Tennessee proposes sales tax on advertising services for large businesses

Tennessee lawmakers introduced SB 2568, a bill that would expand the state's sales and use tax to cover advertising services purchased by or on behalf of businesses generating $100 million or more in annual revenue. The bill defines "advertising" broadly to include any written, electronic, or printed communication that promotes a brand, product, or service. That definition covers sponsorships, television, digital, radio, billboard, and print advertising. The bill has passed its second consideration and been referred to the Senate Finance, Ways, and Means Committee. If enacted, the tax would take effect January 1, 2027. 

The bottom line: Tennessee is following Washington's lead in targeting advertising services for sales & use tax base, but with a key distinction: the $100 million revenue threshold means this tax is aimed squarely at large businesses. Companies meeting that threshold should monitor SB 2568 closely and assess how a new tax on ad spending would affect their marketing budgets and vendor agreements in Tennessee.