(a) Where used articles are taken in trade, or in a series of trades, as a credit or part payment on the sale of new or used articles, the tax levied by this chapter shall be paid on the net difference, that is, the price of the new or used article sold, less the credit for the used article taken in trade.

Terms Used In Tennessee Code 67-6-510

  • 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. See Tennessee Code 67-6-102
  • Dealer: means every person, as used in this chapter, including Model 1, Model 2, and Model 3 sellers, where the context requires, who:
    (A) 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. See Tennessee Code 67-6-102
  • Sale: includes the furnishing of any of the things or services taxable under this chapter. See Tennessee Code 67-6-102
  • 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. See Tennessee Code 67-6-102
  • Use tax: includes the "use" "consumption" "distribution" and "storage" as defined in this section. See Tennessee Code 67-6-102
(b)

(1) A motor vehicle dealer having previously titled and registered a motor vehicle in the dealership name for business use, and having paid the appropriate sales or use tax on such vehicle, shall be allowed a trade-in credit equal to the trade-in value of such vehicle against the purchase price of a new or used vehicle purchased or extracted from such dealer’s inventory to be titled and registered as a replacement vehicle for business use, and the sales or use tax shall be paid on the net difference.
(2) The trade-in value authorized by this subsection (b) shall be equal to the trade-in amount for the specific make and model as established by the NADA Official Used Car Guide, Southeastern Edition.
(3) It is the legislative intent that a dealer may purchase a vehicle from the dealer’s dealership’s inventory and receive the same trade-in credit as if the dealer purchased the vehicle from the inventory of another dealer.
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