealer” means every person, as used in this chapter, including Model 1, Model 2, and Model 3 sellers, where the context requires, who: Manufactures or produces tangible personal property for sale at retail, for use, consumption, distribution, or for storage to be used or consumed in this state; Imports, or causes to be imported, tangible personal property from any state or foreign country, for sale at retail, for use, consumption, distribution, or for storage to be used or consumed in this state; Sells at retail, or who offers for sale at retail, or who has in such person's possession for sale at retail, or for use, consumption, distribution, or storage to be used or consumed in this state, tangible personal property as defined in this section; Has sold at retail, used, consumed, distributed, or stored for use or consumption in this state, tangible personal property and who cannot prove that the tax levied by this chapter has been paid on the sale at retail, the use, the consumption, the distribution, or the storage of the tangible personal property; Leases or rents tangible personal property, as defined in this chapter, for a consideration, permitting the use or possession of the property without transferring title to such property; Is the lessee or renter of tangible personal property, as defined in this chapter, and who pays to the owner of such property a consideration for the use or possession of such property without acquiring title to such property; Maintains or has within this state, directly or by a subsidiary, an office, distributing house, sales room or house, warehouse, or other place of business; Furnishes any of the things or services taxable under this chapter; Has any representative, agent, salesperson, canvasser or solicitor operating in this state, or any person who serves in such capacity, for the purpose of making sales or the taking of orders for sales, regardless of whether such representative, agent, salesperson, canvasser or solicitor is located here permanently or temporarily, and regardless of whether an established place of business is maintained in this state; Engages in the regular or systematic solicitation of a consumer market in this state by the distribution of catalogs, periodicals, advertising fliers, or other advertising, or by means of print, radio or television media, by telegraphy, telephone, computer data base, cable, optic, microwave, or other communication system; Uses tangible personal property, whether the title to such property is in such person or some other entity, and whether or not such other entity is required to pay a sales or use tax, in the performance of such person's contract or to fulfill such person's contract obligations, unless such property has previously been subjected to a sales or use tax, and the tax due thereon has been paid; Sells at retail or charges admission, dues or fees as defined in this chapter; Rents or provides space to a dealer without a permanent location in this state or to dealers who are registered for sales tax at other locations in this state, but who are making sales at this location on a less than permanent basis; provided, that “dealer” does not include flea market operators; or Acts as a marketplace facilitator; “Delivered electronically” means delivered to the purchaser by means other than tangible storage media; “Delivery charges” means charges by the seller of personal property or services for preparation and delivery to a location designated by the purchaser of personal property or services, including, but not limited to, transportation, shipping, postage, handling, crating, and packing. Delivery charges shall not include delivery for direct mail when the charges are separately stated on an invoice or similar billing document given to the purchaser. If the shipment includes exempt property and taxable property, the seller should allocate the delivery charge by using: A percentage based on the total sales price of the taxable property compared to the sales prices of all property in the shipment; or A percentage based on the total weight of the taxable property compared to the total weight of all property in the shipment; The seller shall tax the percentage of the delivery charge allocated to the taxable property but does not have to tax the percentage allocated to the exempt property; “Delivery network company” means a business entity that maintains an internet website or mobile application used to facilitate delivery services for the sale of local products; “Delivery services” means the pickup of one (1) or more local products from a local merchant and delivery of the local products to a customer. “Delivery services” do not include any delivery requiring over fifty (50) miles of travel from the local merchant to the customer; “Dietary supplement” means any product, other than tobacco, intended to supplement the diet that: Contains one (1) or more of the following dietary ingredients: A vitamin; A mineral; An herb or other botanical; An amino acid; A dietary substance for use by humans to supplement the diet by increasing the total dietary intake; or A concentrate, metabolite, constituent, extract, or combination of any ingredient described in subdivisions (28)(A)(i)-(v); Is intended for ingestion in tablet, capsule, powder, softgel, gelcap, or liquid form, or if not intended for ingestion in such a form, is not represented as conventional food and is not represented for use as a sole item of a meal or of the diet; and Is required to be labeled as a dietary supplement, identifiable by the supplement facts box found on the label and as required pursuant to 21 CFR 101.36; “Digital audio works” means works that result from the fixation of a series of musical, spoken, or other sounds, that are transferred electronically, including prerecorded or live songs, music, readings of books or other written materials, speeches, ringtones, or other sound recording. For purposes of this subdivision (29), “ringtones” means digitized sound files that are downloaded onto a device and that may be used to alert the customer with respect to a communication. “Digital audio works” does not include audio greeting cards sent by electronic mail; “Digital audio-visual works” means a series of related images that, when shown in succession, impart an impression of motion, together with accompanying sounds, if any, that are transferred electronically. “Digital audio-visual works” includes motion pictures, musical videos, news and entertainment programs, and live events. “Digital audio-visual works” does not include video greeting cards sent by electronic mail or video or electronic games; “Digital books” means works that are generally recognized in the ordinary and usual sense as “books” that are transferred electronically, including works of fiction and nonfiction and short stories. “Digital books” does not include newspapers, magazines, periodicals, chat room discussions or weblogs; “Direct mail” means printed material delivered or distributed by United States mail or other delivery service to a mass audience or to addressees on a mailing list provided by the purchaser or at the direction of the purchaser when the cost of the items are not billed directly to the recipients. “Direct mail” includes tangible personal property supplied directly or indirectly by the purchaser to the direct mail seller for inclusion in the package containing the printed material. “Direct mail” does not include multiple items of printed material delivered to a single address; “Direct pay permit” means special written permission granted to a taxpayer by the commissioner to make all purchases free of the sales or use tax and report all sales or use tax due directly to the department; “Direct pay permit holder” means a taxpayer who holds a direct pay permit; “Drug” means a compound, substance or preparation, and any component of a compound, substance or preparation, other than food and food ingredients, dietary supplements or alcoholic beverages: Recognized in the official United States Pharmacopoeia, official Homeopathic Pharmacopoeia of the United States, or official National Formulary, and supplement to any of them; Intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease; or Intended to affect the structure or any function of the body; “Durable medical equipment” means equipment that: Can withstand repeated use; Is primarily and customarily used to serve a medical purpose; Generally is not useful to a person in the absence of illness or injury; and Is not worn in or on the body; “Durable medical equipment” includes repair and replacement parts for the equipment; provided, however, that the repair and replacement parts shall not include parts, components, or attachments that are for single patient use. “Durable medical equipment” does not include mobility enhancing equipment; “Electronic” means relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities; “Energy resource recovery facility” means a facility for the production of energy in the form of steam or chilled water from the controlled burning of combustible materials, including, but not limited to, coal, fuel oil, or natural gas, where such energy is to be used in a system for heating and cooling five (5) or more separate buildings; “Fabricating or processing tangible personal property for resale” means only tangible personal property that is fabricated or processed for resale and ultimate use or consumption off the premises of the one engaging in such fabricating or processing, or hot mix asphalt and crushed stone fabricated by a contractor for use by the contractor in highway or road construction projects funded by tax revenues. “Fabricating or processing tangible personal property for resale” shall be deemed to include providing fabrication and repair services to aircraft owned by nonaffiliated business entities whether commercial, governmental or foreign; provided, that the dealer performing such services qualifies for the credit allowed in § 67-4-2109(b). “Fabricating or processing tangible personal property for resale” shall not include any other type of repair services. “Fabricating or processing tangible personal property for resale” includes the processing of photographic film into negatives and/or photographic prints for resale; “Final artwork” means tangible personal property or its digital equivalent that is suitable for use in producing advertising materials and includes, but is not limited to, photographs, illustrations, drawings, paintings, calligraphy, models and similar works that are used to produce advertising materials, but does not include preliminary artwork or original sound recordings or video recordings produced by recording studios, television studios, video production studios, or by or for advertising agencies, or masters produced from the original recordings regardless of whether the original recordings or masters are produced in a tangible medium or a digital equivalent; “Flea market” means a place of business that provides space more than two (2) times a year to two (2) or more persons for the purpose of making sales at retail of tangible personal property that, during the usual course of being displayed or offered for sale, is not stored or displayed permanently at that space. “Flea market” does not include hotels, convention centers, municipal auditoriums, municipal coliseums, or gun shows, if such gun shows are sponsored by a not-for-profit corporation; “Flea market operator” means any person who receives compensation for providing space more than two (2) times a year to two (2) or more persons for the purpose of making sales at retail of tangible personal property that, during the usual course of being displayed or offered for sale, is not stored or displayed permanently at that space. “Flea market operator” does not include a hotel, convention center, municipal auditorium, municipal coliseum, or gun show operator, if such gun shows are sponsored by a not-for-profit corporation; “Food and food ingredients” means substances, whether in liquid, concentrated, solid, frozen, dried, or dehydrated form, that are sold for ingestion or chewing by humans and are consumed for their taste or nutritional value. “Food and food ingredients” does not include alcoholic beverages, tobacco, candy, dietary supplements, or prepared food; “Grooming and hygiene products” are soaps and cleaning solutions, shampoo, toothpaste, mouthwash, antiperspirants, and suntan lotions and screens, regardless of whether the items meet the definition of over-the-counter drugs; “Gross sales” means the sum total of all retail sales of tangible personal property and all proceeds of services taxable under this chapter as defined in this section, without any deduction whatsoever of any kind or character, except as provided in this chapter; “Industrial machinery” means: Machinery, apparatus and equipment with all associated parts, appurtenances and accessories, including hydraulic fluids, lubricating oils, and greases necessary for operation and maintenance, repair parts and any necessary repair or taxable installation labor therefor, that is necessary to, and primarily for, the fabrication or processing of tangible personal property for resale and consumption off the premises, or pollution control facilities primarily used for air pollution control or water pollution control, where the use of such machinery, equipment or facilities is by one who engages in such fabrication or processing as one's principal business or who engages in the fabrication or processing of materials into trusses, window units or door units for resale as part of the principal business of the sale of building supplies either within or without this state, or such use by a county, municipality, or water and wastewater treatment authority created by private act or pursuant to the Water and Wastewater Treatment Authority Act, compiled in title 68, chapter 221, part 6, or a contractor pursuant to a contract with the county, municipality, or water and wastewater treatment authority for use in water pollution control or sewage systems, also mining machinery, apparatus equipment and materials, with all associated parts and accessories, including repair parts and any necessary repair or installation labor, that is necessary to and primarily for: The removal, extraction or detachment of coal from land by surface, underground or other lawful methods of mining and the construction or maintenance of necessary ingress and egress from the mine; The removal, handling and replacement of overburden and spoils materials; or The reclamation of mined areas reclaimed under state or federal laws, rules or regulations; An expansion to an existing warehouse or distribution facility in this state through an aggregate investment in excess of twenty million dollars ($20,000,000) by the taxpayer, and/or a lessor to the taxpayer, over a period not exceeding three (3) years, consisting of an investment in excess of ten million dollars ($10,000,000) in the renovation or expansion of an existing building and/or the purchase of new equipment for such a building, together with an investment in excess of ten million dollars ($10,000,000) in the construction of a new, previously unoccupied building and/or equipment for such a building; As used in this chapter, “pollution control facilities” means any system, method, improvement, structure, device or appliance appurtenant thereto used or intended for the primary purpose of eliminating, preventing or reducing air or water pollution, or for the primary purpose of treating, pretreating, recycling or disposing of any hazardous or toxic waste, solid or liquid, when such pollutants are created as a result of fabricating or processing by one who engages in fabricating or processing as such person's principal business activity, which, if released without such treatment, pretreatment, modification or disposal, might be harmful, detrimental or offensive to the public and the public interest; Machinery that is necessary to and primarily for remanufacturing industrial machinery as defined in subdivision (46)(A) when such utilization is by one whose principal business is that of remanufacturing industrial machinery. For the purposes of this subdivision (46)(B), “remanufacturing” means making new or different products with new or different functions from the scrap materials used to make them; Machinery utilized in the pre-press and press operations in the business of printing, including plates and cylinders, and including the component parts and fluids or chemicals necessary for the specific mechanical or chemical actions or operations of such machinery, plates and cylinders, regardless of whether or not the operations occur at the point of retail sales; Such industrial machinery necessary to and primarily for the fabrication and processing of tangible personal property for resale or used primarily for the control of air pollution or water pollution includes, but is not limited to: Machines used for generating, producing, and distributing utility services, electricity, steam, and treated or untreated water; and Equipment used in transporting raw materials from storage to the manufacturing process, and transporting finished goods from the end of the manufacturing process to storage; (i) Machinery used to package manufactured items, where the use of such machinery is by a person whose principal business is fabricating or processing tangible personal property for resale. Notwithstanding the principal business of the user, this exemption shall also apply where the use of such machinery at a location is to package automotive aftermarket products manufactured at other locations by the same person or by a corporation affiliated with the manufacturing corporation such that: Either corporation directly owns or controls one hundred percent (100%) of the capital stock of the other corporation; or One hundred percent (100%) of the capital stock of both corporations is directly owned or controlled by a common parent; To “package,” as used in subdivision (46)(E)(i), refers only to the fabrication and/or installation of that packaging that will accompany the product when sold at retail; Such industrial machinery necessary to and primarily for the fabrication or processing of tangible personal property for resale and consumption off the premises or used primarily for the control of air pollution or water pollution does not include machinery, apparatus and equipment used prior to or after equipment exempted by subdivision (46)(D)(ii), and does not include equipment used for maintenance or the convenience or comfort of workers; Machinery, apparatus and equipment with all associated parts, appurtenances and accessories, including hydraulic fluids, lubricating oils and greases necessary for operation and maintenance, repair parts and any necessary repair or taxable installation labor therefor, that is necessary to, and primarily for, the fabricating or processing of prescription eyewear, where a majority of such eyewear is ultimately dispensed to patients in states other than Tennessee; (i) Material handling equipment and racking systems, used by the taxpayer directly and primarily for the storage or handling and movement of tangible personal property in a qualified, new or expanded warehouse or distribution facility, that are purchased beginning one (1) year prior to the start of the construction or expansion and ending one (1) year after the substantial completion of the construction or expansion of the facility, but in no event shall the period exceed three (3) years. “Qualified, new or expanded warehouse or distribution facility” means a new or expanded facility, that meets the requirements set out in this subdivision (46)(H), for the storage or distribution of finished tangible personal property. Such facilities shall not include a building where tangible personal property is fabricated, processed, assembled or sold over-the-counter to consumers, except for taxpayers that qualify under chapter 185 of the Public Acts of 1995, or are configuring, testing or packaging computer products. “Configuring” computer products means integrating a computer with peripheral computer products, such as a hard disk drive, additional memory or software. A qualifying facility must also be: A warehouse or distribution facility constructed in this state through an investment in excess of ten million dollars ($10,000,000) by the taxpayer, and/or a lessor to the taxpayer, over a period not exceeding three (3) years, in a newly constructed and previously unoccupied building and/or equipment for the facility; An expansion to an existing warehouse or distribution facility, previously qualified under subdivision (46)(H)(i), through an additional investment in excess of ten million dollars ($10,000,000) by the taxpayer, and/or a lessor to the taxpayer over an additional period not exceeding three (3) years, for additions to the building and the purchase of new equipment for use in the expanded facility; A warehouse or distribution facility in this state that is purchased and either renovated or expanded through an investment in excess of ten million dollars ($10,000,000) in such purchase and renovation or expansion by the taxpayer, and/or a lessor to the taxpayer, including the purchase of new equipment for such a building, over a period not exceeding three (3) years; or A taxpayer shall qualify for the exemption afforded to material handling and racking systems under subdivision (46)(H)(i) by submitting an application to the commissioner for the exemption, together with a plan describing the investment to be made. The application and plan shall be submitted on forms prescribed by the commissioner. The plan shall demonstrate that the requirements of the law will be met. Upon approval of the exemption request and plan for investment, purchases of the equipment may be made without payment of the sales or use tax. However, if the requisite investment is not made in the time period required, or the terms of the statute are not met, the taxpayer shall be subject to assessment for any tax, penalty or interest that would otherwise have been due; Material handling equipment and racking systems used in a warehouse and distribution facility, subject to all the requirements and conditions of subdivision (46)(H), except: The required investment in excess of ten million dollars ($10,000,000) may also be made in a previously occupied facility: Through the purchase of a building, and/or the purchase of new equipment for use in the building no later than one (1) year after the purchase of the building; or Through the purchase of new equipment for use in a leased building, not qualifying under subdivision (46)(I)(i)(a ), made no later than one (1) year after the date of the lease agreement; and Any purchases exempted from tax for use in the facility described in this subdivision (46)(I) must be made no later than one (1) year after the purchase of the building under subdivision (46)(I)(i)(a ), or no later than one (1) year after the date of the lease agreement under subdivision (46)(I)(i)(b ); “Industrial machinery” does not include machinery, apparatus and equipment, with all associated parts, appurtenances, accessories, repair parts, and necessary repair or taxable installation labor therefor, that is used in the preparation of food for immediate retail sale; “Industrial machinery” also includes any “computer”, “computer network”, “computer software”, or “computer system”, as defined by § 39-14-601 , and any peripheral devices, including, but not limited to, hardware such as printers, plotters, external disc drives, modems, and telephone units, when such items are used in the operation of a qualified data center. For purposes of this subdivision (46)(K), “industrial machinery” includes repair parts, repair or installation services, and warranty or service contracts, purchased for such items used in the operation of a qualified data center; “Industrial machinery” includes machinery, apparatus and equipment with all associated parts, appurtenances, accessories, repair parts and necessary repair or taxable installation labor therefor, that is necessary to and used primarily for the conversion of tangible personal property into taxable specified digital products for resale and consumption off the premises. “Industrial machinery” does not include machinery, apparatus or equipment, with all associated parts, appurtenances, accessories, repair parts and necessary repair or taxable installation labor therefor, that is used primarily for the storage or distribution of such specified digital products following such conversion; “Industrial machinery” also includes machinery, apparatus, and equipment with all associated parts, appurtenances, and accessories, including hydraulic fluids, lubricating oils, and greases necessary for operation and maintenance, repair parts, and any necessary repair or taxable installation labor therefor, that is necessary to, and primarily for, the purpose of research and development; “International,” as used in connection with telecommunications services, means a telecommunications service that originates or terminates in the United States, and terminates or originates outside the United States, respectively. United States includes the District of Columbia and a United States territory or possession; “Interstate,” as used in connection with telecommunications services, means a telecommunications service that originates in one (1) United States state, or a United States territory or possession, and terminates in a different United States state or a United States territory or possession; “Intrastate,” as used in connection with telecommunications services, means a telecommunications service that originates in one (1) United States state or United States territory or possession, and terminates in the same United States state or United States territory or possession; “Layaway sale” means a transaction in which property is set aside for future delivery to a customer who makes a deposit, agrees to pay the balance of the purchase price over a period of time, and, at the end of the payment period, receives the property. An order is accepted for layaway by the seller, when the seller removes the property from normal inventory or clearly identifies the property as sold to the purchaser; “Lease or rental” means any transfer of possession or control of tangible personal property for a fixed or indeterminate term for consideration. A “lease or rental” may include future options to purchase or extend; “Lease or rental” does not include: A transfer of possession or control of property under a security agreement or deferred payment plan that requires the transfer of title upon completion of the required payments; A transfer of possession or control of property under an agreement that requires the transfer of title upon completion of required payments and payment of an option price does not exceed the greater of one hundred dollars ($100) or one percent (1%) of the total required payments; Providing tangible personal property along with an operator for a fixed or indeterminate period of time. A condition of this exclusion is that the operator is necessary for the equipment to perform as designed. For the purpose of this subdivision (51), an operator must do more than maintain, inspect, or set-up the tangible personal property; or Providing a dumpster or other container for waste or debris removal for a fixed or indeterminate period of time along with the delivery and pickup of the dumpster. A condition of this exclusion is that the provider of the dumpster is exclusively responsible for delivery and pickup of the dumpster; “Lease or rental” includes agreements covering motor vehicles and trailers where the amount of consideration may be increased or decreased by reference to the amount realized upon sale or disposition of the property as defined in 26 U.S.C. § 7701(h) (1); This subdivision (51) shall be used for sales and use tax purposes regardless if a transaction is characterized as a lease or rental under generally accepted accounting principles, the Internal Revenue Code (26 U.S.C.), or title 47, chapter 2A, or other federal, state or local law; This subdivision (51) shall be applied only prospectively from the date of adoption [January 1, 2008] and shall have no retroactive impact on existing leases or rentals; “Livestock and poultry feed” means and includes all grains, minerals, salts, proteins, fats, fibers and all vitamins, acids and drugs used and mixed with such ingredients as a growth stimulant, disease preventive, to stimulate feed conversion and make a complete feed; “Local merchant” means a third-party merchant, including, but not limited to, a kitchen, restaurant, grocery store, retail store, convenience store, or business of another type, that is not under common ownership or control with the delivery network company; “Local tax jurisdiction” means a geographic area where the same local option tax, either county tax or a combination of county and municipal tax, applies; “Marketplace” means a physical or electronic place, platform, or forum, including, but not limited to, a store, booth, internet website, catalog, or dedicated sales software application, where tangible personal property or any of the things or services taxable under this chapter are offered for sale; “Marketplace facilitator”: Means a person, including any affiliate of the person, that: For consideration, regardless of whether characterized as fees from the transaction, contracts, or otherwise agrees with a marketplace seller to facilitate the sale of the marketplace seller's tangible personal property or things or services taxable under this chapter through a physical or electronic marketplace operated, owned, or otherwise controlled by the person or the person's affiliate; and Either directly or indirectly through contracts, agreements, or other arrangements with third parties, collects the payment from the purchaser of the marketplace seller's tangible personal property or things or services taxable under this chapter and transmits payment to the marketplace seller; Does not include: A person who exclusively provides advertising services, including listing products for sale, so long as the person does not also engage directly or indirectly through one (1) or more affiliated persons in those activities described in subdivision (56)(A) that are unrelated to advertising services; A person whose activity with respect to marketplace sales is limited to providing payment processing services between two (2) or more parties; A derivatives clearing organization, designated contract market, or foreign board of trade or swap execution facility that is registered with the Commodity Futures Trading Commission (“CFTC registered platforms”), or any clearing members, futures commission merchants, or brokers using the services of CFTC registered platforms; or A person that is a delivery network company; except, that a delivery network company that meets the definition set forth in subdivision (56)(A) may elect, in a reasonable manner and duration prescribed by the department, to be deemed a marketplace facilitator pursuant to this chapter; and Includes a peer-to-peer car sharing program as defined in § 67-4-1901 ; “Marketplace seller” means a person who makes sales through any marketplace operated, owned, or controlled by a marketplace facilitator; “Mobile telecommunications service” means the same as that term is defined in the Mobile Telecommunications Sourcing Act, Public Law 106-252 ( 4 U.S.C. § 124(7) ); “Mobility enhancing equipment” means equipment, including repair and replacement parts to the equipment, but does not include durable medical equipment that: Is primarily and customarily used to provide or increase the ability to move from one place to another and that is appropriate for use either in a home or a motor vehicle; Is not generally used by persons with normal mobility; and Does not include any motor vehicle or equipment on a motor vehicle normally provided by a motor vehicle manufacturer; “Model 1 seller” means a seller that has selected a certified service provider as its agent to perform all of the seller's sales and use tax functions, other than the seller's obligation to remit tax on its own purchases; “Model 2 seller” means a seller that has selected a certified automated system to perform part of its sales and use tax functions, but retains responsibility for remitting the tax; “Model 3 seller” means a seller that has sales in at least five (5) states that are members of the Streamlined Sales and Use Tax Agreement, has total annual sales revenue of at least five hundred million dollars ($500,000,000), has a proprietary system that calculates the amount of tax due each jurisdiction, and has entered into a performance agreement with the member states that establishes a tax performance standard for the seller. As used in this subdivision (62), a seller includes an affiliated group of sellers using the same proprietary system; “OEM headquarters company” means an original equipment manufacturer that is engaged in the business of manufacturing motor vehicles and qualifies to receive the credit provided in § 67-6-224 , or any affiliate thereof. For purposes of this subdivision (63), “affiliate” has the same meaning as provided in § 67-4-2004 ; “OEM headquarters company vehicle” means any motor vehicle subject to registration in accordance with title 55 that is owned by an OEM headquarters company, whether used for sales or service training, advertising, quality control, testing, evaluation or such other uses as approved by the commissioner, and, further, including motor vehicles provided by the OEM headquarters company for use by eligible employees and their eligible family members in accordance with policies established by the OEM headquarters company and approved by the commissioner; (A) “Over-the-counter-drug” means a drug that contains a label that identifies the product as a drug as required by 21 CFR 201.66. The “over-the-counter-drug” label includes: A drug facts panel; or A statement of the active ingredients, with a list of those ingredients contained in the compound, substance or preparation; “Over-the-counter-drug” does not include grooming and hygiene products; “Permanent location” does not include any booths or space located at a flea market, antique mall, craft show, antique show, gun show, auto show or any similar type business; “Person” includes any individual, firm, co-partnership, joint venture, association, corporation, estate, trust, business trust, receiver, syndicate, any governmental agency whose services are essentially a private commercial concern, or other group or combination acting as a unit, in the plural as well as the singular number. “Person” further includes any political subdivision or governmental agency, including electric membership corporations or cooperatives, and utility districts, to the extent that such agency sells at retail, rents or furnishes any of the things or services taxable under this chapter; “Place of primary use” means the street address representative of where the customer's use of the telecommunications service primarily occurs, which must be the residential street address or the primary business street address of the customer. In the case of mobile telecommunications service, “place of primary use” shall be within the licensed service area of the home service provider; “Preliminary artwork” means tangible personal property and digital equivalents that are produced by an advertising agency in the course of providing advertising services solely for the purpose of conveying concepts or ideas or demonstrating an idea or message to a client and includes, but is not limited to concept sketches, illustrations, drawings, paintings, models, photographs, storyboards or similar materials; “Prepaid calling service” means the right to access exclusively telecommunications services that must be paid for in advance and that enable the origination of calls using an access number or authorization code, whether manually or electronically dialed, and that is sold in predetermined units or dollars of which the number declines with use in a known amount;

“Prepaid wireless calling service” means a telecommunications service that provides the right to utilize mobile wireless service, as well as other nontelecommunications services, including the download of digital products delivered electronically, content and ancillary services that must be paid for in advance that is sold in predetermined units of dollars of which the number declines with use in a known amount; (A) “Prepared food” means: Food sold in a heated state or heated by the seller; Two (2) or more food ingredients mixed or combined by the seller for sale as a single item; or Food sold with eating utensils provided by the seller, including plates, knives, forks, spoons, glasses, cups, napkins, or straws. A plate does not include a container or packaging used to transport the food; “Prepared food” in subdivision (72)(A)(ii) does not include food that is only cut, repackaged, or pasteurized by the seller, and eggs, fish, meat, poultry, and foods containing these raw animal foods requiring cooking by the consumer as recommended by the food and drug administration (FDA) in chapter 3, § 401.11 of the FDA’s food code so as to prevent food borne illnesses; “Prescription” means an order, formula or recipe issued in any form of oral, written, electronic, or other means of transmission by a duly licensed practitioner authorized by the laws of this state; “Prewritten computer software” means computer software, including prewritten upgrades, that is not designed and developed by the author or other creator to the specifications of a specific purchaser. The combining of two (2) or more prewritten computer software programs or prewritten portions of computer software does not cause the combination to be other than prewritten computer software. “Prewritten computer software” includes software designed and developed by the author or other creator to the specifications of a specific purchaser when it is sold to a person other than the purchaser. Where a person modifies or enhances computer software of which the person is not the author or creator, the person shall be deemed to be the author or creator only of that person's modifications or enhancements. “Prewritten computer software” or a prewritten portion of the computer software that is modified or enhanced to any degree, where the modification or enhancement is designed and developed to the specifications of a specific purchaser, remains prewritten computer software; provided, however, that where there is a reasonable, separately stated charge or an invoice or other statement of the price given to the purchaser for the modification or enhancement, the modification or enhancement shall not constitute prewritten computer software; “Private communication service” means a telecommunications service that entitles the customer to exclusive or priority use of a communications channel or group of channels between or among termination points, regardless of the manner in which such channel or channels are connected, and includes switching capacity, extension lines, stations, and any other associated services that are provided in connection with the use of such channel or channels; (A) “Prosthetic device” means a replacement, corrective, or supportive device including repair and replacement parts for the replacement, corrective, or supportive device worn on or in the body to: Artificially replace a missing portion of the body; Prevent or correct physical deformity or malfunction; or Support a weak or deformed portion of the body; “Prosthetic device” does not include: Corrective eyeglasses; or Contact lenses; “Protective equipment” means items for human wear, designed as protection of the wearer against injury or disease or as protection against damage or injury of other persons or property, but not suitable for general use; “Purchase price” applies to the measure subject to use tax and has the same meaning as sales price; “Qualified data center” means a data center that has made a required capital investment in excess of one hundred million dollars ($100,000,000) during an investment period not to exceed three (3) years and that creates at least fifteen (15) net new full-time employee jobs during the investment period paying at least one hundred fifty percent (150%) of the states' average occupational wage as defined in § 67-4-2004 . For purposes of this subdivision (79), “required capital investment” means an increase of a business investment in real property, tangible personal property or computer software owned or leased in the state, valued in accordance with generally accepted accounting principles. A capital investment shall be deemed to have been made as of the date of payment or the date the taxpayer enters into a legally binding commitment or contract for purchase or construction. For purposes of this subdivision (79), “full-time employee job” means a permanent, rather than seasonal or part-time employment position for at least twelve (12) consecutive months to a person for at least thirty-seven and one-half (37 ½) hours per week with minimum health care, as described in title 56, chapter 7, part 22. The three-year period for making the required capital investment provided for in this subdivision (79) may be extended by the commissioner of economic and community development for a reasonable period, not to exceed four (4) years, for good cause shown. For purposes of this subdivision (79), “good cause” means a determination by the commissioner of economic and community development that the capital investment is a result of the exemption for industrial machinery used by a qualified data center; “Rain check” means the seller allows a customer to purchase an item at a certain price at a later time, because the particular item was out of stock; (A) “Resale” means a subsequent, bona fide sale of the property, services, or taxable item by the purchaser. “Sale for resale” means the sale of the property, services, or taxable item intended for subsequent resale by the purchaser. Any sales for resale shall, however, be in strict compliance with rules and regulations promulgated by the commissioner; (i) “Sale for resale” does not include a sale of tangible personal property or software to a dealer for use in the business of selling services. Property used in the business of selling services includes, but is not limited to, property that is regularly furnished to purchasers of the service without separate charge. A dealer that sells services shall be considered the end user and consumer of property used in selling, performing, or furnishing such services. However, “sale for resale” does include the following items in the circumstances described: Repair parts or other property sold to a dealer if such property is subsequently transferred to the customer in conjunction with the dealer's performance of repair services, regardless of whether the dealer makes a separately stated charge for such property; Installation parts or other property sold to a dealer if such property is subsequently transferred to the customer in conjunction with the installation of property that remains tangible personal property following such installation, regardless of whether the dealer makes a separately stated charge for such property; Mobile telephones and similar devices sold to a dealer if such property is subsequently transferred to the customer in conjunction with the sale of commercial mobile radio services (CMRS), regardless of whether the dealer makes a separately stated charge for such property; and Food or beverages sold to a hotel, motel, inn or other dealer that provides lodging accommodations if such food or beverages are subsequently transferred to the customer in conjunction with the dealer's sale of lodging accommodations to the customer, regardless of whether the dealer makes a separately stated charge for such property; “Sale for resale” does not include a sale of services to a dealer for use in the business of selling, leasing, or renting tangible personal property or computer software. Services used in the business of selling, leasing, or renting tangible personal property include, but are not limited to, services such as cleaning, maintaining, or repairing property that is held as inventory for sale, lease, or rental. A dealer that sells, leases, or rents tangible personal property or computer software shall be considered the end user and consumer of services used in conducting such business; Nothing in this subdivision (81) shall be construed as amending or otherwise effecting the exemption provided in § 67-6-392 ; “Retail sale” or “sale at retail” means any sale, lease, or rental for any purpose other than for resale, sublease, or subrent; “Retailer” means and includes every person engaged in the business of making sales at retail, or for distribution, use, consumption, storage to be used or consumed in this state or furnishing any of the things or services taxable under this chapter and every marketplace facilitator; (A) “Sale” means any transfer of title or possession, or both, exchange, barter, lease or rental, conditional or otherwise, in any manner or by any means whatsoever of tangible personal property for a consideration, and includes the fabrication of tangible personal property for consumers who furnish, either directly or indirectly, the materials used in fabrication work, and the furnishing, repairing or serving for a consideration of any tangible personal property consumed on the premises of the person furnishing, preparing or serving such tangible personal property; A transaction whereby the possession of property is transferred but the seller retains title as security for the payment of the price shall be deemed a sale; provided, that where title to property is taken by an industrial development corporation, within the meaning of title 7, chapter 53, but the property is leased to a taxpayer, the transaction shall be regarded, for purposes of this chapter, as a sale to and purchase by the industrial development corporation followed by a lease, regardless of whether the lessee has an option to purchase any or all of the property from the industrial development corporation; “Sale” includes the furnishing of any of the things or services taxable under this chapter; “Sale” includes the sale, gifts in connection with valuable contributions, exchange or other disposition of admission, dues or fees to membership sports and recreation clubs, places of amusement or recreational or athletic events or for the privilege of having access to or the use of amusement, recreational, athletic or entertainment facilities. Such establishments or facilities include, but are not limited to, the amusement and recreational facilities and motion picture theaters described in the standard industrial classification index prepared by the bureau of the budget of the federal government; “Sale” includes the renting or providing of space to a dealer or vendor without a permanent location in this state or to persons who are registered for sales tax at other locations in this state but who are making sales at this location on a less than permanent basis; “Sale” includes the processing of photographic film into negatives and/or photographic prints for resale; “Sale” includes charges for admission, dues or fees that constitute a sale under this subdivision (84), except tickets for admission sold to a Tennessee dealer for resale upon presentation of a resale certificate. Dealers registered with the state for sales tax purposes may purchase tickets for resale without payment of tax upon presentation to the vendor of a valid certificate of resale; “Sale” includes all transactions that the commissioner, upon investigation, finds to be in lieu of sales; “Sale” includes a transfer of possession or control of property under a security agreement or deferred payment plan that requires the transfer of title upon completion of the required payments; “Sale” includes a transfer of possession or control of property under an agreement that requires the transfer of title upon completion of required payments and payment of an option price that does not exceed the greater of one hundred dollars ($100) or one percent (1%) of the total required payments; “Sale” includes any transfer of title or possession, or both, lease or licensing, in any manner or by any means whatsoever of computer software for consideration, and includes the creation of computer software on the premises of the consumer and any programming, transferring or loading of computer software into a computer; and “Sale” includes any sale, as otherwise defined in this subdivision (84), made or facilitated by a marketplace facilitator; (A) “Sales price” applies to the measure subject to sales tax and means the total amount of consideration, including cash, credit, property, and services, for which personal property or services are sold, leased, or rented, valued in money, whether received in money or otherwise, without any deduction for the following: The seller's cost of the property sold; The cost of materials used, labor or service cost, interest, losses, all costs of transportation to the seller, all taxes imposed on the seller, and any other expense of the seller; Charges by the seller for any services necessary to complete the sale, other than delivery and installation charges; Delivery charges; Installation charges; and The value of exempt personal property given to the purchaser where taxable and exempt personal property have been bundled together and sold by the seller as a single product or piece of merchandise; “Sales price” does not include: Discounts, including cash, term, or coupons that are not reimbursed by a third party that are allowed by a seller and taken by a purchaser on a sale; Interest, financing, and carrying charges from credit extended on the sale of personal property or services, if the amount is separately stated on the invoice, bill of sale or similar document given to the purchaser; Any taxes legally imposed directly on the consumer that are separately stated on the invoice, bill of sale or similar document given to the purchaser; and Credit for any trade-in, as determined by § 67-6-510 , that is separately stated on an invoice or similar billing document given to the purchaser; “Sales price” includes consideration received by the seller from third parties, if: The seller actually receives consideration from a party other than the purchaser, and the consideration is directly related to a price reduction or discount on the sale; The seller has an obligation to pass the price reduction or discount through to the purchaser; The amount of the consideration attributable to the sale is fixed and determinable by the seller at the time of the sale of the item to the purchaser; and One of the following criteria is met: The purchaser presents a coupon, certificate or other documentation to the seller to claim a price reduction or discount, where the coupon, certificate or documentation is authorized, distributed or granted by a third party, with the understanding that the third party will reimburse any seller to whom the coupon, certificate or documentation is presented; The purchaser identifies itself to the seller as a member of a group or organization entitled to a price reduction or discount. A preferred customer card that is available to any patron does not constitute membership in such a group; or The price reduction or discount is identified as a third-party price reduction or discount on the invoice received by the purchaser, or on a coupon, certificate or other documentation presented by the purchaser; “School art supplies” means an item commonly used by a student in a course of study for artwork. For purposes of this chapter, the following is an all-inclusive list of “school art supplies”: Clay and glazes; Paintbrushes for artwork; Paints, acrylic, tempera, and oil; Sketch and drawing pads; and Watercolors; “School computer supplies” means an item commonly used by a student in a course of study in which a computer is used. For purposes of this chapter, the following is an all-inclusive list of “school computer supplies”: Computer printers; Computer storage media, diskettes, compact disks; Handheld electronic schedulers, except devices that are cellular phones; Personal digital assistants, except devices that are cellular phones; and Printer supplies for computers, printer paper, printer ink; “School instructional materials” means written material commonly used by a student in a course of study as a reference and to learn the subject being taught. For purposes of this chapter, the following is an all-inclusive list of “school instructional materials”: Reference books; Reference maps and globes; Textbooks; and Workbooks; “School supplies” means an item used by a student in a course of study. For purposes of this chapter, the following is an all-inclusive list of “school supplies”: Binders; Blackboard chalk; Book bags; Calculators; Cellophane tape; Compasses; Composition books; Crayons; Erasers; Folders, expandable, pocket, plastic and manila; Glue, paste, and paste sticks; Highlighters; Index cards; Index card boxes; Legal pads; Lunch boxes; Markers; Notebooks; Paper, loose leaf ruled notebook paper, copy paper, graph paper, tracing paper, manila paper, colored paper, poster board, and construction paper; Pencil boxes and other school supply boxes; Pencil sharpeners; Pencils; Pens; Protractors; Rulers; Scissors; and Writing tablets; “Service address” means the location of the telecommunications equipment to which a customer's call is charged and from which the call originates or terminates, regardless of where the call is billed or paid. In the event this may not be known, service address means the origination point of the signal of the telecommunication service first identified by either the seller's telecommunication system or in information received by the seller from its service provider, where the system used to transport the signal is not that of the seller. In the event that neither the location of the telecommunications equipment nor the origination point of the signal are known, service address means the location of the customer's place of primary use; “Software” means computer software; “Specified digital products” means electronically transferred digital audio-visual works, digital audio works and digital books. For purposes of this subdivision (92), “electronically transferred” means obtained by the purchaser by means other than tangible storage media; “Sport or recreational equipment” means items designed for human use and worn in conjunction with an athletic or recreational activity that are not suitable for general use; “Storage” means and includes any keeping or retention in this state of tangible personal property for use or consumption in this state, or for any purpose other than sale at retail in the regular course of business; provided, that temporary storage pending shipping or mailing of tangible personal property to nonresidents of Tennessee shall not constitute a taxable use in Tennessee; (A) “Tangible personal property” means personal property that can be seen, weighed, measured, felt, or touched, or that is in any other manner perceptible to the senses. “Tangible personal property” includes electricity, water, gas, steam, and prewritten computer software; “Tangible personal property” does not include signals broadcast over the airwaves; “Tangible personal property” does not include fiber-optic cable after it has become attached to a utility pole, building, or other structure or installed underground. Such fiber-optic cable is deemed realty for purposes of this chapter upon installation; (A) “Telecommunications service” means the electronic transmission, conveyance, or routing of voice, data, audio, video, or any other information or signals to a point, or between or among points. “Telecommunications service” includes such transmission, conveyance, or routing in which computer processing applications are used to act on the form, code or protocol of the content for purposes of transmission, conveyance or routing, without regard to whether such service is referred to as voice over internet protocol services or is classified by the federal communications commission as enhanced or value added; “Telecommunications service” does not include: Data processing and information services that allow data to be generated, acquired, stored, processed, or retrieved and delivered by electronic transmission to a purchaser, where such purchaser's primary purpose for the underlying transaction is the processed data or information; Installation or maintenance of wiring or equipment on a customer's premises; Tangible personal property; Advertising including, but not limited to, directory advertising; Billing and collection services provided to third parties; Internet access service; Radio and television audio and video programming services, regardless of the medium, including the furnishing of transmission, conveyance and routing of such services by the programming service provider. Radio and television audio and video programming services shall include, but not be limited to, cable service ( 47 U.S.C. § 522(6) ), and audio and video programming services delivered by commercial mobile radio service providers, as defined in 47 CFR 20.3; Ancillary services; or Digital products delivered electronically, including, but not limited to, computer software, music, video, reading materials or ringtones; “Textbook” means a printed book that contains systematically organized educational information that covers the primary objectives of a course of study. A textbook may contain stories and excerpts of popular fiction and nonfiction writings, but does not include a book primarily published and distributed for sale to the general public. The term “textbook” does not include a computer or computer software; “Time-share estate” means an ownership or leasehold estate in property devoted to a time-share fee, tenants in common, time span ownership, interval ownership, and a time-share lease; “Tobacco” means cigarettes, cigars, chewing or pipe tobacco, or any other item that contains tobacco; (A) “Use” means and includes the exercise of any right or power over tangible personal property incident to the ownership thereof, except that it does not include the sale at retail of that property in the regular course of business; “Use” means the coming to rest in Tennessee of catalogues, advertising fliers, or other advertising publications distributed to residents of Tennessee in interstate commerce; provided, that the labeling, temporary storage, and other handling in connection with mailing or shipping of the catalogues, advertising fliers and other advertising publications in interstate commerce to nonresidents of Tennessee shall not constitute a taxable use in Tennessee; and “Use” also means and includes the consumption of any of the services and amusements taxable under this chapter; “Use tax” includes the “use,” “consumption,” “distribution” and “storage” as defined in this section; “Video game digital product” means the right to access and use computer software that facilitates human interaction with a user interface to generate visual feedback for amusement purposes, when possession of the computer software is maintained by the seller or a third party, regardless of whether the charge for the service is on a per use, per user, per license, subscription, or some other basis; (A) “Video programming services” means programming provided by or generally considered comparable to programming provided by a television broadcast station and shall include cable television services sold by a provider authorized pursuant to title 7, chapter 59, wireless cable television services (multipoint distribution service/multichannel multipoint distribution service) and video services provided through wireline facilities located at least in part in the public rights-of-way without regard to delivery technology, including internet protocol technology; “Video programming services” does not include any of the following: Digital products transferred electronically, including, but not limited to, software, ringtones, and reading materials such as books, magazines, and newspapers; Audio and video programming services provided by a commercial mobile service provider as defined in 47 U.S.C. § 332(d) ; Audio and video programming services provided as part of, or incidental to, internet access service, such as, but not limited to, video capable email; provided, that the services are not generally considered comparable to programming provided by a television broadcast station; and Direct-to-home satellite television programming services; and “Workbook” means a printed booklet that contains problems and exercises in which a student may directly write answers or responses to the problems and exercises. The term “workbook” does not include a computer or computer software. Acts 1947, ch. 3, §§ 2, 4; C. Supp. 1950, §§ 1248.51, 1248.53 (Williams, §§ 1328.23, 1328.25); Acts 1951, ch. 3, § 1; modified; 1955, ch. 51, §§ 1-5, 10; 1955, ch. 242, §§ 1, 8; impl. am. Acts 1959, ch. 9, § 14; Acts 1959, ch. 15, § 1; 1963, ch. 38, §§ 1, 2, 7; 1963, ch. 172, §§ 1, 2; 1965, ch. 3, § 1; 1965, ch. 335, § 1; 1968, ch. 556, § 1; 1968, ch. 601, § 1; 1969, ch. 95, § 1; 1970, ch. 390, § 1; 1971, ch. 117, § 1; 1971, ch. 149, § 1; 1971, ch. 151, § 1; 1972, ch. 528, § 1; 1972, ch. 709, § 1; 1972, ch. 731, § 1; 1972, ch. 757, § 1; 1972, ch. 769, § 1; 1973, ch. 179, § 1; 1974, ch. 778, § 1; 1976, ch. 442, § 1; 1977, ch. 42, § 1; 1977, ch. 250, § 1; 1978, ch. 565, §§ 1, 2; 1978, ch. 789, §§ 1, 2; 1978, ch. 921, § 1; 1979, ch. 352, § 1; 1980, ch. 602, § 1; 1981, ch. 229, § 1; T.C.A. (orig. ed.), §§ 67-3002, 67-3017; Acts 1984 (Ex. Sess.), ch. 13, §§ 2, 3, 5; 1984, ch. 523, § 1; 1984, ch. 762, §§ 1-3; 1984, ch. 959, § 1; 1984, ch. 987, § 1; 1985, ch. 25, § 3; 1985, ch. 332, §§ 1, 2; 1985, ch. 389, § 2; 1985, ch. 406, §§ 1, 3, 4, 6, 7; 1985, ch. 416, § 1; 1985, ch. 456, § 1; 1985, ch. 469, §§ 1, 2; 1986, ch. 567, § 1; 1986, ch. 815, § 1; 1986, ch. 924, § 1; 1987, ch. 185, § 1; 1987, ch. 295, § 1; 1987, ch. 428, § 3; 1988, ch. 572, § 1; 1988, ch. 789, § 1; 1989, ch. 312, § 5; 1991, ch. 29, § 1; 1991, ch. 41, § 2; 1991, ch. 80, § 1; 1991, ch. 503, § 3; 1992, ch. 917, § 1; 1992, ch. 1007, §§ 1, 2; 1993, ch. 51, §§ 1-3; 1993, ch. 68, §§ 1, 2; 1993, ch. 409, §§ 1, 2; 1994, ch. 552, § 2; 1994, ch. 852, § 1; 1995, ch. 168, §§ 1, 2; 1995, ch. 185, § 1; 1995, ch. 384, § 1; 1995, ch. 544, §§ 3, 4; 1996, ch. 721, §§ 1, 2; 1996, ch. 729, § 1; 1996, ch. 739, § 1; 1996, ch. 770, § 1; 1996, ch. 922, § 1; 1997, ch. 385, § 1; 1997, ch. 451, §§ 1, 2; 1998, ch. 732, § 1; 1998, ch. 976, § 1; 1998, ch. 1038, § 1; 1998, ch. 1057, §§ 1, 2; 1999, ch. 413, §§ 1, 3; 1999, ch. 423, § 4; 1999, ch. 484, §§ 1-3; 2002, ch. 708, § 1; 2002, ch. 719, §§ 1-4; 2002, ch. 856, § 5b; 2003, ch. 9, § 1; 2003, ch. 357, §§ 3-16; 2004, ch. 782, §§ 1-6, 15; 2004, ch. 924, § 17; 2004, ch. 959, §§ 1-4, 59, 60, 68; 2005, ch. 311, §§ 1, 2; 2005, ch. 398, § 2; 2005, ch. 499, §§ 7, 19, 20, 48-50, 52-55, 60, 68; 2006, ch. 975, § 1; 2006, ch. 1019, §§ 33, 34, 44; 2007, ch. 602, §§ 35, 36, 41, 42, 51, 53, 57-68; 2008, ch. 1106, §§ 9, 11, 18, 22, 25, 26; 2009, ch. 530, §§ 8, 18, 24, 35, 50, 53, 56, 114; 2010, ch. 1134, §§ 1, 33; 2011, ch. 508, §§ 30, 32; 2012, ch. 842, § 8; 2014, ch. 994, § 1; 2015, ch. 52, § 1; 2015, ch. 81, § 1; 2015, ch. 249, § 1; 2015, ch. 420, § 1; 2015, ch. 504, § 17; 2015, ch. 514, § 21; 2016, ch. 1001, § 1; 2019, ch. 392, § 1; 2019, ch. 483, § 1; 2019, ch. 501, § 1; 2020, ch. 646, §§ 1-6; 2020, ch. 796, § 4. Compiler's Notes. Acts 1988, ch. 789, § 4 provided that, by the amendment by that act, it was the intention of the general assembly to impose sales tax on taxable sales made to persons in this state by dealers described in subdivision (6)(J) (now (23)(J)) and if the congress acts to preempt state taxation under that subdivision, pursuant to its authority to regulate interstate commerce, it was further the intention of the general assembly to impose tax on sales made to persons in this section by dealers described in subdivision (6)(J) (now (23)(J)) to the fullest extent as allowed by the congress, with the rate of local tax to be as stated in § 67-6-702(f) . Acts 1994, ch. 552, § 4 provided that subdivision (12)(F) (now (44)(G)) shall be retroactive in application to January 1, 1990. Acts 1995, ch. 544, § 5 provided that the amendments by this act apply to investments in facilities and purchases of equipment made on or after April 1, 1995. Acts 1995, ch. 185, referred to in this section, amended this section and § 67-6-206 . Acts 1996, ch. 739, § 3 provided that notwithstanding the provisions of § 67-1-1802 , sales or use taxes paid prior to April 12, 1996, on purchases or sales to a contractor whose principal business is the improvement of real property shall not be refunded when based upon the industrial machinery exemption provided by § 67-6-206 , the energy fuels, electricity and water reduced rates or exemption provided by § 67-6-206 or the industrial materials exemption provided in subdivision (23)(E) (now (32)(E)) of this section unless a properly documented refund claim is filed within ninety (90) days of April 12, 1996. Acts 1998, ch. 732, § 2 provided that the act shall take effect on July 1, 1998, and shall apply to purchases or leases of previously occupied buildings occurring on or after that date, the public welfare requiring it. Acts 2002, ch. 719, § 11 provided: “If a court of competent jurisdiction enters a final judgment on the merits that is based on federal law, is no longer subject to appeal, and substantially limits or impairs the essential elements of 4 U.S.C. §§ 116 through 126 adopted by this act, then §§ 1 through 4 and §§ 6 through 8 of this act are declared to be invalid and have no legal effect as of the date of entry of such judgment. Further, as of the date of entry of such judgment, all provisions and amendments enacted by §§ 1 through 4 and §§ 6 through 8 of this act shall automatically be repealed and the law in effect immediately prior to May 1, 2002, shall become effective without further action by the general assembly. This section shall not apply to §§ 5, 9 and 10 of this act.” Acts 2002, ch. 856, § 13 provided that no expenditure of public funds pursuant to that act shall be made in violation of the provisions of Title VI of the Civil Rights Act of 1964, as codified in 42 U.S.C. § 2000 d. Former § 61-1-128 , referred to in this section, was repealed by Acts 2001, ch. 353, effective January 1, 2002. For the new provisions concerning dissociation of partnerships, effective January 1, 2002, see title 61, ch. 1, part 6. Acts 2004, ch. 782, § 18 provided that the provisions of the act shall not modify, impair, supersede or authorize the modification, impairment or supersession of any provision of the Mobile Telecommunications Sourcing Act, compiled in 4 U.S.C. §§ 116-126. Acts 2004, ch. 782, § 22 provided that §§ 3, 5, and 6 of the act shall take effect for bills that are submitted to customers that are dated on or after July 1, 2004, and remain in effect until the effective date of Public Acts 2003, ch. 357, at which time the sections shall be repealed. Acts 2007, ch. 602, § 51 provided that Acts 2003, ch. 357, § 3-16, as amended by Acts 2004, ch. 959, §§ 1-4, 59, 60, and 68, as amended by Acts 2005, ch. 311, §§ 1 and 2 are repealed in their entirety, effective June 28, 2007. Acts 2007, ch. 602, § 53 provided that Acts 2005, ch. 499, § 68 is repealed in its entirety. Acts 2009, ch. 530, § 133 provided that §§ 8 and 24 of the act, which amended the definitions of “fabricating or processing tangible personal property for resale” and “qualified data center”, shall apply to all business plans filed on or after July 1, 2009. Acts 2010, ch. 1134, § 3 provided that Acts 2009, ch. 530, § 18, which amended the definition of “qualified data center”, shall apply to transactions occurring on or after January 1, 2008. Acts 2010, ch. 1134, § 66, provided that § 33 of the act, which added subdivision (H)(i)(c ) to the definition of “industrial machinery” shall apply to business plans filed on or after July 1, 2010. Acts 2011, ch. 508, § 34 provided that the act, which amended the definitions of “industrial machinery” and “qualified data center”, shall apply to any written proposal by the department of economic and community development or the department of revenue on or after July 1, 2011. The Streamlined Sales and Use Tax Agreement, as amended through December 19, 2017, may be found on the website of the Streamlined Sales Tax Governing Board, Inc., at http://www.streamlinedsalestax.org/. Acts 2015, ch. 504, § 22 provided that the act, which added (O) to the definition of “Industrial machinery”, shall apply to tax years ending on or after July 1, 2015. Acts 2015, ch. 514, § 1 provided that the act shall be known and may be cited as the “Revenue Modernization Act.” For the Preamble to the act concerning the need to modernize the sales and use taxes, franchise and excise taxes and business tax in the state to address the engagement in business within the state by out-of-state companies, see Acts 2015, ch. 514. Acts 2016, ch. 1001, § 4 provided that the act, which amended this section, shall apply to tax years ending on or after July 1, 2016. For Preamble to the act concerning intent of the general assembly regarding exemptions from sales and use taxes for certain charges related to fiber-optic cable, see Acts 2019, ch. 501. Acts 2019, ch. 483, § 2 provided the act shall not be given retroactive application, and shall only apply prospectively to tax liabilities incurred on or after July 1, 2019. Amendments. The 2019 amendment by ch. 392, in the fourth sentence of (B) in the definition of “business”, inserted “including online sales” following “does not include sales,” “300,00” for “100,000” preceding “per calendar year,” and substituted “must remain in effect” for “shall remain in effect”. The 2019 amendment by ch. 483 added (A)(iv) in the definition of “lease or rental property”. The 2019 amendment by ch. 501 added (C) in the definition of “tangible personal property”. The 2020 amendment by ch. 646 added (N) in the definition of “dealer”; added “and every marketplace facilitator” in the definition of “retailer”; added (L) in the definition of “sale”; and added the definitions of “delivery network company”, “delivery services”, “local merchant”, “marketplace”, “marketplace facilitator” and “marketplace seller”. The 2020 amendment by ch. 796 added (C) in the definition of “marketplace facilitator”. Effective Dates. Acts 2019, ch. 392, § 2. May 10, 2019. Acts 2019, ch. 483, § 3. July 1, 2019. Acts 2019, ch. 501, § 3. July 1, 2019. Acts 2020, ch. 646, § 11. October 1, 2020. Acts 2020, ch. 796, § 8. October 1, 2020 at 12:01 a.m. Cross-References. Amusement tax, § 67-6-212 . Construction machinery transfers, taxation, § 67-6-311 . Local enterprise zones, title 13, ch. 28, part 2. Occupation tax, title 67, ch. 4, part 17. Renting or providing space to transient dealers or vendors, § 67-6-213 . Tax on sales of tangible personal property to common carriers for use out of state, § 67-6-219 . Textbooks. Tennessee Jurisprudence, 6 Tenn. Juris., Commercial Law § 3; 16 Tenn. Juris., Interstate Commerce, § 11; 23 Tenn. Juris., Taxation, §§ 2, 73, 74. Law Reviews. What is a Sale for Sales Tax Purposes? (Clyde L. Ball), 9 Vand. L. Rev. 225 (1956). Attorney General Opinions. Retroactive application of 1995 amendment, OAG 97-018 (3/3/97). Personal check as tangible personal property, OAG 98-012 (1/9/98). Taxability of biannual consignment sales of used clothes, OAG 99-004 (1/25/99). If the taxable event, i.e., the date of the sale of the property under Tennessee law, occurs on or after July 15, 2002, then the higher sales tax rate imposed by the Tennessee Tax Reform Act of 2002 applies to a purchase of tangible personal property, OAG 02-087 (8/20/02). Out-of-state dealer's nexus as a result of activities of in-state distribution center. OAG 11-71, 2011 Tenn. AG LEXIS 73 (10/3/11). An online marketplace facilitator, who engages in the regular, systematic solicitation of a consumer market in Tennessee, is a dealer if it consummates the sales transactions with those consumers. The Department of Revenue is empowered to promulgate rules requiring online marketplace facilitators to collect and remit sales tax on behalf of out-of-state dealers, provided the facilitators themselves are not out-of-state dealers. OAG 19-03, 2019 Tenn. AG LEXIS 3 (3/12/2019). NOTES TO DECISIONS 1. Constitutionality. 2. Construction. 3. Applicability. 4. Terms Defined. 5. —“Business.” 6. —“Component Part.” 7. —“Consumer.” 8. —“Consumption.” 9. —“Container.” 10. —“Contractor.” 11. —“Dealer.” 12. —Dry-Docking and Launching. 13. —“For any Purpose Other Than for Resale.” 14. —“Industrial Machinery.” 15. —“Installation Services.” 16. —“Laundering.” 17. — “Person.” 18. —Retail Sales. 19. — —Drop Shipment Sales. 20. — —Manufacture. 21. — —Repair Services. 22. — —Display Racks. 23. —“Sale.” 24. —“Sales Price.” 25. —Storage. 26. —“Tangible Personal Property.” 27. —“Use Tax.” 28. —“Resale.” 29. Utilities. 30. Industrial Materials. 1. Constitutionality. The imposition of sales taxes on services performed within the state on products later placed into interstate commerce is not a violation of the commerce clause in U.S. Const., art. 1, § 8, cl. 3 or § 67-6-313 . LeTourneau Sales & Serv., Inc. v. Olsen, 691 S.W.2d 531, 1985 Tenn. LEXIS 598 (Tenn. 1985) (decided prior to 1985 amendment to § 67-6-313 ). Tennessee may constitutionally impose a sales tax upon the transfer of possession in Tennessee of domestically-owned cargo containers used exclusively in international commerce. Itel Containers Int'l Corp. v. Cardwell, 814 S.W.2d 29, 1991 Tenn. LEXIS 169 (Tenn. 1991), aff'd, Itel Containers Int'l Corp. v. Huddleston, 507 U.S. 60 , 113 S. Ct. 1095 , 122 L. Ed. 2 d 421, 1993 U.S. LEXIS 1778 (1993), aff'd sub nom. Itel Containers Int'l Corp. v. Huddleston, 507 U.S. 60 , 113 S. Ct. 1095 , 122 L. Ed. 2 d 421, 1993 U.S. LEXIS 1778 (1993). No violation of commerce clause occurred in taxing the leasing of cargo containers, where the containers had a substantial nexus with Tennessee, they were present within the state at the time of transfer of possession to each lessee, and since the containers were in the custody of corporation's employees and agents in Tennessee. The tax was fairly apportioned, since it was levied only on the proceeds of leases pursuant to which the lessee takes delivery in Tennessee; the tax did not discriminate, since it fell even-handedly on all leased personal property in the state; and the tax was fairly related to the services provided by Tennessee, services that include police and fire protection. Itel Containers Int'l Corp. v. Cardwell, 814 S.W.2d 29, 1991 Tenn. LEXIS 169 (Tenn. 1991), aff'd, Itel Containers Int'l Corp. v. Huddleston, 507 U.S. 60 , 113 S. Ct. 1095 , 122 L. Ed. 2 d 421, 1993 U.S. LEXIS 1778 (1993), aff'd sub nom. Itel Containers Int'l Corp. v. Huddleston, 507 U.S. 60 , 113 S. Ct. 1095 , 122 L. Ed. 2 d 421, 1993 U.S. LEXIS 1778 (1993). The exclusive remedy afforded by § 67-1-1801 et seq. is adequate for purposes of determining any liability taxpayer, a Maine corporation engaged in retail sales, may have for Tennessee sales taxes. In a proceeding brought pursuant to such statutory provisions, taxpayer can raise its constitutional objections to the application to it of subdivision (6)(J) (now (23)(J)). L.L. Bean, Inc. v. Bracey, 817 S.W.2d 292, 1991 Tenn. LEXIS 346 (Tenn. 1991). Seller's extensive connections with Tennessee were sufficient to provide a constitutional nexus under the commerce clause, U.S. Const. art. 1, § 8, cl. 3, required to support the imposition of a tax collection liability on the seller, T.C.A. §§ 67-6-101 to 67-6-907 ; the seller had the physical presence in the state and the nexus required to support the imposition of use tax. Arco Bldg. Sys. v. Chumley, 209 S.W.3d 63, 2006 Tenn. App. LEXIS 395 (Tenn. Ct. App. 2006), appeal denied, Arco Bldg. Sys., Inc. v. Chumley, — S.W.3d —, 2006 Tenn. LEXIS 1002 (Tenn. 2006) . 2. Construction. Regulation which made certain freight, delivery or other transportation charges subject to the sales and use tax did not exceed the scope of this section and was within the rule-making authority of the commissioner of revenue. Porter Brown Limestone Co. v. Olson, 648 S.W.2d 242, 1982 Tenn. LEXIS 374 (Tenn. 1982). While doubts in the construction of the tax statutes must be resolved in favor of the taxpayer, exemptions will be construed against the taxpayer and must positively appear and will not be implied. LeTourneau Sales & Serv., Inc. v. Olsen, 691 S.W.2d 531, 1985 Tenn. LEXIS 598 (Tenn. 1985). Taxation statutes must be liberally construed in favor of the taxpayer and strictly construed against the taxing authority. Covington Pike Toyota, Inc. v. Cardwell, 829 S.W.2d 132, 1992 Tenn. LEXIS 221 (Tenn. 1992), superseded by statute as stated in, Reimann v. Huddleston, 883 S.W.2d 135, 1993 Tenn. App. LEXIS 756 (Tenn. Ct. App. 1993). Exemptions are construed against the taxpayer, who bears the burden of proving entitlement to the exemption. Covington Pike Toyota, Inc. v. Cardwell, 829 S.W.2d 132, 1992 Tenn. LEXIS 221 (Tenn. 1992), superseded by statute as stated in, Reimann v. Huddleston, 883 S.W.2d 135, 1993 Tenn. App. LEXIS 756 (Tenn. Ct. App. 1993). Statutes levying taxes will not be extended by implication beyond the clear import of the language used, nor will their operation be enlarged so as to embrace matters not specifically pointed out, although standing on a close analogy. Covington Pike Toyota, Inc. v. Cardwell, 829 S.W.2d 132, 1992 Tenn. LEXIS 221 (Tenn. 1992), superseded by statute as stated in, Reimann v. Huddleston, 883 S.W.2d 135, 1993 Tenn. App. LEXIS 756 (Tenn. Ct. App. 1993). Words employed by the legislature in the enactment of tax statutes are to be taken in their natural and ordinary sense. Covington Pike Toyota, Inc. v. Cardwell, 829 S.W.2d 132, 1992 Tenn. LEXIS 221 (Tenn. 1992), superseded by statute as stated in, Reimann v. Huddleston, 883 S.W.2d 135, 1993 Tenn. App. LEXIS 756 (Tenn. Ct. App. 1993). Where taxpayer with a federal contract was both the fabricator and user of software used in the project and did not fabricate the software for sale or use of another, the software was exempt from the state use tax. Lockheed Martin Energy Sys. v. Johnson, 78 S.W.3d 918, 2002 Tenn. App. LEXIS 81 (Tenn. Ct. App. 2002). The exemption from the use tax found at T.C.A. § 67-6-102 , that exemption has two components: (1) “Fabrication” of the software by the entity seeking the exemption; and (2) For the fabricator's own use or consumption. The statute is clear in its meaning, if either component is missing, there is no exemption. Lockheed Martin Energy Sys. v. Johnson, 78 S.W.3d 918, 2002 Tenn. App. LEXIS 81 (Tenn. Ct. App. 2002). Finding that the industrial machinery exemption was not applicable since what was really being sold by the taxpayer was a service, telecommunications, as defined in T.C.A. § 67-6-102 , was affirmed because the taxpayer, not its customers, were the ultimate user or consumer within the meaning of sales and use tax statutes, when the primary function and purpose of the taxpayer was to provide services, and the ownership, use and maintenance of certain types of personal property and equipment were necessary in order to enable it to furnish the services. Corp. v. Chumley, 190 S.W.3d 652, 2005 Tenn. App. LEXIS 664 (Tenn. Ct. App. 2005), appeal denied, AT&T Corp. v. Chumley, — S.W.3d —, 2006 Tenn. LEXIS 350 (Tenn. 2006) . 3. Applicability. The court rejected the contention that the commissioner of revenue could tax a service as a “repair service” under T.C.A. § 67-6-102 as within the definition of the regulation yet deny that the regulation has the same meaning when applied to an exemption of repair services within T.C.A. § 67-6-327 . Warner-Tamble Co. v. Taylor, 778 S.W.2d 440, 1989 Tenn. LEXIS 456 (Tenn. 1989). The general assembly intended to tax the transfer of possession of tangible personal property in Tennessee, pursuant to lease agreements executed outside of Tennessee. Itel Containers Int'l Corp. v. Cardwell, 814 S.W.2d 29, 1991 Tenn. LEXIS 169 (Tenn. 1991), aff'd, Itel Containers Int'l Corp. v. Huddleston, 507 U.S. 60 , 113 S. Ct. 1095 , 122 L. Ed. 2 d 421, 1993 U.S. LEXIS 1778 (1993), aff'd sub nom. Itel Containers Int'l Corp. v. Huddleston, 507 U.S. 60 , 113 S. Ct. 1095 , 122 L. Ed. 2 d 421, 1993 U.S. LEXIS 1778 (1993). 4. Terms Defined. The exclusion from taxability for “occasional and isolated sales” and the exclusion for “sales for resale” are not mutually exclusive. A given transaction might qualify for each of these exclusions. SC & T Properties v. Huddleston, 823 S.W.2d 541, 1992 Tenn. LEXIS 25 (Tenn. 1992). 5. —“Business.” Transfer of vehicles from a parent corporation to newly-created subsidiaries in exchange for stock and securities constitutes a transaction subject to the Tennessee sales tax. D. Canale & Co. v. Celauro, 765 S.W.2d 736, 1989 Tenn. LEXIS 6 (Tenn. 1989). The exclusion from the statutory definition of business under T.C.A. § 67-6-102 does not apply to all occasional and isolated sales but only to occasional and isolated sales or transactions by a person who does not hold himself out as engaged in business. SC & T Properties v. Huddleston, 823 S.W.2d 541, 1992 Tenn. LEXIS 25 (Tenn. 1992). A regulation published by the commissioner of revenue exempted from sales tax casual and isolated sales by persons not in the business of selling tangible personal property, but did not apply to any sales of tangible personal property or taxable services bought upon a resale certificate for resale by those persons who held themselves out as engaged in business, notwithstanding the fact that the sales may have been few and infrequent. The regulation was consistent with T.C.A. § 67-6-102 . SC & T Properties v. Huddleston, 823 S.W.2d 541, 1992 Tenn. LEXIS 25 (Tenn. 1992). A wholly-owned subsidiary established for the purpose of performing repair services for its parent company was a “business” within the meaning of T.C.A. § 67-6-102 and was liable for the payment of sales taxes on the services for the period up to the effective date of the exemption provided by former T.C.A. § 67-6-350 . Trailer Conditioners, Inc. v. Huddleston, 897 S.W.2d 728, 1995 Tenn. App. LEXIS 15 (Tenn. Ct. App. 1995). 6. —“Component Part.” Fire brick used in manufacturing process to line furnaces, and clay to line ladles are not exempt from taxation since they do not become a part of the articles manufactured for sale. Phillips & Buttorff Mfg. Co. v. Carson, 188 Tenn. 132, 217 S.W.2d 1, 1949 Tenn. LEXIS 324 (1949). Coal and fuel oil used in manufacturing process to generate steam for operation of machines or to maintain enameling solutions at uniform temperatures are not exempt from taxation since they do not become a component part of anything that is manufactured. Phillips & Buttorff Mfg. Co. v. Carson, 188 Tenn. 132, 217 S.W.2d 1, 1949 Tenn. LEXIS 324 (1949). Strictly construing an exemption from a use tax of materials which become a component part of a finished manufactured product, it was held that to make out the exemption it was necessary that the materials had actually gone into the finished product as an ingredient or component, and that such an exemption applied only to such personal property as had been chemically or mechanically incorporated into the finished product. Kingsport Publishing Corp. v. Olsen, 667 S.W.2d 745, 1984 Tenn.

LEXIS 770 (Tenn. 1984). Upon review of the record, the appellate court could not say that the evidence preponderated against the finding of the trial court that corporation did not lease the corporation owned equipment to its customers, but used it in the performance of its security monitoring contracts because the corporation's customer contracts contained in the record clearly indicated that the corporation charged its customers only an installation charge for the installation of a security monitoring system to be utilized in conjunction with the corporation's monitoring services. Therefore, the appellate court agreed with the trial court that the corporation used the equipment components in furtherance of its own security monitoring contracts, and thus, the corporation failed to carry its burden to demonstrate that its purchases of monitoring system components were exempt from sales and use taxes as a sale for resale under T.C.A. § 67-6-102 . ADT Sec. Servs. v. Johnson, 329 S.W.3d 769, 2009 Tenn. App. LEXIS 775 (Tenn. Ct. App. Nov. 19, 2009), rehearing denied, ADT Sec. Servs., Inc. v. Johnson, — S.W.3d —, 2009 Tenn. App. LEXIS 861 (Tenn. Ct. App. Dec. 16, 2009), appeal denied, ADT Sec. Servs. v. Johnson, — S.W.3d —, 2010 Tenn. LEXIS 579 (Tenn. June 17, 2010). 7. —“Consumer.” Contractor and electrical dealer who constructed electric transmission lines on premises of another pursuant to lump sum contract did not purchase materials so used for purpose of resale in form of tangible personal property, but was “consumer” of such materials within meaning of Sales Tax Law. Townsend Electric Co. v. Evans, 193 Tenn. 536, 246 S.W.2d 967, 1952 Tenn. LEXIS 322 (1952). 8. —“Consumption.” For purposes of regulation providing for a sales and use tax exemption for industrial materials which are consumed, “consumed” meant that the material had been reduced to nothing more than scrap, and industrial materials of which 85 percent could be recovered and reused were not deemed to have been consumed. Quaker Oats Co. v. Jackson, 745 S.W.2d 269, 1988 Tenn. LEXIS 1 (Tenn. 1988). 9. —“Container.” Sales of milk bottles to retail distributors of milk for delivery to consumers which are returnable to distributors by consumers are not “retail sales” subject to tax, since bottles are “containers” … used for packaging tangible personal property for shipment or sale. Evans v. Memphis Dairy Exch., 194 Tenn. 317, 250 S.W.2d 547, 1952 Tenn. LEXIS 384 (1952). 10. —“Contractor.” Concern engaged in the sale and installation of air-conditioning units which included the completion of system of ducts which became a permanent part of the buildings and improvements to the realty was a contractor rather than a retail seller and was liable for sales tax even though work was performed for churches and municipalities who were exempt from the statute. S.M. Lawrence Co. v. MacFarland, 210 Tenn. 100, 355 S.W.2d 100, 1962 Tenn. LEXIS 397 (1962). Under this section, a tax is imposed upon the privilege of use by a contractor of tangible personal property regardless of title where such property has not previously borne a sales or use tax. United States v. Boyd, 211 Tenn. 139, 363 S.W.2d 193, 1962 Tenn. LEXIS 351 (1962), aff'd, 378 U.S. 39 , 84 S. Ct. 1518 , 12 L. Ed. 2 d 713, 1964 U.S. LEXIS 2154 (1964), aff'd, United States v. Boyd, 378 U.S. 39 , 84 S. Ct. 1518 , 12 L. Ed. 2 d 713, 1964 U.S. LEXIS 2154 (1964). Where a vendee is both a dealer and a contractor there is an obligation on the part of the vendor to determine whether the articles are to be for resale or to be used in the business of the vendee. General Electric Co. v. Butler, 211 Tenn. 196, 364 S.W.2d 361, 1962 Tenn. LEXIS 356 (1962). Dining company was not an agent of the tax-exempt university where it provided food service, because the university did not exercise sufficient control over the means and methods of the food service operations. Thus, the dining company was responsible to pay the “contractor's use tax” for the value of personal property and utilities provided by the university. Sodexho Management, Inc., v. Ruth E. Johnson, 174 S.W.3d 174, 2004 Tenn. App. LEXIS 729 (Tenn. Ct. App. Nov. 8, 2004), rehearing denied, Sodexho Management v. Ruth E. Johnson, —S.W.3d—, 2004 Tenn. App. LEXIS 789 (Tenn. Ct. App. 2004), appeal denied, Sodexho Mgmt. v. Johnson, — S.W.3d —, 2005 Tenn. LEXIS 453 (Tenn. May 2, 2005). Key factors in determining whether a party is an agent or an independent contractor are the principal's “right to control” and the “extent of control” the principal actually exerted. Sodexho Management, Inc., v. Ruth E. Johnson, 174 S.W.3d 174, 2004 Tenn. App. LEXIS 729 (Tenn. Ct. App. Nov. 8, 2004), rehearing denied, Sodexho Management v. Ruth E. Johnson, —S.W.3d—, 2004 Tenn. App. LEXIS 789 (Tenn. Ct. App. 2004), appeal denied, Sodexho Mgmt. v. Johnson, — S.W.3d —, 2005 Tenn. LEXIS 453 (Tenn. May 2, 2005). Agreement is a relevant factor in determining whether a party is an agent or independent contractor; however, it is not the only relevant factor. The conduct of the parties is also relevant. Sodexho Management, Inc., v. Ruth E. Johnson, 174 S.W.3d 174, 2004 Tenn. App. LEXIS 729 (Tenn. Ct. App. Nov. 8, 2004), rehearing denied, Sodexho Management v. Ruth E. Johnson, —S.W.3d—, 2004 Tenn. App. LEXIS 789 (Tenn. Ct. App. 2004), appeal denied, Sodexho Mgmt. v. Johnson, — S.W.3d —, 2005 Tenn. LEXIS 453 (Tenn. May 2, 2005). Determination of whether a party is an independent contractor or an agent is fact intensive and there is no uniform rule by which they may be distinguished. Sodexho Management, Inc., v. Ruth E. Johnson, 174 S.W.3d 174, 2004 Tenn. App. LEXIS 729 (Tenn. Ct. App. Nov. 8, 2004), rehearing denied, Sodexho Management v. Ruth E. Johnson, —S.W.3d—, 2004 Tenn. App. LEXIS 789 (Tenn. Ct. App. 2004), appeal denied, Sodexho Mgmt. v. Johnson, — S.W.3d —, 2005 Tenn. LEXIS 453 (Tenn. May 2, 2005). Agent or contractor steps into the shoes of its tax-exempt client when it is a servant of that client. Sodexho Management, Inc., v. Ruth E. Johnson, 174 S.W.3d 174, 2004 Tenn. App. LEXIS 729 (Tenn. Ct. App. Nov. 8, 2004), rehearing denied, Sodexho Management v. Ruth E. Johnson, —S.W.3d—, 2004 Tenn. App. LEXIS 789 (Tenn. Ct. App. 2004), appeal denied, Sodexho Mgmt. v. Johnson, — S.W.3d —, 2005 Tenn. LEXIS 453 (Tenn. May 2, 2005). Key factors in determining whether a party is an agent or an independent contractor are the principal's “right to control” and the “extent of control” the principal actually exerted. Sodexho Management, Inc., v. Ruth E. Johnson, 174 S.W.3d 174, 2004 Tenn. App. LEXIS 729 (Tenn. Ct. App. Nov. 8, 2004), rehearing denied, Sodexho Management v. Ruth E. Johnson, —S.W.3d—, 2004 Tenn. App. LEXIS 789 (Tenn. Ct. App. 2004), appeal denied, Sodexho Mgmt. v. Johnson, — S.W.3d —, 2005 Tenn. LEXIS 453 (Tenn. May 2, 2005). Agreement is a relevant factor in determining whether a party is an agent or independent contractor; however, it is not the only relevant factor as the conduct of the parties is also relevant. Sodexho Management, Inc., v. Ruth E. Johnson, 174 S.W.3d 174, 2004 Tenn. App. LEXIS 729 (Tenn. Ct. App. Nov. 8, 2004), rehearing denied, Sodexho Management v. Ruth E. Johnson, —S.W.3d—, 2004 Tenn. App. LEXIS 789 (Tenn. Ct. App. 2004), appeal denied, Sodexho Mgmt. v. Johnson, — S.W.3d —, 2005 Tenn. LEXIS 453 (Tenn. May 2, 2005). One factor that distinguishes contractors from agents is that the contractor is using the property in connection with its own commercial activities. Sodexho Management, Inc., v. Ruth E. Johnson, 174 S.W.3d 174, 2004 Tenn. App. LEXIS 729 (Tenn. Ct. App. Nov. 8, 2004), rehearing denied, Sodexho Management v. Ruth E. Johnson, —S.W.3d—, 2004 Tenn. App. LEXIS 789 (Tenn. Ct. App. 2004), appeal denied, Sodexho Mgmt. v. Johnson, — S.W.3d —, 2005 Tenn. LEXIS 453 (Tenn. May 2, 2005). Determination of whether a party is an independent contractor or an agent is fact intensive and there is no uniform rule by which they may be distinguished. Sodexho Management, Inc., v. Ruth E. Johnson, 174 S.W.3d 174, 2004 Tenn. App. LEXIS 729 (Tenn. Ct. App. Nov. 8, 2004), rehearing denied, Sodexho Management v. Ruth E. Johnson, —S.W.3d—, 2004 Tenn. App. LEXIS 789 (Tenn. Ct. App. 2004), appeal denied, Sodexho Mgmt. v. Johnson, — S.W.3d —, 2005 Tenn. LEXIS 453 (Tenn. May 2, 2005). 11. —“Dealer.” Although a wife who signed an assumption of liability agreement assuming liability for her husband's business debts was not a “dealer” as defined in T.C.A. § 67-6-102 , she was a “person liable to pay any state tax” within the meaning of T.C.A. § 67-1-1403(a) . Brown Oil Co. v. Johnson, 689 S.W.2d 149, 1985 Tenn. LEXIS 509 (Tenn. 1985). A foreign corporation, which shipped catalogs to Tennessee addresses, was a dealer as defined in T.C.A. § 67-6-102 and exercised a taxable use with respect to such catalogs printed outside of Tennessee and shipped in-state to Tennessee addresses. J.C. Penney Co. v. Olsen, 796 S.W.2d 943, 1990 Tenn. LEXIS 316 (Tenn. 1990), rehearing denied, J. C. Penney Co. v. Olsen, — S.W.2d —, 1990 Tenn. LEXIS 385 (Tenn. Oct. 22, 1990). Taxpayer, a Delaware corporation with its principal place of business located in Texas, was a dealer as defined in this section and thus engaged in taxable activity within Tennessee, where taxpayer maintained essential business link with, and was primary supplier of, subsidiary conducting business activities in Tennessee. Pearle Health Servs., Inc. v. Taylor, 799 S.W.2d 655, 1990 Tenn. LEXIS 167 (Tenn. 1990). 12. —Dry-Docking and Launching. Service charges for dry-docking and launching performed as part of the repair or renewal of barges at taxpayer's shipyard were subject to the sales and use tax. Serodino, Inc. v. Woods, 568 S.W.2d 610, 1978 Tenn. LEXIS 612 (Tenn. 1978). 13. —“For any Purpose Other Than for Resale.” The language “for any purpose other than for resale” in T.C.A. § 67-6-102 has been construed as an exception to the sales tax statute; accordingly, it must be construed against the taxpayer and an exception from sales tax must positively appear because it will not be implied. Nashville Clubhouse Inn v. Johnson, 27 S.W.3d 542, 2000 Tenn. App. LEXIS 163 (Tenn. Ct. App. 2000). 14. —“Industrial Machinery.” Labor cost incurred by chemical company in permanently installing chemical manufacturing systems equipment classified as industrial machinery under the statute was to be included in tax base for application of Tennessee sales and use tax for industrial machinery. Hoyer-Schlesinger-Turner, Inc. v. Benson, 479 S.W.2d 223, 1972 Tenn. LEXIS 398 (Tenn. 1972). Where the primary function of plaintiff's oil tanks was storage of the oil prior to the beginning of fabricating or processing of the oil for delivery, the oil tanks did not qualify under this section which requires that industrial machinery be used directly and primarily in fabricating or processing tangible personal property for resale. Woods v. General Oils, Inc., 558 S.W.2d 433, 1977 Tenn. LEXIS 658 (Tenn. 1977). Materials and services furnished by the taxpayer at its shipyard to repair and renew barges owned by other companies were subject to the sales and use tax. Serodino, Inc. v. Woods, 568 S.W.2d 610, 1978 Tenn. LEXIS 612 (Tenn. 1978). A backhoe used to remove and sort a salable product from a mine should be classified as “industrial machinery”. Shearin v. Woods, 597 S.W.2d 895, 1980 Tenn. LEXIS 451 (Tenn. 1980). Where taxpayer used equipment in the construction of a water distribution system, a use different from that set forth in his application, and a use that was outside the statutory definition of “industrial machinery,” the commissioner could not be bound to recognize the equipment as “industrial machinery” since the actual use made of the equipment was different from the use in the application. King Constr. Co. v. Tollett, 599 S.W.2d 797, 1980 Tenn. LEXIS 461 (Tenn. 1980). Pre-dryer and dust collectors used by Parquet Manufacturing Plant were not industrial machinery. Tibbals Flooring Co. v. Olsen, 698 S.W.2d 60, 1985 Tenn. LEXIS 589 (Tenn. 1985). Molten tin used in glass manufacturing process was tax exempt under T.C.A. § 67-6-206(a) as industrial machinery. AFG Indus., Inc. v. Cardwell, 835 S.W.2d 583, 1992 Tenn. LEXIS 429 (Tenn. 1992). “Industrial machinery” includes only machinery, apparatus and equipment used during the manufacturing process, and not before raw materials are brought in to start the process, nor after the completed product has been shipped away from the manufacturing site. Nuclear Fuel Servs., Inc. v. Huddleston, 920 S.W.2d 659, 1995 Tenn. App. LEXIS 823 (Tenn. Ct. App. 1995), appeal denied, Nuclear Fuel Servs. v. Huddleston, — S.W.2d —, 1996 Tenn. LEXIS 288 (Tenn. Apr. 29, 1996). Equipment used by a nuclear fuel manufacturer in decontamination and decommissioning of facilities after the manufacturer ceased production did not qualify for the industrial equipment exemption. Nuclear Fuel Servs., Inc. v. Huddleston, 920 S.W.2d 659, 1995 Tenn. App. LEXIS 823 (Tenn. Ct. App. 1995), appeal denied, Nuclear Fuel Servs. v. Huddleston, — S.W.2d —, 1996 Tenn. LEXIS 288 (Tenn. Apr. 29, 1996). Application for industrial machinery authorization for television stations' equipment was granted because the equipment was used: (1) Primarily to fabricate or process tangible personal property (the broadcast signal); (2) For resale and ultimate consumption off the premises of the television stations; and (3) The fabricating or processing of the tangible personal property was for the television station's principal business. Freedom Broad. of TN, Inc. v. Tenn. Dep't of Revenue, 83 S.W.3d 776, 2002 Tenn. App. LEXIS 10 (Tenn. Ct. App. 2002), superseded by statute as stated in, Corp. v. Chumley, 190 S.W.3d 652, 2005 Tenn. App. LEXIS 664 (Tenn. Ct. App. 2005). Catalysts used by the taxpayer were exempt from the use tax as industrial machinery under T.C.A. § 67-6-102 , where instead of being processed, the catalysts performed the processing function by triggering the chemical reactions that turned raw materials into saleable products; the catalysts were not raw materials or ingredients used in the production of the goods, they were components of the equipment and apparatus used in the manufacturing process and did not become part of the final product. Eastman Chem. Co. v. Johnson, 151 S.W.3d 503, 2004 Tenn. LEXIS 994 (Tenn. 2004). 15. —“Installation Services.” Performing engineering, design and consulting services cannot be construed to be installation services within the meaning of this section. Austin Co. v. Woods, 620 S.W.2d 73, 1981 Tenn. LEXIS 471 (Tenn. 1981). 16. —“Laundering.” The word “laundering” in this section means more than merely the washing of clothes and may extend to the washing of other tangible personal property. ARB Enters., Inc. v. Olsen, 647 S.W.2d 939, 1983 Tenn. LEXIS 635 (Tenn. 1983). 17. — “Person.” Under the current version of T.C.A. § 67-6-507 , a taxpayer and a creditor were not a “group or combination acting as a unit” such that their relationship qualified them as a “person” under the Retailers' Sales Tax Act. The parties' governing document specifically stated that the two corporations were independent contractors and were not partners or joint venturers, fiduciaries or any association for profit. Sears, Roebuck & Co. v. Roberts, — S.W.3d —, 2016 Tenn. App. LEXIS 319 (Tenn. Ct. App. May 11, 2016), appeal denied, Sears Roebuck & Co. v. Roberts, — S.W.3d —, 2016 Tenn. LEXIS 678 (Tenn. Sept. 23, 2016). 18. —Retail Sales. 19. — —Drop Shipment Sales. Where title and possession of truck bodies was transferred outside the state of Tennessee when truck manufacturing company employees delivered the trucks to the utility companies' places of business in accordance with the F.O.B. delivery terms of the contracts; since the sales and deliveries of the truck bodies to out-of-state utility companies did not involve transfers of title or possession of tangible personal property in Tennessee, the “drop shipment” sales were not taxable sales at retail “in this state.” Eusco, Inc. v. Huddleston, 835 S.W.2d 576, 1992 Tenn. LEXIS 431 (Tenn. 1992). 20. — —Manufacture. Company which assembled trucks sometimes using parts they manufactured and sometimes parts purchased from other companies was deemed a manufacturer of utility trucks, and where the trucks in question were manufactured under contracts with out-of-state companies and title to the trucks passed from the truck company to the purchasers outside of Tennessee after delivery of the trucks F.O.B. to the purchaser, the drop shipment sales fell within the “manufactured for export” exemption of T.C.A. § 67-6-313 . Eusco, Inc. v. Huddleston, 835 S.W.2d 576, 1992 Tenn. LEXIS 431 (Tenn. 1992). 21. — —Repair Services. The taxable event is the rendering of repair services in Tennessee. What happens after the repairs are performed is of no consequence as far as the imposition of sales tax is concerned. LeTourneau Sales & Serv., Inc. v. Olsen, 691 S.W.2d 531, 1985 Tenn. LEXIS 598 (Tenn. 1985) (decided prior to 1985 amendment to § 67-6-313 ). The tax on repair services is not limited to minor repairs but includes “any repair service with respect to any kind of tangible personal property”; the extent to which customers' products are repaired is not a relevant consideration. LeTourneau Sales & Serv., Inc. v. Olsen, 691 S.W.2d 531, 1985 Tenn. LEXIS 598 (Tenn. 1985). Rebuilding or remanufacturing of customer's equipment was taxable as a repair service. LeTourneau Sales & Serv., Inc. v. Olsen, 691 S.W.2d 531, 1985 Tenn. LEXIS 598 (Tenn. 1985). “Repair services” and “repairs” of tangible personal property shall mean and include any one or all of the following for a user and consumer: work done to preserve or restore to or near the original condition made necessary by wear, normal use, wastage, injury, decay, partial destruction, or dilapidation; the mending, correction, or adjustment made for any defect or defective portion; alterations; refinishing; maintenance, preventive maintenance, or warranty contracts; and any cleaning that is a necessary part of any repair work. Warner-Tamble Co. v. Taylor, 778 S.W.2d 440, 1989 Tenn. LEXIS 456 (Tenn. 1989). The undertaking of contractual commitments by entering into an extended warranty contract does not constitute “the performing for a consideration of any repair services” within the meaning of T.C.A. § 67-6-102 ; therefore the inclusion of “warranty contracts” in a list of “repair services” or “repairs” in department of revenue rule 1320-5-1-.54(2) is beyond the commissioner of revenue's rule-making authority. Covington Pike Toyota, Inc. v. Cardwell, 829 S.W.2d 132, 1992 Tenn. LEXIS 221 (Tenn. 1992), superseded by statute as stated in, Reimann v. Huddleston, 883 S.W.2d 135, 1993 Tenn. App. LEXIS 756 (Tenn. Ct. App. 1993). The words “performing” and “installing,” taken in their natural and ordinary sense, mean the carrying out of physical acts. Performing repair services does not include the act of entering into a contractual commitment to provide repair services in the future and on a contingent basis. Covington Pike Toyota, Inc. v. Cardwell, 829 S.W.2d 132, 1992 Tenn. LEXIS 221 (Tenn. 1992), superseded by statute as stated in, Reimann v. Huddleston, 883 S.W.2d 135, 1993 Tenn. App. LEXIS 756 (Tenn. Ct. App. 1993). 22. — —Display Racks. The manufacture and sale of display racks to a manufacturer who gave them to dealers for use in display of its products for sale was not exempt as sales for resale. Scholl, Inc. v. Jackson, 731 S.W.2d 893, 1987 Tenn. LEXIS 912 (Tenn. 1987). 23. —“Sale.” Sale and delivery of electricity is a sale within the meaning of this section. Texas Eastern Transmission Corp. v. Benson, 480 S.W.2d 905, 1972 Tenn. LEXIS 338 (Tenn. 1972), appeal dismissed, 409 U.S. 1003 , 93 S. Ct. 441 , 34 L. Ed. 2 d 295, 1972 U.S. LEXIS 620 (1972), appeal dismissed, Texas Eastern Transmission Corp. v. Benson, 409 U.S. 1003 , 93 S. Ct. 441 , 34 L. Ed. 2 d 295, 1972 U.S. LEXIS 620 (1972), rehearing denied, 409 U.S. 1119 , 93 S. Ct. 898 , 34 L. Ed. 2d 703 (1972). Interstate commerce had not yet begun when catalogs were delivered to or picked up by a company acting as an agent for distribution on behalf of the buyer, and a sale or transfer of possession as defined in this section was therefore completed at this point within the state such that under these facts, a taxable event occurred. Board of Publication of Methodist Church, Inc. v. Woods, 609 S.W.2d 501, 1980 Tenn. LEXIS 513 (Tenn. 1980). Sales tax was imposed upon transportation charges of seller who used third-party contract hauler to haul material to job-site, where title passed to buyer. Porter Brown Limestone Co. v. Olson, 648 S.W.2d 242, 1982 Tenn. LEXIS 374 (Tenn. 1982). Radio common carrier which provided commercial radio and communication services in Nashville and the Middle Tennessee area was not engaged in sales for resale but rather in the furnishing of equipment as a part of and a means of delivering its principal service. Nashville Mobilphone Co. v. Woods, 655 S.W.2d 934, 1983 Tenn. LEXIS 700 (Tenn. 1983). Where telephone repair company was primarily engaged in the business of furnishing repair services, the furnishing of those services was taxable as a retail sale, and where the equipment which the company repaired was that of an affiliated company which was the primary user or consumer of that equipment, repair company held not furnishing repair services to that company for purposes of resale, and its charges to its affiliated corporation were therefore taxable. Nashville Mobilphone Co. v. Woods, 655 S.W.2d 934, 1983 Tenn. LEXIS 700 (Tenn. 1983). When construed with § 67-6-210 , this section imposes a tax on both the sale and use of computer software not made by the user for personal use. University Computing Co. v. Olsen, 677 S.W.2d 445, 1984 Tenn. LEXIS 850 (Tenn. 1984). To be taxable the casual and isolated transfer of aircraft must still be a sale for a consideration. Northern Telecom, Inc. v. Olsen, 679 S.W.2d 448, 1984 Tenn. LEXIS 870 (Tenn. 1984), superseded by statute as stated in, D. Canale & Co. v. Celauro, 765 S.W.2d 736, 1989 Tenn. LEXIS 6 (Tenn. 1989). The merger of a wholly owned subsidiary into the parent corporation, where the parent corporation gave up nothing and exchanged no consideration, and the subsidiary received nothing, indeed there was no subsidiary to receive consideration, was not a sale under this section, the transfer of aircraft registration was not a taxable event, and was not subject to the sales tax under § 67-6-202 . Northern Telecom, Inc. v. Olsen, 679 S.W.2d 448, 1984 Tenn. LEXIS 870 (Tenn. 1984), superseded by statute as stated in, D. Canale & Co. v. Celauro, 765 S.W.2d 736, 1989 Tenn. LEXIS 6 (Tenn. 1989). The fabrication or modification of clients' computer software by corporation providing computer programming consulting services is a “sale” within the definition set forth in T.C.A. § 67-6-102 , and is subject to the sales tax. Creasy Sys. Consultants v. Olsen, 716 S.W.2d 35, 1986 Tenn. LEXIS 786 (Tenn. 1986). Promotional and advertising materials created and transferred from wholly-owned subsidiary advertising agency to parent corporation and other affiliates were sales and subject to the sales tax. Standard Advertising Agency, Inc. v. Jackson, 735 S.W.2d 441, 1987 Tenn. LEXIS 955 (Tenn. 1987). The import-for-export exemption from sales tax does not apply when the transfer of title is from a vendor located in Tennessee to a purchaser also located in Tennessee even though the purchaser intends to and does export the merchandise. Jack Daniel Distillery v. Jackson, 740 S.W.2d 413, 1987 Tenn. LEXIS 1014 (Tenn. 1987). Transfer of vehicles from a parent corporation to newly-created subsidiaries in exchange for stock and securities constitutes a transaction subject to the Tennessee sales tax. D. Canale & Co. v. Celauro, 765 S.W.2d 736, 1989 Tenn. LEXIS 6 (Tenn. 1989). The revenue commissioner cannot, by regulation, enlarge the definition of a sale as defined in T.C.A. § 67-6-102 . Volunteer Val-Pak v. Celauro, 767 S.W.2d 635, 1989 Tenn. LEXIS 124 (Tenn. 1989). Arrangement whereby taxpayer solicited advertisers, contracted with out-of-state printers to print advertising, and then distributed advertising as part of collective mailing in Tennessee, was not subject to sales tax. Volunteer Val-Pak v. Celauro, 767 S.W.2d 635, 1989 Tenn. LEXIS 124 (Tenn. 1989). Delivery of sample prescription drugs free to physicians by a manufacturer did not constitute a sale and such transfer was not exempt under former T.C.A. § 67-3-320 [repealed]. American Cyanamid Co. v. Huddleston, 908 S.W.2d 396, 1995 Tenn. App. LEXIS 352 (Tenn. Ct. App. 1995), rehearing denied, — S.W.2d —, 1995 Tenn. App. LEXIS 392 (Tenn. Ct. App. June 9, 1995). Pagers purchased by a paging service and leased to its customers were purchased for resale, and, where the sales tax on the rental fee was collected and remitted, the purchase of the pagers was exempt from sales tax. Cape Fear Paging Co. v. Huddleston, 937 S.W.2d 787, 1996 Tenn. LEXIS 514 (Tenn. 1996). Complimentary food and beverages provided by hotels, the cost of which is reflected in the price of the rooms, qualifies as sales; therefore, hotels are not required to pay tax on food and beverages when purchased by them. Nashville Clubhouse Inn v. Johnson, 27 S.W.3d 542, 2000 Tenn. App. LEXIS 163 (Tenn. Ct. App. 2000). 24. —“Sales Price.” Petitioner who operated a laundry exempt from sales tax as a service was liable for sales tax on gross proceeds of amount received from rental of diapers although diapers were laundered by petitioner. Saverio v. Carson, 186 Tenn. 166, 208 S.W.2d 1018, 1948 Tenn. LEXIS 531 (1948). Where drug manufacturer and wholesaler maintained two price lists one substantially higher than the other and customers who purchased from the higher list were entitled to credit toward receipt of nondrug items which such taxpayer purchased from various sources and distributed to such customers as “premiums” while customers who purchased from the lower list received no such credits for merchandise such “premiums” were in fact a part of a sale transaction and where purchasers paid sales tax on the entire price as stated in the higher price list taxpayer was not liable for use tax on nondrug items. Morton Pharmaceuticals, Inc. v. MacFarland, 212 Tenn. 168, 368 S.W.2d 756, 1963 Tenn. LEXIS 409 (1963). Where social club, by resolution, added 15 percent tip to bill of member and tip could be modified or eliminated by member, and the proceeds of which went to waitress, tipping schedule was social not legal and tips did not constitute charge for services rendered and should not be included in club's sales tax base. Memphis Country Club v. Tidwell, 503 S.W.2d 919, 1973 Tenn. LEXIS 446, 73 A.L.R.3d 1221 (Tenn. 1973). Engineering, design, and consulting services, overhead and profit from contracts involving those services do not fall within the meaning of the term “sales price”. Austin Co. v. Woods, 620 S.W.2d 73, 1981 Tenn. LEXIS 471 (Tenn. 1981). 25. —Storage. Mississippi River dredge, docked or in storage within Tennessee when not in use, was in storage within the meaning of T.C.A. § 67-6-102 and T.C.A. § 67-6-211 , and subject to the use tax. Bean Dredging Corp. v. Olsen, 742 S.W.2d 259, 1987 Tenn. LEXIS 1079 (Tenn. 1987), cert. denied, 485 U.S. 1034 , 108 S. Ct. 1594 , 99 L. Ed. 2 d 909, 1988 U.S. LEXIS 2046 (1988), cert. denied, Bean Dredging Corp. v. Olsen, 485 U.S. 1034 , 108 S. Ct. 1594 , 99 L. Ed. 2 d 909, 1988 U.S. LEXIS 2046 (1988). 26. —“Tangible Personal Property.” Human blood is tangible personal property subject to sale or use tax unless expressly exempt. Parkridge Hospital, Inc. v. Woods, 561 S.W.2d 754, 1978 Tenn. LEXIS 579 (Tenn. 1978). The definition of computer software as tangible personal property was the response of the general assembly to the holding in Commerce Union Bank v. Tidwell, 538 S.W.2d 405, 1976 Tenn. LEXIS 492 (Tenn. 1976) that a sale of computer software was not a sale of tangible personal property, and its realization that the definition first adopted opened the way for computer software developed within a company for its own use to be subjected to use taxation. Creasy Sys. Consultants v. Olsen, 716 S.W.2d 35, 1986 Tenn. LEXIS 786 (Tenn. 1986). The transfer of computer software is to be taxed the same as all other transfer of tangible personal property. Creasy Sys. Consultants v. Olsen, 716 S.W.2d 35, 1986 Tenn. LEXIS 786 (Tenn. 1986). The general assembly intended to tax the transfer or fabrication of computer programs whatever the means used, excepting only the fabrication of computer software by a person for his own use. Creasy Sys. Consultants v. Olsen, 716 S.W.2d 35, 1986 Tenn. LEXIS 786 (Tenn. 1986). Software is taxable, tangible personal property under this section. Pan Am World Services, Inc. v. Jackson, 754 S.W.2d 53, 1988 Tenn. LEXIS 139 (Tenn. 1988). Exemption for industrial machinery, used to fabricate or process tangible personal property for resale, requires only that the end product of fabrication or processing be tangible personal property. Jersey Miniere Zinc Co. v. Jackson, 774 S.W.2d 928, 1989 Tenn. LEXIS 392 (Tenn. 1989). Gold and silver coins and bullion are tangible personal property subject to tax. State v. Sanders, 923 S.W.2d 540, 1996 Tenn. LEXIS 358 (Tenn. May 28, 1996). 27. —“Use Tax.” “Use tax” is a tax on the privilege of using, consuming, distributing or storing tangible property after it is brought within the state from outside the state. Madison Suburban Utility Dist. v. Carson, 191 Tenn. 300, 232 S.W.2d 277, 1950 Tenn. LEXIS 573 (1950). Natural gas diverted from interstate pipeline to operate compressors which maintained interstate flow which diverted gas was in continuous flow until consumed by compressor engines was not brought to rest in the state so as to be subject to use tax. Texas Gas Transmission Corp. v. Benson, 223 Tenn. 279, 444 S.W.2d 137, 1969 Tenn. LEXIS 486 (1969). Tennessee use tax was not applicable to value of materials withdrawn from warehouse in Tennessee and shipped into another state and used there. Young Sales Corp. v. Benson, 224 Tenn. 88, 450 S.W.2d 574, 1970 Tenn. LEXIS 380 (1970). Where metal fabricating business engaged in custom making steel structures to order for a particular purpose of a customer, the manufacturer was exercising the privilege of using tangible personal property rather than the privilege of engaging in retail sales, which activity constituted a “use” as defined by this section. Pidgeon-Thomas Iron Co. v. Garner, 495 S.W.2d 826, 1973 Tenn. LEXIS 496 (Tenn. 1973). A person who brings in materials from out of state to be used in this state is liable for a use tax. Woods v. M. J. Kelley Co., 592 S.W.2d 567, 1980 Tenn. LEXIS 394 (Tenn. 1980), cert. denied, 447 U.S. 905 , 100 S. Ct. 2987 , 64 L. Ed. 2 d 854, 1980 U.S. LEXIS 2340 (1980), cert. denied, M. J. Kelley Co. v. Woods, 447 U.S. 905 , 100 S. Ct. 2987 , 64 L. Ed. 2 d 854, 1980 U.S. LEXIS 2340 (1980). “Directly” meant in direct contact with and without the intervention of any person or thing; blanket wash, used to clean printing presses was deemed to be used indirectly, not directly, in producing newspapers. Kingsport Publishing Corp. v. Olsen, 667 S.W.2d 745, 1984 Tenn. LEXIS 770 (Tenn. 1984). Preprinted advertising supplements inserted in a newspaper are not part of the newspaper and are thus subject to the use tax. Sears, Roebuck & Co. v. Woods, 708 S.W.2d 374, 1986 Tenn. LEXIS 827 (Tenn. 1986). No provision for apportionment is made in the Tennessee Sales and Use Tax law, and the court has no authority to apportion on any basis. Service Merchandise Co. v. Jackson, 735 S.W.2d 443, 1987 Tenn. LEXIS 1071 (Tenn. 1987). In a taxpayer corporation's action for a refund of use tax under T.C.A. § 67-6-102 neither the corporation nor the Tennessee department of revenue was entitled to judgment as a matter of law because material disputes existed regarding the inferences or conclusions that could have been drawn from the facts. Cao Holdings, Inc. v. Trost, 333 S.W.3d 73, 2010 Tenn. LEXIS 1149 (Tenn. Dec. 15, 2010). 28. —“Resale.” Where title to tangible personal property passes to the buyer prior to the seller/contractor's use of that property, a resale of tangible personal property has occurred. Hearthstone, Inc. v. Moyers, 809 S.W.2d 888, 1991 Tenn. LEXIS 136 (Tenn. 1991), rehearing denied, — S.W.3d —, 1991 Tenn. LEXIS 200 (Tenn.1991). If the seller had not purchased the equipment pursuant to the presentation of a resale certificate, then it would have owed use taxes on the equipment pursuant to T.C.A. § 67-6-203 . SC & T Properties v. Huddleston, 823 S.W.2d 541, 1992 Tenn. LEXIS 25 (Tenn. 1992). A taxpayer qualified for a sale for resale exemption found in the definition of “retail sale” or “sale at retail” from the imposition of a use tax on the taxpayer's out-of-state purchase of an aircraft because (1) the taxpayer's leases of the aircraft were legitimate and not illusory or chiefly motivated by tax avoidance, as the decision to form the taxpayer to purchase and lease the aircraft served other legitimate business purposes, and valuable consideration supported the leases, and (2) Tennessee had not adopted the economic substance doctrine to analyze the “bona fide sale” requirement. Niuklee, LLC v. Comm'r, — S.W.3d —, 2015 Tenn. App. LEXIS 899 (Tenn. Ct. App. Nov. 9, 2015), appeal denied, Niuklee, LLC v. Comm'r, Tenn. Dep't of Revenue, — S.W.3d —, 2016 Tenn. LEXIS 263 (Tenn. Mar. 28, 2016). 29. Utilities. The sales tax may be collected on telephone end user charges if: (1) The taxed activity has a substantial nexus to the state; (2) The tax is fairly apportioned to the state; (3) The tax does not discriminate against interstate commerce; and (4) The tax is fairly related to services provided within the state. South Cent. Bell Tel. Co. v. Celauro, 735 S.W.2d 228, 1987 Tenn. LEXIS 1069 (Tenn. 1987). If a business both sells and manufactures at one location, the relationship between consumption of utilities for manufacturing as compared to that for selling activities does not reveal which is the principal business of the taxpayer, and consumption of utilities is not the proper standard on which the Retailers' Sales Tax is computed. Tennessee Farmers' Cooperative v. State, 736 S.W.2d 87, 1987 Tenn. LEXIS 960 (Tenn. 1987). 30. Industrial Materials. Taxpayer's purchases of log home kits were exempt from sales tax because the building products were industrial materials used for manufacture into personal property for resale in other states. Hearthstone, Inc. v. Moyers, 809 S.W.2d 888, 1991 Tenn. LEXIS 136 (Tenn. 1991), rehearing denied, — S.W.3d —, 1991 Tenn. LEXIS 200 (Tenn.1991). Taxpayer's use of building materials in Tennessee for the manufacture of log home kits for resale out-of-state was not a taxable use, since the statutory definition of “use,” “storage” and “consumption,” excludes the use, storage or consumption of industrial materials for manufacture into articles of tangible personal property for resale. Hearthstone, Inc. v. Moyers, 809 S.W.2d 888, 1991 Tenn. LEXIS 136 (Tenn. 1991), rehearing denied, — S.W.3d —, 1991 Tenn. LEXIS 200 (Tenn.1991). A paving contractor that mixed its own asphalt using rock or stone from its quarries and, in addition, sold crushed rock and/or asphalt to third parties, and that paid sales tax on transactions, whether it sold materials to third parties or used the materials in fulfilling its paving contracts, qualified for the industrial machinery exemption, the manufacturer's utilities exemption, and the industrial materials and explosives exemption from use taxes. Rogers Group, Inc. v. Huddleston, 900 S.W.2d 34, 1995 Tenn. App. LEXIS 6 (Tenn. Ct. App. 1995).